Only 2.2% of VC funding went to female founders in 2017, despite evidence they often outperform men. Entrepreneur Monica Eaton-Cardone says it’s time for venture capitalists to invest in women.
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Venture capital (VC) investments remained heavily biased toward men in 2017:
- Companies with female founders closed just 368 VC deals, compared to 5,588 for male founders and 1,046 for mixed-gender teams;
- Female founders received only $1.9 billion (2.2%) of the $85 billion in VC investments last year; and
- Female founders averaged $5.16 million per VC deal vs. $11.97 million for male founders. (1)
In addition, male tech founders were almost twice as likely as females to receive funding from male investors due to “taste-based discrimination,” including “outright sexism.” (2)
Yet evidence shows female-led companies often outperform male-led ones:
- One VC analysis revealed companies with a female founder performed 63% better than investments with all-male founding teams. (3)
- Seed crowdfunding campaigns led by women were 32% more successful than those created by men. (4)
- Among Kickstarter technology projects, 65% of female-founded campaigns met their fundraising goals vs. just 30% of male-led ventures. (5)
- On Indiegogo, women were 61% more likely than men to meet their financial goals. (5)
Monica Eaton-Cardone, an entrepreneur and IT executive specializing in risk management and fraud prevention, says the data presents a strong case for funding women-led startups.
“VC firms that invest almost exclusively in male-led companies aren’t just doing a disservice to women, but they may be limiting their own return on investment.” – Eaton-Cardone
She notes that male investors who fail to seek out and fund female-led ventures may soon find themselves outperformed by a new breed of VC firms focused on women-led startups, including Golden Seeds, Female Founders Fund, The Helm and XFactor Ventures.
Monica Eaton-Cardone is an entrepreneur and business leader with expertise in FinTech and eCommerce. She has co-founded a number of successful companies and currently fulfills executive management roles within each organization. She is a well-known champion of women in business and a sought-after speaker.
- Zarya, Valentina. “Female Founders Got 2% of Venture Capital Dollars in 2017”; Fortune; January 31, 2018
- California Institute of Technology. “Female Tech Entrepreneurs Hampered by Bias Among Male Investors, Study Finds”; Caltech news release posted November 16, 2017.
- First Round Capital. 10 Year Project; July 2015.
- PwC and The Crowdfunding Center. Women Unbound: Unleashing Female Entrepreneurial Potential; July 2017.
- Lu, Jiaxi. “Study: Women Are More Likely to Succeed in Kickstarter Projects Than Men”; The Washington Post; August 15, 2014.