Giving Compass' Take:
- Geri Stengel shares various innovative strategies for female founders to access more capital and support from capital stakeholders.
- What are the significant issues that female founders experience? How can donors invest in women-led funds?
- Learn about women-led organizations and climate change.
What is Giving Compass?
We connect donors to learning resources and ways to support community-led solutions. Learn more about us.
Venture capital investment has surged in 2021. Investment dollars for the first three quarters of 2021 have nearly doubled from 2020, according to The Q3 2021 PitchBook-NVCA Venture Monitor.
While investment dollars have increased in startups with at least one female founder, their share of dollars in 2021—17.2%—hasn't reached the record set in 2018—18.5%—the year the #MeToo movement took off.
A whopping 80.2% of venture capital went to all-male founded companies. Only 2.0% went to all-female-founded companies. That's an imbalance that Julie Castro Abrams wants to fix. She's managing partner at How Women Invest, a venture capital fund dedicated to shifting the capital landscape by supporting women-led companies. "Women are getting a message that you have to have a male co-founder to get funding. That's unacceptable."
The industry has a lot of work to do! Institutional investors, the government, and accredited women investors can ensure that female-founded companies get their fair share of venture capital.
"Institutional investors are the most powerful force in the venture world," said Trish Costello, founder and CEO at Portfolia, investment funds designed for women who back innovative companies for returns and impact. "They are the ones with the most significant money."
"The data shows that funds founded by women and POC return more money to their institutional investors," Castro Abrams said. "These massive venture firms do not necessarily return consistently well."
"Family offices are being the most innovative," said Costello. Family offices are putting their money to work in novel ways that make both financial and social returns by investing in gender-lens venture funds. "Corporate funds also have the leeway to invest in both financial and impact returns. Goldman Sachs, Morgan Stanley, and Salesforce see the opportunities in investing in women and POC and are doing so." If they can do it, other institutional investors can, too!
Read the full article about female founders in venture capitalism by Geri Stengel at Forbes.