New report: more female founders are being funded and female investors are on the rise

  
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“For women taking control of their financial future”

-Jana Hlistova


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In this week’s newsletter, we focus on a US report published by Pitchbook and supported by JP Morgan and Beyond the Billion on Women in VC.

Whilst the pandemic disproportionately impacted female founders in 2020, female-founded companies have shattered the previous annual deal value record in just the first three quarters of 2021. And crucially, the number of US female investors is at a record high.

You can review the news in brief so you stay on top of global financial, economic and investing trends.

I hope you enjoy this week’s newsletter.

Until next week,

Jana


More female founders are being funded and female investors are on the rise

A new US report confirms that the startup & investor landscape is changing for the better, for women.


Female founders have an uphill climb when it comes to accessing capital for their startup. In general, it takes women longer to raise and they raise far less money compared to their male peers.

A new report (US) published with support from J.P. Morgan and Beyond The Billion, found that whilst the pandemic disproportionately impacted female founders in 2020, female-founded companies have shattered the previous annual deal value record in just the first three quarters of 2021, as per Pitchbook.

And crucially, the number of US female investors is at a record high:

  • At the end of 2019, 12% of general partners at venture capital firms were women and there were 740 female angel investors.

  • Today, women make up 15% of general partners at venture capital firms, and there are now 1,000+ female angel investors.

Female investors are crucial…

…to women getting funding for their startups.

Based on research, women invest in female founders three times the rate men do. They also apply a new lens to investing and represent the lived experience and perspective of 51% of the population.

Women will appreciate products and services aimed at the female market in a way male investors simply can not -unless they invest the time and do the research. And many simply do not.

Female founders are not only up against gender bias, but they have to spend more time educating the majority male investors on their market and product.

It follows that female entrepreneurs have less resources to run their company for longer, so when they do raise capital (for their startup), they tend to be more effective money managers and generate a greater return on investment.

As more female founders exit their companies and generate higher exits, we’re likely to see more capital flow back into women.

Women (and men) investing back into women is a crucial part of diversifying the money flow, backing female founders, growing entirely new industries and companies. And ultimately driving higher returns on investment.

Here are the key points from the report (US only):

  • Female-founded companies raised $40.4bn across 2,661 deals through the first three quarters of 2021, shattering the previous annual deal value record of $23.7bn in 2019.

  • Venture investors have closed over 2,000 deals totaling $30bn with female-founded technology companies thus far in 2021 – an 83% increase in value over 2020 levels already.

  • Exit value year-to-date ($58.8bn) has more than doubled the previous annual record, marking a 144% increase for female-founded startup exits compared to the overall US VC market's 102% increase.

  • Exit volume is also up, with the 223 liquidity events by female-founded companies in 2021 representing a 12% increase from full-year 2020 figures. 2021 is on pace to be the eleventh straight year that female-founded companies exited faster than the broader market (with a 3% increase).

Gender lens investing is simply good business.

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