Reflecting on Female Founders’ Performance in 2019
Across the U.S., 21 female-founded unicorns emerged in 2019.[1] Female founders continued to make strides globally as well. 20% of newly funded startups in 2019 had a female founder, amounting to a doubling of female co-founded companies since 2009.[2] In 2019, $26.7 billion was invested into companies globally with at least one female co-founder representing 13% of all seed, venture and corporate venture funding flows.[3] Companies led solely by female founders received $6.1B and roughly 3% of venture capital dollars worldwide, indicating that female-focused VCs still have a critical role to play in accelerating capital to female talent.
In the U.S., venture capitalists set records for the deal volume and dollar value issued to female co-founded companies with $18.3B in funding across 2,180+ deals.[4] Venture capital investment in U.S.-based female-only founding teams hit $3.3+ billion in 2019, also an all-time high.[5] At the student level, there was a significant increase in companies started by women with ⅓ of Dorm Room Fund’s pipeline of student startups led by female founders.[6]
From an asset class perspective, angel and seed-stage rounds experienced growth in 2019 and set a record for a dollar volume of $6.8B+ in capital deployed globally.[7] Just over 20% of funding for seed series startups went to female founded or female co-founded teams. At Series A & B rounds, funding for female founded or female co-founded companies hovered at roughly 15%. Dollar volume for Series A & B rounds was up 6+% at roughly $49B.[8]
Investment activity in New York continued to grow rapidly as the city embraced its role as the second highest ranked startup ecosystem in the world after Silicon Valley. 7,000+ startups are currently headquartered in New York and the entire ecosystem is valued at $71B.[9] The city also continues to be a magnet for exceptional female founder talent with a strong ecosystem that supports female entrepreneurship. New York ranks as first overall among 50 global cities for its ability to attract and support female entrepreneurs. In New York, an estimated 5% of venture capital funding has gone to companies founded solely by women in New York compared to less than 2% in San Francisco.[10]
In 2019, financial institutions provided female founders with research and action to back the typical lip service. Morgan Stanley produced research in October 2019 highlighting the $4 trillion loss in potential returns that VCs are facing by not investing in more diverse founders.[11] In November 2019, All Raise, Pitchbook and Launch with GS published various findings on the benefits female-founded companies are poised to deliver. Notably, female-founded startups take substantially less time to exit than the broader market, a trend that indicates a key metric of success.[12]
Overall, funding for female founded and co-founded companies hit an all-time high in 2019 of $18.3B…and when we have more female founders, we have a more diverse startup ecosystem. Investors will state anecdotally that female-founded companies tend to hire more women, and we have research to support that as companies with at least one female founder hire 2.5X more women! [13]
