The percentage of startups that have at least one female founder was flat in the first quarter of 2017.
Crunchbase’s inaugural study on female founder representation of US-based companies was published in May 2015. As the discussion on the lack of women in engineering teams gathered pace, we concluded that Crunchbase was uniquely placed to address the issue of women being represented in tech when it comes to founders. As the open dataset for the startup community, we added gender to Crunchbase in March 2015 to further the research on leadership, founders, and gender.
Two years on, and with the expansion of the study to the global ecosystem, we revisit the same questions: what percent of companies have at least one female founder? Have those numbers shifted since 2009? How do female founder teams fare when raising seed, early, and late-stage venture dollars?
Five Years, No Percentage Growth
For Crunchbase’s continuing study of female founders, 43,008 global companies with founders had an initial funding between 2009 to 2017. Of these global companies, 6,791 (15.8%) have at least one female founder. For this update, we are primarily reviewing year-over-year trends, as data continues to be added to Crunchbase for 2016.
From 2009 to 2012, the percent of venture-funded companies with women founders increased by nearly 8 percent; however, the percentage of women-founded venture-backed companies has plateaued at approximately 17 percent since 2012. And as we look at Q1 2017 data, that percent doesn’t appear to have changed. For those who are keeping track, that’s nearly five years with no percentage growth in women-founded venture-backed startups:
The absolute number of companies (along with the total number of startups) with a female founder grew more than fivefold from 176 in 2009 to 932 in 2016. This 2016 result will grow as more women-founded startups with an initial funding are added to Crunchbase over the next year.
Of the 932 companies, one-third represent female-only founder teams. A further third are comprised of two-person female-male founding teams. The final third are founders teams of three or more members. In summary, two-thirds of women-founded companies are led only by women or are co-founded with one male founder.
For companies with an initial raise in 2016, female-founded companies are weighted towards education (32%), e-commerce (31%), healthcare (21%), and media and entertainment (21%) startups.
Female-Founded Companies Raise Just 8% of Late-Stage Rounds, 7% Of Late-Stage Dollars
When it comes to fundraising, how do women-founded teams fare? At each progressive funding stage, female-founded companies are raising lower percents of overall funding.
In 2016, companies with at least one female founder raised 19% of all seed rounds, 14% of early stage venture, and 8% of late stage venture rounds.
For the same year, female-founded companies raised 17% of seed dollars, 13% of early stage dollars, and 7% of late stage dollars.
Investor Firms Challenging The Status Quo
Many organizations have been formed to address challenges that female founder and underrepresented minorities face. Angel networks like Astia Angels, Pipeline Angels, Broadway Angels and Golden Seeds focus on female-led companies along with training women in investing. BBG Ventures, MergeLane, the Female Founders Fund, Rivet Ventures, Halogen Ventures, Scale Investors, Fierce Capital and The Perkins fund are all early stage funds focused on female-founded companies. SheWorx, The Vinetta Project, Watermark, and others provide a forum for female founders and leadership. Selected here is a growing list of investor firms listed in Crunchbase geared towards investing in female founders.
Susan Lyne, a co-founder of BBG Ventures, confirms that “the biggest issue is not the number of women starting companies, but the access to capital as you move up the food chain.” As demonstrated by the charts above, female-founded companies are raising less as an overall percent as they move through seed, early, and late-stage venture. Across all funding stages in 2016, $10 billion went to companies with at least one female founder contrasted with $94 billion invested in male only founder teams.
Glossary Of Funding terminology
- Seed/Angel include financings that are classified as a seed or angel, including accelerator fundings and equity crowdfunding below $5 million.
- Early stage venture include financings that are classified as a Series A or B, venture rounds without a designated series that are below $15M, and equity crowdfunding above $5 million.
- Late stage venture include financings that are classified as a Series C+ and venture rounds greater than $15M.
- Technology Growth include private equity investments with participation from venture investors.