COVID-19 set the precedent for the future in terms of Venture Capital fundraising. But even though funding increased that does not mean that there was an increase in the diversity of those who are receiving it. As it pertains to gender though, the divide is getting slimmer and slimmer.
In research done by PitchBook, in the first three quarters of 2021, female-founded companies raised $40.4 billion in 2,661 agreements, nearly twice the $23.7 billion raised in 2019 and more than ten times the $3.6 billion raised in 2011. It’s a hollow victory though as companies run by women are valued lower than their male counterparts. Despite rising, venture capital totals in general, women-founded startups in the United States saw their deal count fall by 2% and total dollars invested in their businesses dip by 3% in 2020.
Female-founded businesses raised fewer dollars from fewer rounds as the venture capital pool grew wider. According to PitchBook, female founders closed 150 to 200 deals per quarter in 2019, valuing $700 million to $950 million. So the dealings are increasing. Female-founded businesses are racking up significant exit numbers, and their performance is improving quicker than the general market.
The exit value of female-founded firms based in the United States has reached $58.8 billion, up 144 percent from 2020, according to the PitchBook-NVCA report. Exit totals in the bigger domestic venture market have increased by a relatively modest 102 percent during the same time period. The number of exits documented also supports those excellent dollar results: So far this year, 223 domestic female-founded firms have exited, a 12 percent increase over last year.
The numbers are increasing and money is being exchanged in the right hands. But all in all, is it at an acceptable pace?
This story was originally covered by Tech Crunch