Launched to address the gender venture funding gap where female founders were only receiving 2.2% of venture capital, the campaign was the first-of-its-kind global capital commitment campaign focused on gender-lens investing, a bold measure to inspire venture capitalists to pledge to invest more into female-founded companies.
This report, published with support from Pacific Western Bank, Mastercard, Bank of America and Motley Fool Ventures, found that the consortium deployed 61% of their pledged amount in just two years into almost 800 companies—nine of which were recognized as unicorns at the time, with the remainder expected to be deployed by 2023. An additional analysis from a sample size of 479 of the deals tracked by the consortium’s data partner,
PitchBook, showed that these portfolio companies with female founders, have gone on to raise more than $4 billion within the timeframe of the 2018-2020 pledge campaign.
This report presents both qualitative and quantitative data to specifically answer three core questions:
LP investors, even those committed to investing in diversity, must re-engineer their processes to increase the diversity of their portfolios.
A mismatch exists between legacy LP structures and expressed goals to diversify portfolios showing that systemic bias requires systemic solutions. Despite the best of intentions to back both diverse fund managers and those who invest into diversity, LP investment profile constraints such as check size and track record requirements hinder the ability of emerging fund managers to attract capital.
The issues faced by general partners (GPs) mirror the issues of LPs with systemic barriers being a core.
There is no “pipeline problem” when it comes to funds seeking female founder dealflow.
Rather, fundraising is by far, one of the biggest challenges faced by fund managers investing into female founders.
Almost half of all funds (48%) that were part of this pledge campaign shared how they greatly underestimated what it took to raise their funds; especially if they were deemed to be within the Emerging Manager category (which many LPs define to be Funds I,II, or III). Despite the fund manager’s experience in brand name firms and robust deal flow of female founders, many were hindered from timely deployment due to delays on the fundraising end.
Fundraising while a female founder, is still an experience mired in systemic bias.
Female founders interviewed shared how they had experienced biased lines of questioning and noted how the vast majority of investors’ examples of past patterns of success were almost exclusively referencing male founders. They were encouraged by encountering investors who recognized the opportunity to invest in female founders as a chance to improve their returns and who had committed to this as part of their investment strategy.
Together, we mobilized $1B+ into women-founded companies.
A chapter closes, but the work continues in new forms.
