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WTF is Happening? Hard Tech Female Founders Are On The Rise

It’s a great time for hard tech female founders!

There have been many women-led businesses who became “unicorns” in the past few months, namely Glossier, Rent the Runway and now Away.

Great news for female founders! But did you know that the newer, lesser-known female founders in areas outside of beauty, fashion, e-commerce, etc. are also on the rise?

I have been a venture investor for the past 9 years and an entrepreneur before that. I have invested in the areas outlined in my book – Blockchain, AI, VR/AR, and Robotics. I was inspired to write the book after speaking to a large Blockchain focused fund in December. When I asked how many female founders were in their portfolio he asked me if they even existed in these fields. At that moment, I thought it was my moral imperative to show him what he was missing. Of course they do! They just didn’t know how to find each other. So I decided to write “WTF Is Happening? Women Tech Founders on the Rise” to showcase a dozen female founders in these areas and make the business case for investing in them.

The data is overwhelming. Female founders still only receive 2% of venture funding while building companies at a higher rate and then outperforming. As an investor, this represents an alpha-generating opportunity and I wanted more investors to be aware of it. Everyone wants to make money! Women need more capital to build businesses that build future technology. We cannot have new technology that only reflects half the population’s input.

Also, showcasing these 13 women is just a start for getting more women and girls to join. Most of the media coverage on female founders is around fashion, e-commerce, and beauty — not around these technologies because they are newer and not yet “unicorns”. It is exactly because they are newer that there is opportunity for parity and breaking patterns from traditional tech and finance industries.

“We cannot have new technology that only reflects half the population’s input.”

One of the biggest takeaways from writing the book and interviewing a dozen of accomplished female founders in these emerging markets is that you do not need a STEM degree to succeed. Entrepreneurship in frontier technologies can take many forms and backgrounds. Even so, STEM is marketed poorly to young women — it should not be seen as a scary territory, but rather a field of opportunities to envision, design and innovate.

 

Article first appeared July 15, 2019 on Swaay.com.

https://www.swaay.com/female-founders-in-blockchain-

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FEMALE FOUNDERS STILL HAVE A LONG WAY TO GO TO REACH VC GENDER EQUALITY

Fortune recently ran an interesting assessment of VC deals by gender and if you’re a glass-half-full person then you’ll be happy to learn that all-women founding teams received $1.9 billion in investment in 2017, which was up from $1.4 billion in 2016.

Putting that sliver of hope off to the side, unfortunately the bad news far outweighs the positive as that $1.9 billion is a paltry 2.2% of the total pot of VC investment. To show the entire picture, all-male teams accounted for 79% of the total pie while mixed-gender groups and those that PitchBook, who contributed the data, were unable to classify, made up the remaining 19%.

And the cavernous discrepancy doesn’t stop at the amount of the investment either—it also encompasses the number of investments as well. Only 368 of the nearly 6,000 VC deals involved female-led startups and just to make matters worse it appears that the amount of the VC checks being written for female founders are significantly less than their male counterparts.

Do you want another uncomfortable stat? The largest investment in a male-led company was for WeWork, who nabbed $3 billion in VC cash. The largest investment in a female-led company was $165 million for Moda Operandi. That amount was a pitiful 5.5% of the investment that WeWork was able to secure.

What makes the disparity even more distressing is that female-led companies are statistically more successful than ones founded by men. According to First Round Capital, female founders outperform male founders by 63% and TechCrunch has stated that female startups have shown to generate a 35% higher ROI and 12% higher revenues than their male counterparts. In addition, companies with women at the helm have higher first-round (64% higher) and last-round (49% higher) valuations.

As important as it is to point out the gap between the genders in VC funding it’s even more imperative to determine a cause for the gulf. Fortune quoted Julie Wainright, founder and CEO of The RealReal, who noted that a major factor was the lack of female VCs. “When you have different businesses that aren’t proven that may appeal more to a female customer and a female investor is going to be able to evaluate that.”

Another explanation could be the inability of a male VC investor to fully understand products or services that come from companies helmed by women and which may be geared at a female consumer. There may also be unconscious (or, in some cases, conscious) biases towards companies run by women. Yet another version is that women tend to ask for exactly what they need rather than what they think they can get.

Kathryn Minshew, co-founder and CEO of millennial career site The Muse, has a different theory, saying that male- and female-founded companies are fundamentally judged differently. “There’s a lot of research that in business, women tend to be judged on performance and men on potential. The same is true in start-up funding in aggregate as well. I felt that we had generally raised based on what we have done,” she says, while male founders raise capital on what they have the potential to do.

Many in the VC world say that there is perhaps a silver lining for female-led companies in all this. Several have said that they have had to adopt the “do more with less” mantra for their startup companies. Instead of luxury offices and daily fruit and snack shipments for their employees, more streamlined companies can get to profitability faster if they are more focused on actually selling their product.

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