The Status of Women-Led Companies and VC Investment
Historically, men have dominated the world of venture capital investment, particularly in terms of tech startups and leadership. Over the last few years, we've seen some real change around gender roles and inclusivity, with many more women not only taking leading roles in technology companies but starting their own entrepreneurial journeys. In the United Kingdom, record numbers of women are starting new companies and gaining interest from potential stakeholders. Similar trends have followed in America, with the number of women leaders in tech on the rise, as well as the number of women founding their own businesses. But does this translate into more women receiving venture capital investment? Arch Collective explores.
Women Historically Receive Less Funding Than Men
Harvard Business Review reported that, back in 2020, women-led startups only received 2.3% of venture capital funding. They initially linked this to the way the pandemic affected women vs. men in terms of work. However, when you look back to the previous year, women only received 2.8% of VC funding — hardly a large slice of the pie. That figure dropped again in 2021 to just 2.2%. Depressingly, BIPOC women have an even tougher time getting investment, with black women company founders receiving just 0.34% of VC investment in 2021. In the initial article, HBR goes on to refer to the "boys' club" nature of cautious investors sticking together and how hard that can be for women to break into. This is probably because only around 12% of decision-makers at new ventures are women — but that number is steadily on the rise.
In January 2022, Forbes reported that women-led businesses were making a bounce-back, after the pandemic-fueled "shecession." The coronavirus situation had a disproportionate impact on women compared to men, with unemployment for women 2.9% higher than that of men — but has the same been true for startups and women-led companies seeking VC investment this year?
Trailblazing Women Entrepreneurs in 2022
Despite the grim backdrop of institutionalized sexism within VC investment, plenty of women are shrugging and making a go of it anyway. At the end of 2021, We Are Rosie, a flexible talent marketplace led by Stephanie Nadi Olson, was partially acquired by Align Capital Partners. The company is now valued at $110 million, and Stephanie started the company with just $10,000 of her own money.
Spekit is a women-founded and women-led digital enablement platform designed to make training remote teams easier. It received $12.7 million in Series A funding in 2021 and just secured $45 million in Series B.
Mos is another tech startup, founded by Amira Yahyaoul, offering financial solutions for students, including connecting them to qualified financial advisers when necessary. In February 2022, the company secured $40 million Series B funding, led by Tiger Global.
Tiger Global is clearly on the lookout for great tech ventures, as they also funded Novi Connect, a digital B2B marketplace focused on sustainability and transparency. Novi Connect has now raised a total of $51.8 million, a credit to founder and CEO Kimberley Shenk.
Beyond these innovators, there are women leading some of the most innovated venture capital firms, actively seeking to support company founders underrepresented in the world of investment. Chloe Capital is an entirely women-led investment team, investing in companies also founded by women. Its portfolio is currently valued at $429 million and rising, and its "Invest in Women" tour actively works to connect women-led, early-stage tech companies with investors and advisers.
Backstage Capital's crew is a diverse collection of investment experts, led by Arlan Hamilton, focused on reducing the disparities in funding by investing in women, people of color, and members of the LGBT+ community. Backstage notes that founders from these groups receive less than 10% of all VC funding, and it sees that as a huge opportunity — an opportunity resulting in an extensive portfolio.
Final Word
It's clear to see that while the gender imbalance is by no means close to being fixed, there are plenty of women helping to break down stereotypes, support underrepresented demographics, and remind investors that what matters is innovation and a great product or service.
Women often feel like they have to have a foot in two worlds: excelling at business while managing family life seemingly effortlessly. There's the old adage that women have to work twice as hard for half the pay, and historically, that's applied to VC investment in so much as women-led companies have to really stand out from the crowd to get the funding they need. While that's not the way things should be, thankfully, there are firms out there that recognize the challenges in breaking through the glass ceiling and getting a seat at the table.
Talk to Arch Collective about a fractional CMO with the experience and determination that can get your venture in front of the right investors. Book a 15-minute introductory call with our highly focused marketing team who will match you and your company to the support you need.
Need more news on women in business and marketing strategy insights? Subscribe to Arch Collective's newsletter.
