Venture capital is one of the most valuable resources available for entrepreneurs looking to achieve world-changing scale. Venture is the risk-taking capital that supports new ideas while they become businesses. It’s fuel for companies looking to grow.
And right now, it’s not accessible to women.
Venture investing is one of the most inequitable forms of capital. Of the $58.8 billion dollars invested by US-based venture capitalists in 2015 alone, only 7 percent of that funding went to female entrepreneurs. In 2016, that number dropped to—and has since hovered around—just over 2 percent, despite the cultural spotlight on this problem.
Access to venture capital is plagued by an enormous amount of gender bias. Investors evaluate men on vision and promise. Women, however, are judged on proven traction.
We’ve seen firsthand the enormous challenges female entrepreneurs face when they try to raise capital — and at no time more so than the seed stage. Every day we see brilliant, tenacious women creating innovative, necessary companies but struggling to get them funded. For many, it is not uncommon to take more than 6 months and an upwards of 100 meetings to close their seed rounds or be forced to turn to alternative forms of funding that lock them out of the networks they need to grow.
So if we want the future to include companies that consider women, are led by women, and create wealth for women, we need to invest in them. Now. Because we also know that when women do break through and get access to capital, they consistently out-perform their male peers. This creates a new avenue for impact: investing directly in the female founders who are going to become the leaders in innovation and investment of tomorrow.
Innovation is not gender-specific; yet, the seed-stage venture market is increasingly oversaturated, with too many dollars chasing the same few deals. Of the $62 billion invested in 2019, only 2.6 percent went to female founders.
Despite female founders being structurally overlooked at the seed stage, female-founded startups outperform companies with all-male founding teams. Companies with a female founder generate, on average, a 35 percent higher ROI and 12 percent higher revenues than their male peers. The Boston Consulting Group and MassChallenge found women-owned startups deliver twice as much per dollar invested as those founded by men.
At The Helm, we are finding and investing in the undervalued companies at a stage when they show incredible, defensible promise; giving them the capital to deliver on that promise. It is imperative that female voices have a role in creating the companies, technologies, and systems that will shape our future. This is not only a problem that needs to be solved; it is also an opportunity to drive outsized returns by investing capital into the next generation of female-led innovation.