A recent report from PitchBook highlights the ongoing struggle for women-led founding teams in securing venture capital funding. According to the report, all-women founding teams raised a mere 1.9% of all venture capital dollars allocated through Q3 this year, amounting to $2.4 billion out of the total $125.85 billion. This percentage is only slightly lower than the 2% raised in the same period last year, which amounted to $4.1 billion out of $204.8 billion.
The latest Q3 data reveals that women-led founding teams continue to face significant challenges in securing venture capital funding. Although mixed-gender teams have experienced more success, the percentage of funding allocated to all-women teams remains stagnant at around 1.9%. Despite these obstacles, women founders remain resilient, leveraging their persistence and diligence to secure investment.
All-Women Founding Teams Face Challenges in Q3
In Q3 specifically, all-women founding teams saw a year-over-year decrease in funding, securing only 1.6% of the $36.7 billion allocated to venture capital investments this quarter. This decline is evident when compared to Q3 2022, where these teams raised about 2.1% of $46.4 billion in funding. These figures reveal a consistent trend in which the percentage of funding allocated to all-women teams has hovered around 1.9% in recent years.
Kyle Stanford, the lead VC analyst at PitchBook, suggests that the lack of outsized deals going to all-women teams prevents any significant positive movement in these numbers. Additionally, although the number of deals going to all-women teams is growing slowly, the relatively smaller size of these deals keeps the overall deal value low and stable.
Mixed-Gender Teams Experience Success
In contrast to all-women founding teams, companies with at least one female co-founder have fared better. These mixed-gender teams raised 28.1% of all venture capital dollars so far this year, a substantial increase from the previous year’s 18.2%. In Q3 alone, mixed-gender teams secured $9.9 billion out of the $36.7 billion allocated to venture investments, almost on par with the $9.5 billion secured in Q3 2022.
Challenges Persist Despite Support
Despite the lack of funding for women-led teams, there hasn’t been a noticeable pullback in supporting women in the industry. However, raising funds remains a formidable task. Many women founders like Marusya Glazkova, co-founder of SaaS House of Pitch, have encountered biases and gender-based assumptions from investors. While Glazkova remains confident that she will reach her pre-seed funding target of $500,000 before the year ends, she acknowledges the selective nature of investment checks in the current climate.
Ruby Gadelrab Tudor, founder of health company MDisrupt, also acknowledges the unique challenges faced in fundraising this year, such as the tough macroeconomic climate, war, falling valuations, and a longer due diligence process. Nonetheless, Tudor successfully closed a $3 million seed round earlier this month, with the majority of participants being women, including women of color.