Female Founders Only Received 2.2 Percent of Last Year’s VC Funding, But There Is a Silver Lining
Women-led teams received just $1.9 billion of the total $85 billion invested by venture capitalists in 2017.
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Women-led teams received just $1.9 billion of the total $85 billion invested by venture capitalists in 2017, which is just 2.2 percent of the year's total, according to data from VC database PitchBook, an M&A, private equity, and VC database, reported by Fortune. In comparison, all-male teams received $66.9 billion--or 79 percent--of the total amount. The remaining 19 percent went to mixed gender teams or groups whose gender makeup was unconfirmed.
While the difference in funding is massive, it's slightly smaller than in previous years. Female founders raised $1.4 billion, or 1.9 percent, of total funding in 2016. Additionally, with the exception of 2014, last year's total percentage was the highest on record for women-led teams since PitchBook began tracking such data in 2006.
There's no definitive answer as to why female founders raise less venture capital than male founders, but one of the main theories is the lack of female VCs. "The small number of venture firms with female founders and/or an unusually high percentage of female partners invest at elevated levels in female entrepreneurs," according to a 2016 CrunchBase report on venture capital funding.
As a solution, female founders should investigate crowdfunding, where women entrepreneurs raise more money than male founders.