If you're a female CEO looking for funding the numbers have traditionally looked bleak. According to research conducted by the multi-university program The Diana Project, only 2.7 percent of U.S. companies that received venture capital funding from 2011 to 2013 had a female at the helm. Anu Duggal is swimming against this current. Founder of Female Founders Fund--dubbed F Cubed--in 2013 she established a venture capital fund that has invested nearly $6 million in only seed-stage startups launched by women. Here's why Duggal believes there's a significant amount of money to be made from investing in women-led startups.
The number of funded female entrepreneurs is on the rise.
Defining Series A funding as a financing round from between $2.5 million and $15 million led by an institutional investor, Duggal says last year in New York 12 companies that received A round funding--13 percent of all A rounds in the city--had female founder CEOs. Another 19 companies that received A funding had female founding team members. Compare those numbers with 2013: In New York only four companies with a female on the founding team raised an A round and only one did so with a female founder as CEO. That's 1100 percent growth year-over-year, F Cubed found when it recently crunched the numbers. In Silicon Valley it's a similar story: Last year 24 female Bay Area CEOs raised Series A funding, compared with 19 in 2013.
Affordable technology empowers women with a different skillset to start companies.
Ten years ago launching a tech startup necessitated hard-core skills such as coding and programming. Today, thanks to affordable cloud platforms that provide infrastructure which enables entrepreneurship, women with backgrounds in marketing, data analysis and branding can get in on the action. "You're seeing more and more women start companies that are really catering to either problems that they see in their day to day lives, or just figuring out ways to make either products or services more efficient," Duggal says.
Women have an edge when it comes mining the humongous e-commerce market.
Duggal says up to 75 percent of the people shopping online--for themselves and their households--are women, which gives female entrepreneurs who understand this market unique insight. "Many of these companies 10 or 15 years ago probably wouldn't have worked, because the market just wasn't there for them," she says.
Want more numbers on this subject? Check out the rest of F Cubed's research regarding female founders and funding.