The onset of a new decade brings even bigger predictions and resolutions than a typical New Year. Specifically in the venture world, there was a tectonic shift in 2019 that we should take a moment to appreciate and savor as we enter 2020. The swiftly rising tide of women’s voices have created unforeseen momentum that has been strong and is only getting stronger. The force has been so strong, it makes me speculate on why, in this next decade, we should expect and welcome the rise of women to finally reach a full inflection point.
Similar to the sweeping impact technology has made across industries, women are now making equally powerful impacts on our world. Across startups, venture capital, corporate leadership, sports, and politics, the impact women are having is ramping up at a much faster pace than it took even for technology to become a ubiquitous part of all of our lives. This is evident, for example, in the strong growth of female-founded startups. By dollars invested, female-founded startups took in almost 18% of all capital invested last year—higher than the 12% to 14% range seen since 2013. This growth also comes with significant increases in absolute dollars. Last year, more than $46 billion was invested into female-founded startups, more than doubling 2017’s value. To help benchmark, only $3 billion went to female-founded startups in 2010. This is a more than 15-fold increase over the past decade.
In my world, as an LP to Venture Funds, it’s critical to look back on the last decade and see the huge strides within the startup world when it comes to breaking down historically male-centric cultures in Silicon Valley and beyond.
Major milestones have been accomplished in just the last 12 months. Let’s take a few minutes to note the incredible achievements, among them:
The impact of AllRaise.Org
The rise of US VC investment in female founders
'Femtech' as a fast growing category
Melinda Gates impact on gender equality
The insanely fast crescendo of Greta Thunberg
Increasing number of women serving in Congress
Megan Rapinoe (who needs no explanation!)
In many ways, it started with Ellen Pao, formerly of Kleiner Perkins, who had the courage in 2012 to file a lawsuit after facing seven years of sexual harassment and gender discrimination as she sought to make partner at the very revered firm. While this was an initial step, the discrimination lawsuit was not successful and a couple years passed before another bomb hit, but when it did, it had a sweeping impact on the whole startup and venture capital world. In 2017, Susan Fowler wrote a detailed blog post about her time as a site reliability engineer at Uber, highlighting what had become a toxic culture for women, not just at Uber, but across many Silicon Valley startups. This revealing detail eventually led to the fall of Travis Kalanick, Uber’s then CEO—although it took too long and he had too many defendants at the time. But his fall, when it happened, was a decisive blow to what had become known as “Bro Culture” in the West. Susan’s blog gave other women, in similar situations, the courage to speak out, like the many victims of Justin Caldbeck at Binary Capital. This was the first of many venture capitalists to finally face the consequences of their actions. As more women founders and investors spoke out, venture firms began to take action on accusation —and Silicon Valley started to become more disciplined and serious in its treatment and inclusion of female partners and its funding for female founders.
“It’s critical to look back on the last decade and see the huge strides within the startup world when it comes to breaking down historically male-centric cultures in Silicon Valley and beyond.”
Major 2019 (…and 2018…) Milestones
(**not in chronological order**)
April 3, 2018.
Out of the smoke created by the fallout, a very powerful group of investors emerged to support women founders and funders. The group, All Raise set out to increase the number of women in partner positions at venture firms as well as the number of women founders who received venture funding. Notable investors like Aileen Lee @ Cowboy Ventures, Kristen Green @ Forerunner Ventures, Dana Settle @ Greycroft, Rebecca Kaden @ Union Square Ventures, Mark Suster and Kara Nortman @ Upfront Ventures (part of our Cintrifuse Fund I and Fund II portfolios), Brad Feld @ Foundry Group, Jeremy Liew @ Lightspeed, and Emily Melton @ Threshold (formerly part of the Cintrifuse Investment Committee) all joined the fray. While their mission is ongoing, the impact of this group cannot be understated. We’ve seen highly talented women added to firms such as Union Square Ventures, Trinity, Greylock, Andreessen, and Benchmark, among a slate of others. 52 women were named partners of venture capital firms in 2019, bringing the total representation of female partners in venture to 11% in 2019. However, still 71% of venture firms in the US do not have a female partner. Thankfully, though, most of them are looking. Our intel tells us that these firms are facing increased pressure to diversify theirs partnerships as well as their founders, and that female founders are more frequently refusing to take investment dollars from venture firms without female representation. As an LP, this is something we ask early on, in diligence. If there is not a female partner already at the firm, we ask for a clear pathway and timing for their diversity and inclusion planning. We also know that other LPs have been asking the same questions.
“Our intel tells us that these firms are facing increased pressure to diversify theirs partnerships as well as their founders, and that female founders are more frequently refusing to take investment dollars from venture firms without female representation.”
