Betting on Women: The Price of a Good Idea

For this one, we’re going to be learning together. I want to talk about venture capital, VC, if you will. My curiosity about venture capital was sparked by the slow, creeping realization that I will have to graduate at some point. Mortifying, I know. When I told my mom I wasn't ready, she reminded me I'm 29 and need to wrap it up. 😆

For this article, Linkedin and Crunchbase are my best friends.

First, I want to mention where the word “seed” in VC comes from. It’s like planting a seed. A company needs the initial investment (seed, water, soil) to be able to grow into a full company with revenue and profits.

A lot of VC specifics depend on stage, amount, and source. Here's a quick breakdown.

Angel: Often provided by personal funds from individual investors, friends, or family, typically totaling less than $500K. This is typically where the product or service idea develops and decision to launch takes shape.

Pre-seed: Before any VC firm gets involved, and is mostly wealthy individuals, friends, or family that are chipping in. This is important because, to gain institutional recognition of your company, its valuable to get proof of concept. It needs to be clear you have others in your corner supporting the growth of the company. It is likely less $1M. This is when founders get their momentum.

Seed: At this point, the company is able to gain far more traction, institutional (VC) recognition, and hire staff, making their company substantial and have more popularity. Funding in this round is anywhere from $10K-$2M.

Series A: Principally for earlier stage companies and can range from $1M-$30M. This is also likely the point where the company gains customers or clients.

Series B: similar to Series A, however, far more focused on scaling the company.

Series C: Here we’re talking funding of $10M+ and a clear path for growth of the company.

Now, here are two startups, both founded almost entirely by women, and where they stand.

These companies are great and it’s especially exciting that Experiment Beauty is fully founded by women and that two of the three founders of Helex are women. You know what’s even more impressive about this? The landscape these companies are operating in.

Researchers at the Massachusetts Institute of Technology published a study that found when they control for pitch and tone during an investor meeting, out of 521 people, 68% of participants would fund ventures proposed by founders that are men¹. Not only are there fewer women founders, but that gap in representation extends to investors as well, although there has been some growth.

The incredible Female Founder Fund² put the numbers together and found that in 2014, there were 479 VC deals for teams led by only women. That number almost doubled by 2024, with 816 deals. Additionally, funding directed to teams with a female co-founder rose from 11.8% in 2014 to 20.6% in 2024. Interestingly, the VC dollars spent on all-women teams has changed little, and actually decreased, from 2.4% to 2.1% from 2014 to 2024 respectively. In 2024, 83.6% of VC dollars went to all male teams³. There’s clearly still work to be done.

Here’s what the data also shows: when we invest in women, everyone wins. A Boston Consulting Group report found that the global GDP could increase around 3% just by investing in women-led companies at the same rate as for men⁴. I have to mention one more piece of information I found particularly interest. A report from UBS, the global wealth management company, cited an article that found “on average, women generate 78 cents of revenue per dollar invested, compared with 31 cents for the men.⁵” I'm a data person, I just follow where the numbers lead, and it looks like it’s leading to more women-led companies should be funded.

Photo by Sortter on Unsplash