Venture capital investments in female-founded companies more than doubled in value from 2017 to 2018, according to a study by PitchBook and All Raise, a non-profit organization accelerating the success of female founders and funders.

The study, supported by divisions of Goldman Sachs and Microsoft, found that VC investment in startups with at least one female founder more than doubled to $46 billion in 2018 from $21.9 billion in 2017.

"It's an incredible step," Jenny Abramson, an active member of All Raise, told Cheddar Tuesday. "To see that kind of exponential growth, both in terms of the numbers of deals getting funded as well as the dollars going, is incredible."

The study also found that companies with a female founder are more likely to exit one year faster than companies with male-only founding teams. Recent reports also show that investor returns are higher, revenue is higher, and companies are more capital-efficient when a female is part of the founder or leadership team.

"In the private markets, time is money," Abramson said, referencing the accelerated exits. "So, this is a very exciting report."

<i>Cheddar</i>

While there's lots of good news in this report, it does highlight some areas in need of improvement. According to the study, in the San Francisco bay area, VC funding into female founding companies was just 10 percent. That number improves to 17 percent in New York City and 28 percent in Los Angeles.

"The numbers in L.A. and New York are pretty impressive compared to Silicon Valley," Abramson said.

Abramson said that there are a number of reasons why some cities are leveling the playing field better than others, citing better networking and mentorship opportunities in L.A. in New York. Still, Abramson notes, a bias toward familiarity may be swaying VC dollars.

"Some of this has to do with the age-old part of venture capital, which is pattern recognition," Abramson said. "When you don't have perfect data on businesses you're investing in, you often invest with some unconscious bias. I think that's traditionally been the case in Silicon Valley."

Abramson, who is the founder and a managing partner at female-centric VC firm Rethink Impact, says firms like her own and movements like All Raise have aided in bringing more awareness and action to the problem.

"Movements, like All Raise and #MeToo and others, are really mattering and really helping people see that this is the moment," she said.

Share:
More In Business
Michigan Judge Sentences Walmart Shoplifters to Wash Parking Lot Cars
A Michigan judge is putting sponges in the hands of shoplifters and ordering them to wash cars in a Walmart parking lot when spring weather arrives. Genesee County Judge Jeffrey Clothier hopes the unusual form of community service discourages people from stealing from Walmart. The judge also wants to reward shoppers with free car washes. Clothier says he began ordering “Walmart wash” sentences this week for shoplifting at the store in Grand Blanc Township. He believes 75 to 100 people eventually will be ordered to wash cars this spring. Clothier says he will be washing cars alongside them when the time comes.
State Department Halts Plan to buy $400M of Armored Tesla Vehicles
The State Department had been in talks with Elon Musk’s Tesla company to buy armored electric vehicles, but the plans have been put on hold by the Trump administration after reports emerged about a potential $400 million purchase. A State Department spokesperson said the electric car company owned by Musk was the only one that expressed interest back in May 2024. The deal with Tesla was only in its planning phases but it was forecast to be the largest contract of the year. It shows how some of his wealth has come and was still expected to come from taxpayers.
Load More