December 9, 2019.
This is leading to a strong increase in the venture funding available to women. 2019 set new funding records for female founders, with $3.3 billion raised by women-only founding teams and $17.2 billion raised by mixed-gender teams. While this only represents about 2.8% and 11.5% of total VC funding in the US, respectively, it shows an incredible growth in support for female founders. However, to demonstrate just how far we have to go: only 20% of VC deals went to female founders.
June 6, 2019.
The increasing representation of women among venture investors is one of the key reasons women’s health startups are rising in attention and funding. The representation of women’s voices in health care has always been lacking. Medical research largely excluded women until the NIH required female representation in 1990 and required the study of optimal dosage, usage, and efficacy by gender. However, the emerging and quickly growing category of innovation for women’s health is seeing a strong and long overdue uptick. ‘Femtech’ really only emerged as a category over the last five years. Femtech funding has increased 812% from 2014 to 2018. Funding for women’s health startups overall ballooned from around $650M in 2017 to over a BILLION in 2018 and 2019, as shown below.
Note: Includes technologies, products, and services intended to improve women’s health outcomes. Updated as of December 20, 2019.
What’s more, the valuation of these deals is increasing—given the megaphone of demand from women for new capabilities. Median valuations of women’s health companies went from around $12M in 2017 to $25M in 2018 and remained in that range in 2019.
We have seen rising interest in the women’s health category from many of our corporate partners at Cintrifuse, including P&G, Kroger, and even several of the insurers we work with. Funders, corporations, and entrepreneurial talent are noticing this sweeping trend, which is driven by the most influential spenders in the household, who are finally taking a stand for better care for themselves. As you can see above, the hockey stick inflection has been realized—especially from 2017 to 2018 and beyond.
October 2, 2019.
Melinda Gates and Pivotal Ventures are committing $1B to women’s equality including women’s advancement, diversity and inclusion, and pay parity. This is an area that has seen little, if any progress, over the last decade. Women are still paid $0.80 per $1.00 white men make, and this disparity is even greater when taking race into account, according to PayScale. Since 2015, this number has changed very little, as shown below.
The large disparity in the uncontrolled gender pay gap is due to the ‘opportunity gap’, the movement and promotion of women in the workplace. Few women ever make their way to C-suite. By late career (age 45+), eight percent of men have risen to an executive level position, compared to three percent of women.
Melinda Gates’ flag is an important one and aims squarely at overcoming this challenge. Her commitment is a whopping sum of money. These acts are creating the tidal wave effect we are starting to see.
DECEMBER 11, 2019.
We are seeing this impact in other areas that are less expected, including politics and global warming. Never before in history have we seen a character like Greta Thunberg. Her rise to the global stage happened at lightning quick speed, and she has handled it with grace, integrity, and intelligence, showing just how powerful the female spirit can be. From August of 2018 when she began promoting “school strikes for the climate”— to today where she has been named the youngest individual Time Person of the Year, has addressed the UN Climate Action Summit in New York, and was also nominated for the 2019 Nobel Peace Prize. I hope this strikes all of you, as it strikes me, as absolutely amazing!
“Her rise to the global stage happened at lightning quick speed, and she has handled it with grace, integrity, and intelligence, showing just how powerful the female spirit can be.”
January 3, 2019.
Congress has also put a flag in the ground, hosting 127 women of their total 535 voting members, up significantly over the past decade. Our 116th Congress, which launched on January 4th 2019, realized a record number of female representatives. This is in addition to the huge leap forward in 2016, when we saw the first female to become a presidential nominee of a major party and to win the popular vote during a presidential election of the United States of America, Hilary Clinton. In our upcoming 2020 elections, there are 14 remaining contenders, 4 of whom are women. If we don’t end up with a female president in 2020, we will likely see a woman in the Oval Office prior to 2030.
December 9, 2019.
Finally, and importantly, a topic that is close to my heart, on December 9, 2019, Megan Rapinoe was named as the Sportsperson of the Year. Only the 4th woman in history to receive the title, Megan Rapinoe has become an icon both on the field and off. She has gained international notoriety, not only for her excellence in soccer, but also for standing on principles of equal rights, equal pay, and standing up to a POTUS who has little tolerance for human differences. Megan has been a leading figure in the gender discrimination lawsuit filed against US Soccer, arguing for equal pay and equal working conditions, which was just granted Class status in October.
We have seen case studies on all of these situations before, but this is a different era. These voices are being heard; they are achieving victories; and they are doing it faster and easier than ever before. It’s real. Women will create the impact we will see over the next decade in a big way. This is our time to change our world, and the world we care about deeply that we leave behind for generations to follow. A world of diversity is a better, more productive, and more inclusive world for everyone.