Greycroft
- The funding going to women-run startups remains stubbornly low, with startups led by all women getting less than 3% of the capital invested in US startups in 2019, according to PitchBook data.
- Dana Settle, a founding partner at Greycroft Partners, said the inequality starts at the early funding stages because female founders often are more comfortable pitching to female investors, of whom there are fewer.
- Settle said there's no silver bullet to closing the funding gap, but that funders and startups all play a part.
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The share of startup funding going to women-run startups is stubbornly low, with all female-led startups getting just 2.8% of the capital that was invested in US startups in 2019, according to PitchBook data. Eight percent went to mixed-gender teams while 89 percent went to all-male teams.
The picture isn't great on the funding side, either. Only nine of the top 100 VCs are women, according to CB Insights.
Dana Settle, a founding partner at Greycroft Partners, is a rarity in her field. She said the funding for female founders is improving, however slowly.
But she said that to close the gap, change needs to start at the bottom. Female founders are more likely to present their ideas to female investors, of whom there are relatively few, Settle said during a wide-ranging conversation about themes and companies she's excited about heading into 2020.
"It's a function of unconscious bias," she said. "It is a natural human thing to present to people you feel more comfortable with. If you look at the VC stack, there are more early stages that are women, and as you go up there are a lot fewer growth investors who are women."
Greycroft is known for backing female-founded companies including Clique, Eloquii, and TheRealReal, and Ellie Wheeler, another Greycroft partner, has also been vocal on this topic. In a recent interview on CNBC she said most VC decision makers are men and that the funding gap with female-raised rounds smaller over time compared to their male counterparts.
She also said there needs to be more mentorship of women and for VC firms to set the agenda from the top.
"It's a little bit of hand-to-hand combat and top down," Settle said. "There is no silver bullet."
Settle also called on VCs to encourage female founders to take their companies public.
"The real change takes place when female founders build bigger, independent companies, like Stitchfix, TheRealReal," she said. "They're creating more wealth across their cap tables and the cap tables tend to be more diverse, so that gives more people opportunity to become an angel investor. If you look at the big outcomes, they've been largely founded by men, and the cap tables tend to be men."