Getting venture capital financing for your start-up is never easy . . . and it’s much, much tougher if you’re a female entrepreneur.
As reported by Fortune Magazine, a study conducted by venture capital database publisher PitchBook this week found that, in 2017, companies with all-women management teams took in just $1.9 billion of the total $85 billion, or just 2.2 percent, raised from venture capital firms as compared to 91 percent raised by all-male or mixed management teams (the researchers were unable to determine the make up of management teams for the remaining amounts raised).
Women-led teams saw an uptick in the total number of deals funded — the most since the study began in 2006. But it was still super low (368 deals compared to 5,588 for all-male teams). So were deal sizes. Women-owned companies raised an average of $5 million as compared to $12 million for male-led companies.
The biggest deal of the year for female founders ($165 million) was tallied by Moda Operandi, an online luxury fashion retailer. But, compared to the biggest overall deal — shared workspace provider WeWork’s $3 billion — that amount seems a little paltry.
So why the big gap? Fortune’s Valentina Zarya says there’s no one reason.
“Female founders point to the lack of female VCs and the idea that women typically ‘ask for less’ than men do,” she writes. “The research that suggests that women tend to be judged on performance and men on potential — giving men a leg up when it comes to raising funds.”
The good news for female entrepreneurs? The financing gap is decreasing. In 2016 all-female teams raised just 1.9 percent of total venture capital funding, which means that this year (with the exception of 2014) had the largest percentage of female funding since the study began in 2006.
But, like so many other challenges faced by women in the workplace today, there’s still a long way to go.