Steady Support: Female Entrepreneurs Receive Unwavering Funding in 2023

Female-founded companies in the U.S. raised $44.4 billion out of the $170.59 billion in venture capital allocated last year. Such teams raised 26.1% of all venture capital allocated this year, a sizable jump from the 18.2% they picked up last year. This follows the pattern that women founders still fare better with a male co-founder in the mix. Kyle Stanford, lead VC analyst at PitchBook, told TechCrunch+ that it’s difficult to pinpoint a single reason why funding to women founders has dipped a bit, but he added that the decline in deal counts for women founders follows the trends of the broader market. “That is not meant to make activity in female-founded companies look better, but the context of market difficulties is important.”Overall, less than 25% of all deals went to female-founded companies in 2023.

According to new data, female-founded companies in the United States received a total of $44.4 billion in venture capital funding out of the $170.59 billion that was allocated last year. However, a closer look reveals a concerning trend for companies with all-female founding teams. In 2023, these teams only received $3.1 billion, which is a mere 1.8% of the total funds. This is a significant drop from the previous year’s $5.1 billion (2.1%) and even further from the $7.3 billion (also 2.1%) raised in 2021 during the bull market.

Unfortunately, this is the lowest percentage of venture capital ever allocated to all-female founding teams since 2016, when they received 1.6% of all venture funds. However, there is some good news for mixed-gender founding teams as they saw a substantial jump in funding. In 2023, these teams raised 26.1% of all venture capital, a notable increase from the previous year’s 18.2%. This falls in line with the ongoing trend that women founders tend to fare better when they have a male co-founder.

Kyle Stanford, Lead VC Analyst at PitchBook, states that there is no one specific reason for the dip in funding for women founders. He also points out that the overall decline in deal counts for women founders aligns with the broader market trends. However, he acknowledges that the data clearly shows there is still a significant disparity in the market, and there is a lot of progress to be made before it can be considered equitable.

“The venture capital market has faced challenging times in recent years, with a significant decrease in deal counts and a 50% decline in overall deal value between 2021 and 2023,” Stanford explains. “This is not an attempt to paint a prettier picture for female-founded companies; however, it’s crucial to consider the context of these market difficulties.”

Overall, women-founded companies only received less than 25% of the total deals in 2023. The software industry was the most popular category for investments, with over $8.4 billion allocated. Following closely behind were B2B, SaaS, and pharmacy and bio companies. In terms of location, New York City took the top spot for the most deals received by female-founded companies, with San Francisco and Los Angeles following closely behind.

“While New York has been a significant market for a while, it’s encouraging to see it closing the gap with the Bay Area in terms of investment count,” says Stanford. “New York has become a thriving market for founders of all backgrounds, and this is reflected in its high levels of venture capital for female-founded companies.”

In general, the VC market saw declines of nearly 20% in deal count and 50% in deal value between 2021 and 2023. That is not meant to make activity in female-founded companies look better, but the context of market difficulties is important.

Despite these challenges, it is clear that female-founded companies are making strides in the market and achieving success in various industries. While there is still a long way to go in terms of achieving equity, the progress being made is worth recognizing and celebrating. Through continued efforts and support, hopefully, we will see a more balanced and diverse venture capital landscape in the near future.

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Ava Patel

Ava Patel is a cultural critic and commentator with a focus on literature and the arts. She is known for her thought-provoking essays and reviews, and has a talent for bringing new and diverse voices to the forefront of the cultural conversation.

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