Women founders disproportionately have received only a minute portion of investor funds, but before the pandemic trends had been going in the right direction.
In 2019, the proportion of dollars that went to female-only founders reached an all-time high at 2.8 percent, yet COVID-19 seems to have halted those tiny gains. 
"COVID has set us back actually," venture capitalist and angel investor Courtney Lawless said.
More than 800 female-founded startups received $4.9 billion in VC funding through mid-December 2020, a 27 percent decrease over the same period in 2019, according to Crunchbase. While the pandemic did influence some decisions, the proportion of dollars that flowed to female-only founders dwindled to 2.3 percent down. 
Furthermore, only 10 out of the new 120 new unicorns — privately-held companies with a valuation of more than $1 billion — joining the Crunchbase Unicorn Board had a female-founder. In 2019, there were 21.
"Female-led unicorns are unicorns in themselves," Lawless said. "When you look across the spectrum of unicorns, it's predominantly men-driven companies. There's not a lot of women who can break into a successful startup, let alone have the resources they need to start one, and that's a problem." 
And it doesn't seem things will get much better this year. Projections from Pitchbook show female-founded companies will only account for 6.2 percent of all VC deals in 2021 and get about 1.5 percent of total capital distributed. 
Across the market, women have been among the first to be let go from their jobs during the pandemic. The Bureau of Labor Statistics pegged the female unemployment rate at 6.1 percent this past February. But taking into account people who have stopped looking for jobs and other factors, the number of women out of work climbed to 9.8 percent, the third-largest group after Black and Latino individuals. Women have been saddled with childcare issues, especially with the lack of options during the coronavirus crisis. They also tend to be employed in lower-wage jobs, not to mention the persistent wage gap. Now it seems it is less likely they will have the opportunities to start something of their own.
One of the main issues behind women-led companies receiving less funding is that there are very few firms that have the opportunity to become a unicorn, pointed out Kay Koplovitz. Koplovitz is the managing partner of Springboard Growth Capital and the chairman of Springboard Enterprises, a nonprofit dedicated to developing women entrepreneurs and helping connect them to capital. Many of them are in spaces that men aren't as familiar with such as fashion, beauty, or medical care for women's health issues. 
"Women are competing in the marketplace and winning, but the general market, I would say, there are more women entrepreneurs in the services business," Koplovitz said. "With VCs, they don't typically fund small consumer-type businesses. It's not necessarily the focus for a lot of funds." 
The problem is that while the next Uber or Airbnb may seem lucrative, it could be more of a gamble since it's very rare to find that "unicorn." Still, tinier ideas that can possibly change the world may be a safer bet. They also need less capital, which means the valuations will remain small. But because investors are looking for the upside of a high valuation, they often overlook the smaller companies that might provide a modest, but potential 10-times return, she added. 
"There's too much emphasis on the fact you're nobody until you're a billion-dollar business,"  Koplovitz explained. "That's not really true. There's a $500 million business, even a $100 million business. A high-quality business has great customers." 
And backing women-led businesses could pay off. Among private technology companies, women-founded firms had a 35 percent higher ROI than their male counterparts on their initial capital investments, per the Kauffman Foundation found. Another study of 350 startups by Boston Consulting Group — 92 of which had at least one female founder — showed the women-run startups generated 78 cents in revenue for every dollar raised, compared to 31 cents for male-led companies. If capital had been spread equally between men and women, investors could have received at least $85 million more.
One way to start getting more women-run companies noticed in the marketplace is to give them more opportunities in leadership roles. Male and female co-founded companies will receive about 11.7 percent of VC capital in 2021 and account for 17.3 percent of deals, per Pitchbook.
"For women, I've seen very much as a defeatist attitude," said SputnikATX managing partner and CEO Oksana Malysheva, which invests in twice the amount of women-led companies compared to the national average. "'Of course, there's no change for me to get funding if it's only 2 percent of women-led companies that receive funding.' But if I fundamentally believe that no one will fund me, then no one will fund me."
Part of it is also going to underserved communities, she added. While SputnikATX is based in Austin, they recruit in startup meetings across Texas including Laredo, Brownsville, and El Paso. The company has no diversity mandate — they're simply looking for the best idea and the best team to execute it. But that doesn't necessarily mean those founders have traditional experience. 
"You should be looking for leadership,"  Malysheva said. "You should be looking for grit. You should look for ability to build teams. Sometimes those traits manifest differently in men and women." 
Women overall need more access to resources and connections to help them find the right investor for their idea, Springboard's Koplovitz noted. Her company realized women were not only excluded from the world of VCs, but they also lacked access to entrepreneurs and investors, lawyers, accountants, and business associates who could introduce them to potential clients. Springboard's network has over 5,000 experts to help startups at every stage of growth. 
"You can't grow isolated by yourself," she said. "You need support. You have to have access."