The rise of the female founder

We’re all too familiar with the very real gender gap within the tech community. Women are underrepresented as engineers, management, investors, and founders.

A commonly cited statistic is that only 7 percent of U.S. venture capital deals go to women founders and CEOs. Business Insider recently crunched the numbers behind 26 of the top venture capital funds in Silicon Valley and learned that the percentage of female-founded startups in their portfolios ranged from a high of 19% to a low of just 4%.

However, there are signs that the situation, at least when it comes to female founders, is improving. At Version One, we’re seeing an increasing number of pitches from female entrepreneurs. Three out of our six investments in 2014 are female-led companies (Danielle Morrill at Mattermark and two unannounced deals) – which means that 25% of our portfolio companies of now 20 companies have female founders.

What’s even more telling are the types of companies involved. In the past, female CEOs were largely limited to those areas where they have a distinct advantage over their male counterparts (i.e. selling primarily to a female audience). But today we’re seeing women building companies across all sectors and areas.

Some of this trend might be due to the favorable environment for first-time entrepreneurs. The rise of the cloud and SaaS has eliminated many of the upfront expenditures needed for a tech start-up, creating opportunities for a more diverse range of entrepreneurs, including women, to bring their ideas to market.

This is a very positive development, as the broader the entrepreneurial base the better. Gender diversity, as with diversity of any kind, results in a fuller range of ideas, perspectives, and approaches to problems. And an interesting study found that women-run private tech companies are more capital-efficient and bring in a 35% higher return on investment (and 12% higher when venture backed).

Yet while I’m happy that gender diversity is on the upswing in tech, the truth of the matter is that we’re still talking about female founders as the exception. There are no articles, blogs, conferences, or reports focused on the number of male founders. Hopefully, 2014 will be the year we don’t have to talk anymore about female founders. Then we’ll know that real progress was made.


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