Female investors and female founders are demonstrating the promise of an overlooked group of entrepreneurs.
When it comes to women and venture capital, the most often-cited numbers don't show much progress. If anything, they seem to be saying that things are getting worse. Using the most current data available, Babson's Diana Project found that teams with a woman co-founder got 18 percent of venture capital in 2013; at the end of 2017, Crunchbase, using a different methodology, pegged that number at just 10 percent.
But in the past few months, there have been a number of signs that women entrepreneurs, and ventures designed to funnel more money to them, are finally starting to break through. There's new money being allocated to women, and some of the money already invested in women entrepreneurs is starting to pay off, big-time.
In roughly chronological order, here are seven signs the ground is beginning to shift for women founders:
1. New Voices looks to invest $100 million in black women.In November 2017, Richelieu Dennis sold his company, Sundial Brands, to Unilever. Sundial built its business developing and selling hair and skincare products for Black women, and Dennis has thought long and hard about the community upon which his business depends. As part of the Unilever deal, he insisted on the formation of the New Voices Fund, a $100 million venture fund that will invest in Black women entrepreneurs. At Black Women Talk Tech in February, Richelieu said that he expected New Voices to make its first investments in the second quarter of 2018.
2. A dream investor backs women in tech.Melinda Gates is no stranger to entrepreneurship, of course. But in February she made her first startup investment from Pivotal Ventures, which is separate from Gates Foundation money. Gates put $200,000 into Alice, a machine-learning platform designed to integrate more women into the startup ecosystem. It's co-founded by Elizabeth Gore and Carolyn Rodz. The investment is structured as a so-called impact investment, and doesn't need to be repaid.
In a story written by my colleague Diana Ransom, Gates made it clear that she's serious about supporting women in tech. "The data tells us that a lack of diversity in tech limits innovation," she said. "If we choose to accept the status quo, we're also accepting the constraints it imposes on human progress."
3. Women take on traditional venture capital with All Raise.
"Last year shone a spotlight on all the bad things you hear about venture capitalists and startups," says Jess Lee, the former CEO of Polyvore, now a partner at Sequoia Capital. But when she spoke with Aileen Lee, the founder of Cowboy Ventures, she found Aileen Lee had a slightly different take: "It feels like there is a window to do things." The first meeting of what would become All Raise, which became an association for women in venture capital, was a dinner of about 15 women held last summer. By April, All Raise had officially launched with two big goals: Double the number of women in venture capital and double the share of venture capital going to women.
Since then, All Raise has instituted Female Founder Office Hours, recruiting 30 venture capitalists to provide advice and mentoring at five live events in San Francisco, New York, Los Angeles, and Boston. They also encouraged more than 700 founders to sign a pledge saying that the diversity of their investors was important to them. Says Maha Ibrahim, a founding member of All Raise and a general partner at Canaan Partners, "There has been more activity around females, minorities, and people of color in the last couple of years than I've seen in my 18 years in the business." All Raise's next task: Recruiting men to join the cause.
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