The highs and lows of Q3 venture capital data for women startup founders

Perhaps unsurprisingly, new PitchBook data found that U.S. companies with all female founders are raising less capital this year than the last amid current economic woes.

Last year, women raised around 2.4% of all venture capital allocated, a figure that stands at 1.9% through Q3 of this year. That number becomes even lower and even worse if we factor race into account. When the overall number for all-female teams was 2.4% last year, Black and Latinx women hovered around 0.05% each, while Indigenous Americans raised approximately 0.004% of known capital in the United States, according to Crunchbase.

It has long been a worry that, as the venture market slows, the most marginalized groups would be pushed aside as investors retreat to old networks and deals that feel most familiar to them from the founders they don’t hesitate to trust. The direct line between the venture haves and have-nots has always been stark, but there is some good news on the front.

Year-to-date capital invested in all-female-founded companies in the United States is slightly higher than what was disbursed in all of 2020. (Last year was a record-breaking year, and given the current market conditions, it’s not shocking that present-day numbers are meager in comparison). All-female teams raised $3.6 billion (out of a total U.S. figure of $194.9 billion) across 742 deals so far this year. In all of 2020, all-female teams raised $3.3 billion (out of $168.7 billion) across 771 deals. It’s clear that 2021 was an outlier: all-female teams raised $8 billion across 1,132 deals.

It’s jarring to note the difference between deal counts and the amount of money raised when the founding teams are mixed gender rather than all-female. Compared to $3.6 billion worth of deals all-female teams closed this year, teams with at least one male co-founder raised $32.4 billion in 2,811 deals. So far, mixed-gender teams have also been able to secure the same percentage of capital they raised last year, around 17%.

This only, once again, underscores that those who identify as women are seen as more valuable and more investable when there is a man beside them. Allison Luvera and Lauren De Niro Pipher, the co-founders of Juliet Wine, just closed a $3.5 million fundraise after a year of searching for capital. Luvera said the discrepancy between all-female teams and mixed-gender teams reveals a long-standing pattern of women falling behind men as a result of persistent gender bias.

“We’ve seen this throughout the pandemic in regard to women and work, and I think the recent data is just another example of that, despite report after report showing that women are extremely effective leaders,” Luvera told TechCrunch. For example, Luvera and De Niro Pipher said they immediately felt the venture tides change as they sought capital in 2022.

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“It was shocking how many potential investors asked about our plans for marriage and having children,” Luvera continued. “I can’t imagine a founding team with a man being subject to the same line of questioning.”

However, there is good news for all-female-founded teams: Year to date, the number of late-stage deals closed by such teams totaled 181, well over the 164 deals closed in all of 2020. (If this year’s pace continues, that figure would top 2021’s total of 233 deals closed.)

The Bay Area stands as the top place for all female teams to receive investments, having allocated $5.5 billion to this cohort compared to New York’s deployment of $4.9 billion, Los Angeles’ $1.9 billion and Philadelphia’s $600 million. In reverse, New York is the top deal count location for all-female founder teams, followed by the Bay Area, Los Angeles and Boston.

Pippa Lamb, an angel investor and partner at Sweet Capital, said it is disappointing to see that all-female-founded companies are receiving less venture capital this year than the year prior.

“Female-founded companies are being disproportionately punished within the overall slowdown in U.S. VC funding,” she told TechCrunch. “There is no logical justification for why female founders should be impacted any more so than any other founder category, be it in a bear or bull market.”

Luvera reiterated that point, saying that stakeholders must get more money into the hands of women to spur innovation. But she and De Niro Pipher said they remain focused on doing the best work possible and refuse to let any stat discourage them.

“While it’s not fair that women seem to have to work harder and overcome more obstacles during fundraising, the silver lining is that when we do get the capital, we are that much more prepared to execute,” Luvera said. “We remained confident that we would succeed.”