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Overview:
I’m thrilled to announce that I will be featured on an episode of the Pitch Please podcast hosted by Mike Thibodeau! I have been really enjoying his podcast and we had a great conversation on Resources for Female Founders. The title is “Investing in Women: Strategies for Female Founders to Thrive”.
Pitch Please is based in Toronto, and is a great resource for the Canadian Tech ecosystem. This podcast amplifies founder voices, and connects founders with a community to make the magic happen. Mike’s new series called “Rocket Fuel” puts a spotlight on resources for founders.
In my episode, I shared a lot of resources that are game-changers for startup founders, especially female founders. Mike and I dove into the discussion about the significant disparities in funding, highlighting a great paradox: studies show that companies with women in leadership positions significantly outperform on many dimensions. However, companies with female founding teams get only 2% of total VC funding. Many people are shocked by that statistic, and it’s great to see so many organizations now working to close that funding gap, including here in Canada. This blog post gives a little more background and summarizes some of the resources and solutions we discussed on the podcast.
A funding paradox: Higher performance does not equal more funding
There are big and conflicting pieces of research data out there. The first is that researchers have repeatedly concluded that women-led companies are more successful on a variety of metrics, and the second is that only 2% of VC funding is allocated to women-led companies.
A Harvard study showed firms with more women in senior positions are more profitable, more socially responsible, and provide safer, higher-quality customer experiences.
More data from Standup Ventures on the high performance of woman-led ventures.
Higher performance should attract more investment, right? Well, that's not what's happening.
Massive Gender Funding Gap
In 2023, startups founded solely by women received only 2.1% of total venture capital (VC) funding in the U.S. This percentage has been fairly constant since 2008. Mixed-gender teams fared better, and their funding percentage has been increasing over the years, but the gap remains significant. They receive generally less than 20% of all capital invested. If you look at deal count instead of dollars, the story is still fairly similar. The deal count percentage for all female founding teams is staying fairly constant around 4-6% of all deals. (Tech Transfer Central and Pitchbook). Many in the startup ecosystem are alarmed by these statistics and are working hard to close this gap.
Reasons behind the gender funding gap?
I want to be clear that there are only certain narrow businesses that are VC fundable. Most simply aren’t. So while the challenges and the gender gap are stark in that VC-fundable segment, it doesn’t mean that there is no path for women to found successful businesses. They are doing it all the time and thriving.
However, in the high tech VC ecosystem, we can do better.
Pattern Recognition holds us back. It’s just a fact that women and nonbinary people are underrepresented across the tech ecosystem. It’s just a fact that VCs look for what was successful in the past and try to pattern match. Sometimes that's a great thing, sometimes unconscious bias can set in.
Only 17% of decision makers at VC funds > $50M are women. One seat at the table isn’t enough to impact the culture. < 1 in 5 still means that VC is heavily male dominated.
It is only natural that investors get excited about supporting companies where they immediately relate to the problems being addressed.
Female funders may be more likely to appreciate the scope and market potential for businesses that cater to women.
For instance McKinsey has recently published a report on the Trillion Dollar (with a T) opportunity in Women’s Health (McKinsey Report). This area has traditionally been underfunded.
There are also societal challenges with encouraging women to be entrepreneurs. Women too often don’t feel that this role is for them. We as a society need to keep working at raising confident girls and women who are ready and excited about leadership roles in high tech companies. That’s a multi-faceted challenge that has to begin early, at home and in school.
Solutions
Entrepreneurial communities - peer support and mentorship. Women tend to be comfortable with co-creation.
While female founders may find great support from other women, they should NOT limit themselves to female only communities. It is important that they reach out to the entire startup ecosystem and develop relationships and connections across the board.
Recruiting more women other underrepresented folks to be angel investors and VCs.
Demystifying investing via education and events. Let's make sure that female and other underrepresented founders are well educated about what investors look for, and well prepared to seek funding.
Checking for unconscious bias. Studies have found that investors, including female investors, tend to ask more questions to male entrepreneurs about the future upside potential of their businesses, and ask more questions to female entrepreneurs about the downside risk of their businesses.
Resources for Female Founders
When I talked to several female founders recently, the answer I got most often was that other female founders were the best resource. Find peer groups by joining incubators or accelerators and attending local events. It can be as simple as forming a group chat with 4-5 other founders at different stages to create a forum for asking questions.
Canadian Women’s Network (Bay Area, California): A group of Canadian ex-pats have formed a community to help Canadian female founders get “Silicon Valley Ready”. They host events in the Bay Area, provide mentorship and introductions to investors in both the US and Canada. Their next Pathway to Silicon Valley event in San Francisco is November 19-20 in San Francisco. Registrations are open now.
Show Her the Money movie - I’m currently organizing two watch parties for this new documentary - one in Vancouver and one in San Francisco. It features both female led startups and some high powered female investors. More details on my LinkedIn soon.
Women’s Equity Lab (Branches in Canada and The US) WEL now consists of over 150 women investors from around the world managing a growing portfolio of investments. They are focused on encouraging women to become angel investors. They just look for the best companies and best founders to invest in. But it just so happens that 76% of WEL investments are in women-run and women-led businesses.
Spring Impact Capital (Vancouver) Spring is a very dynamic organization in Vancouver that focuses on Social Impact Investing. They have so many resources for underestimated founders including women, immigrants and women of color.
Right fit capital online education program: https://spring.is/programs/win-vc-essentials-in-right-fit-capital/
More specifically for black women founders: Rise and Raise Connections series: https://spring.is/programs/raise-rise/
2025 Women-led Impact Investor Challenge. Applications open soon. Two sided training and pitch competition for startups and new angel investors over 8 weeks or so. https://spring.is/programs/women-led-impact-investor-challenge-founders/
Lots of Accelerators and Incubator programs across Canada are NOT focused solely on female founders but are great places to meet peers, learn about expectations and make important connections. Orgs such as The Accelerator Centre in Waterloo, Communitech in Waterloo, Mars Discovery District in Toronto, Creative Destruction Lab in Toronto, the Rockies and Vancouver and Volta in Atlantic Canada provide coaching to all early-stage startups. Many allow founders to pick from a broad range of mentors with a variety of backgrounds to help them with whatever issue they may have. They all host lots of events and meetups to help you build your network.
There are lots of incubators, accelerators and training programs in the United States as well.
The most famous is YCombinator. Even if you don’t want to apply there, they have a ton of useful information available online. They have a track record of over 5000 funded companies with a combined valuation of $600B.
The new Startup Investors Lab in the US is a welcoming place for business professionals who want to learn more about becoming angel investors so that they can support early-stage startups. They help new investors unlock the world of early-stage tech investing through a welcoming, low-stress, and inclusive community.
I would love to talk to you about getting your startup Silicon Valley Ready, or talk more in-depth about any of the Resources mentioned above. Feel free to reach out.
It's clear that even all these resources are just the tip of the iceberg. Please add more in the comments and look out for future blog posts with even more resources.
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