Venture capitalists have broken records every quarter this year, pushing more money into the startup ecosystem with bigger and bigger deals. Amid this funding frenzy, some female-founded companies are raising “mega rounds,” including Tia Health ($100 million), Maven Clinic ($110 million), and Insitro ($400 million). Overall, startups with a woman founder raised $25 billion in the first half of 2021—more than the total amount raised by women any full year prior.
It can seem like a moment of triumph for Silicon Valley, which has long been called a boy’s club. But percentage wise, the amount of venture capital going to female entrepreneurs is lower in 2021 than it has been for the last five years. That’s especially true for startups with all-female founding teams, which have raised just 2.3 percent of venture capital this year, according to Crunchbase. Startups with mixed-gender cofounders raised 11.7 percent of funding. In other words: 86 percent of venture funding still goes only to men.
“We’re coming off of three historic years of deployment of venture capital, so in the macro the landscape does seem to be better. But it’s not really,” says Pam Kostka, the CEO of All Raise, a nonprofit that supports female entrepreneurs. Funding numbers have been “flat at best,” with some groups receiving less year-over-year: A report from Project Diane found that Black and Latina female founders received 0.43 percent of venture funding in 2020, down from 0.67 percent the year before.
Women in the industry have been scratching their heads about how to improve these statistics for years. While not an even split between genders, women still start businesses in far greater numbers than their share of VC funding would suggest. In 2017, the investor Aileen Lee emailed a few dozen women in venture suggesting they band together to work on the problem. The email group grew into an informal support group, which later became All Raise, whose mission is to increase both the number of women in VC and the total VC funding to female founders. When it launched in 2018, All Raise’s goal was to see about a quarter of VC dollars going to female founders. But since then, the number has hardly budged.
This year, in particular, has left some female founders feeling left out of a historic venture bonanza. “When you’re reading these headlines about record rounds, you have to ask, who is having this experience?” says Liz Giorgi, the cofounder and CEO of Soona Studios. “It’s certainly not the women I know.”
WIRED spoke to 10 female founders who raised venture capital in the past year. While these women have all succeeded in fundraising for their startups, many of them said that they felt they were held to a different standard, or were subjected to sexist lines of questioning. This was particularly the case in the early stages, when investors have fewer metrics to go off of, and write checks based on their gut feeling about a founder.
“It’s that first round, when you’re an unknown quantity,” says Maria Colacurcio, the CEO of Syndio, an HR analytics company. When Colacurcio raised her Series A, in 2020, she felt confident about the company’s metrics, including its annual recurring revenue. She also felt good about her track record: She’d cofounded the software company Smartsheet, which went public in 2018. But when she met with VCs about Syndio, most of them told her they would need to wait until she could show the company’s metrics year-over-year. That surprised Colacurcio, who had heard of plenty of startups getting millions of dollars without a product at all.
Kostka, from All Raise, says she hears this complaint from women all the time. “We see men with a concept on a napkin who can raise $10 million, and women with $5 million in annual recurring revenue still can’t raise a seed round.”
In her early meetings, Colacurcio says she was judged on her startup’s defensibility, rather than her future vision. In 2018, Harvard researchers observed a similar phenomenon: Investors tend to ask men about their startup’s potential gains, and women about their potential losses. As a result, the researchers concluded, the startups with male founders raised five times as much as those with female founders.
Eventually, Colacurcio met Fern Mandelbaum at Emerson Collective, the impact investment firm founded by Laurene Powell Jobs. Mandelbaum, who has a track record of investing in women, gave Syndio its first deal. After that, Colacurcio says things got better: “Once you’re into the network, everything becomes so much easier.” Now, the startup has raised $83 million in total.
Because so much of early fundraising is about breaking into networks, many advocates have focused on solving the female founder problem by creating more female VCs. By All Raise’s count, 65 percent of VC firms don’t have a single female investor in their ranks. For that reason, the organization has made one of its goals to increase the number of women in VC who can actually write the checks. In 2018, 9 percent of such VCs were women. Now, it’s closer to 14 percent.
Some women in VC are committed to investing specifically in women founders. Female Founders Fund, backed by Melinda French Gates, closed a $57 million round in July, becoming the largest seed fund specifically for female founders. Anu Duggal, the founding partner of Female Founders Fund, says it’s designed to support women raising their first round, when founder bias is most likely to appear. “We all know if you can’t get it, it’s very difficult to build that billion-dollar business,” she says. The portfolio includes startups like Rent the Runway, Maven, and Billie, all of which have gone on to see large valuations. Duggal believes her female-focused thesis “will actually prove to have just as good returns, if not better returns.”
Some female founders bristle at the idea of being part of a “women-only” program. “As a woman, I would prefer to stay away from investors that invest based on gender portfolio goals. I want people to know that I belong,” says Jean Yang, the founder of Akita Software. Yang, who raised a $4 million seed round in 2018, believes plenty of women are great at fundraising—but others get discouraged by the statistics, or by the idea that their gender is a handicap. “If your coach tells you you’re gonna lose, then what’s the point of playing?”
“Fundraising isn’t always easy, but I don’t attribute any of it to gender,” says Meirav Oren, the cofounder of Versatile, a startup that uses machine learning and AI in construction. She believes that all kinds of biases can affect whether an investor clicks with a founder, but that the best startups find a way. Fundraising comes down to knowing how to respond to difficult questions, Oren says, especially the “defensive” type of question that women are more likely to get from investors. “That’s very teachable.”
If that’s the case, then the gender gap in VC funding could be reduced in part by teaching more founders the ins and outs of pitching. Recently, a number of mentoring programs and accelerators have emerged to do just that. Female Founders Alliance runs an accelerator program to help female founders scale their startups, and Google’s startup accelerator announced a 10-week program this year specifically for female founders. As of this year, All Raise offers “office hours” for women to get feedback on their pitches, and launched a virtual “bootcamp” this year to coach women on raising first institutional rounds. (The material is free to anyone.)
Felicia Curcuru, who helped launch the programs at All Raise, says that women tend to communicate their ideas with more humility, which can hurt them in the fundraising process. “One day maybe we can get to a place where investors are used to different styles of communicating, but in the meantime, we try to coach women on how they can come across more confidently,” she says.
While coaching can give women a better chance of closing deals, Curcuru says it’s also important for VCs to look at examples of women who are succeeding as entrepreneurs, to update their model of who can make it as a founder. “When I first came to Silicon Valley nine years ago, there were not this many women IPOing,” she says. Now, women-led companies like Rent the Runway and Away are filing to go public; 23andMe, also run by a woman, went public this year. Other startups, like Maven Clinic and Tia Health, have also proven that female founders can build substantial businesses with enough funding.
Carolyn Witte, the cofounder of Tia Health, says that raising her $100 million Series B felt like a turning point—it’s one of the largest deals for women’s healthcare to date—but earlier rounds were “like pushing a barrel up a mountain.” It took the first vote of confidence from an angel investor, Halle Tecco, to get other investors to buy in. “This is super hard to support with data, but from experience, it feels like women have to prove more,” she says. “Fundraising has not always been easy.”
Giorgi, of Soona Studios, says that closing deals can feel bittersweet. “You end up feeling like you’re the beacon on the hill, but what you’re looking at is hundreds of other people who want the same thing and there isn’t good advice you can give them,” she says. Lately, she volunteers time every week to review other women’s pitch decks, and give them advice before meeting with venture capitalists. She tries not to discourage them too much. “You can raise,” she tells other female founders. “You just have to be willing to go through a hell of a lot more pain.”