The women’s space: Funding

Who is funding female founders? The why & the how

Background

Female founded companies only received 2.2% of the entire VC investment in 2018 in the US.

“In 2018, all female founders put together received $10 billion less in funding than one e-cigarette company, Juul, took in by itself,” says an article by Fortune.

Trying to understand why this is, I looked through interviews by several VCs that explain the why they think the disparity exists and how it could be decreased. From sexism to unconscious bias, from pre-existing mindsets to pattern recognition issues, they outlined several reason as the root causes. And over 60% of [both male and female] VCs agreed that one way to fix the problem would be to have more women on VC boards, increase gender diversity internally at VC firms, and increase women’s investment authority: in short, give women more decision making power about where the money goes.

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The search

A google search and a couple WhatsApp inquiries with friends in the space led me to some female-focused venture funds. On their websites, I often found stats justifying their choice to support women founders — these stats showed why it makes more business sense to invest in women rather than men — because women bring more return and are more successful than men. In contrast, when I read through the websites of big VC firms such as Accel or Sequoia [which don’t necessarily invest in one gender or the other explicitly], they claimed to support “exceptional” or “daring” talent, but found no reason to make a business case or show stats of why that is the case — it was more a given.

To be quite honest, I am not fully sure how I feel about this. I get that to change the status-quo we have to provide sufficient reasoning — because that’s just how the world has done it all these years. But I can’t seem to get this out of my head either:

Why do underrepresented groups need to provide a business case for themselves for a seat at the table, while the “daring,” for example, are automatically considered the right choice to provide investment to, without there being any stats to show the causation/correlation between the daring and success?

Source: https://femalefoundersfund.com/

The list

Here are some players focused on females in startups. While most of them share the same passion: supporting women, they each have their own ways of expressing it (check out all the cool tag lines below), and some have unique offerings by way of coaching, mentoring or communities.

1. Female Founders Fund: “It’s not just about the women, it’s about talent,” they say. Because “women experience greater successes — and fewer failures — than their male counterparts.” Female Founders Fund only invests in female-led startups.
   Unique offering: Female Founders Fund curates a community of college fellows interested in VC and entrepreneurship who provide insights and feedback from a Gen Z audience.
2. BBG Ventures: “An early stage fund focused on consumer tech startups with a female founder.” BBG’s only investment requirement is that at least one of the founders is female — why? Because “the greatest untapped opportunity for venture capital lies in backing women who are using technology to address common life-challenges and transform daily habits.”
3. Rivet Ventures: Instead of backing female founders, Rivet Ventures invests in companies that focus on female usage & purchasing power because they feel that women — the largest consumer segment — is often an afterthought for most companies.
4. SoGal Ventures: Claiming to be the first female-led millennial venture cap fund, SoGal exists to redefine the next generation of diverse founders and funders. Looking closely, I did not find a female-only clause, but there is a strong emphasis on the importance of diversity.
   Unique offering: iamsogal, an ecosystem with 40+ chapters all around the world, brings entrepreneurs, investors and partners together for education and empowerment to close the diversity gap in entrepreneurship and venture capital.
5. InvestHER: InvestHER leans strongly on the business case for women — that women execs lead to higher valuations yet there is such little investment in women. InvestHER focuses on the US and partners with companies that has at least one female executive with equity.
6. Victress Capital: “Growth Realized. Women (EM)powered.” Even though their tagline says it and there are several women-related stats mentioned on their website, I was unable to find a female specific clause for Victress Capital. However, there is a strong emphasis on the importance of diversity. Victress Capital backs “tenacious founders who are building companies in consumer industries that will drive innovation and emerge as clear market leaders.”
7. Halogen Ventures: “an early stage venture capital fund focused on female founded consumer technologies.”
   Unique offering: Although it’s not clear how from their website, Halogen offers “hands on attention and plug each of our portfolio companies into a strategic network of advisors, investors and accelerators in the greater venture community.”
8. iFundWomen: “is a crowdfunding ecosystem designed for and by female entrepreneurs. It is the only crowdfunding ecosystem designed specifically for early-stage, female entrepreneurs.”
   Unique Offering: “iFundWomen takes a holistic approach to startup funding by offering a flexible crowdfunding platform, expert crowdfunding coaching, professional video production, and a private community for you to connect with other female founders in the hustle.”
9. The Monarq Incubator: powers exceptional women-led startups. The incubator helps very early stage startups get ready to fundraise, by providing mentorship and community resources.
   Unique offering: monthly programming to help each startup get set up to pitch and fundraise.

This story is part of a series that explores what is going on the “women’s space.” Check out the other stories in this series here.

I am Mansi Gupta, founder of Unconform Studio, a design and strategy shop focused on women and systems level change. We write about design, impact, gender equity, unlearning patriarchy and more. Don’t forget to subscribe to us for more Unconforming Stories.