Closing the Gap

In many ways, there has never been a better time to be a female founder. Women-led startups have nearly doubled in the last five years, and there are now 21 female-led unicorns in the startup industry–the highest on record to date. 

Women are also starting to narrow the funding gap, all while killing it in the business. In fact, according to this First Round Capital report, 63 percent of female founders outperform their male peers. Not only that, but businesses founded and run by women deliver higher revenue – more than twice as much per dollar invested – than those led by men. The numbers suggest that investors get a greater return when backing female founders. 💪 

Yet while the data is trending in the right direction, women founders remain underfunded compared to men.

Today, only 2.3% of all capital invested in startups goes to companies founded by women. These investments average about $935K, which is less than half of what’s invested in male-led businesses. With just 9% of new companies being founded by women, female founders are few and far between, and they have to constantly compete for funding from mostly male VCs.

These challenges are only being amplified by the pandemic.

Unfortunately, COVID-19 has made this environment even more challenging, not just for female founders, but for all women at work. In September of 2020 alone, 1.1M people in the U.S. left the workforce – 80% of which were women. Just at a time when women started breaking into the startup industry, many are now leaving or pausing their career due to job loss, increased childcare and home responsibilities, and other new challenges posed by the pandemic. 

The reality of gender inequality isn’t going away. Female entrepreneurs need to work within the system if they want to change it. 

If you’re an aspiring founder, apply to an accelerator. Seek out founders or CEOs with experience to help you navigate your business growth. Ask for advice on your pitch deck, and get the support you need to go after bigger investments. 

You can also approach the many VC firms led by or known for investing in women. Female VCs are twice as likely to invest in startups with at least one female founder, and 3x as likely to invest in female CEOs. For example, you can check out Rethink Impact or Women in VC for additional resources. You can also use the tools and resources such as SheWorx Roundtables, Office Hours, and newsletters provided by platforms like SheWorx to meet other female entrepreneurs and to build your support network. 

We are on the edge of a new era for diversity and inclusion, and there are a number ways we--as a community--can combat this gender imbalance. At a time when we are being told to be socially distant, it’s our social networks and platforms like SheWorx that can help bring people together to bring about real and lasting change. Learn more about how you can help us close the gap at www.sheworx.com. Sign up for our newsletter here, get connected with fellow female founders and investors, and create lasting change.