Useful Stats: Female-founded companies lag in VC funding, more likely to receive VC deals in earlier than later stages, 2014-2023

While the growth of female-founded and co-founded companies has increased at a faster rate than those of male-founded and co-founded and mixed gender founded companies, it is still a smaller amount than the other two. Additionally, these companies are more likely to receive a higher proportion of deals occurring earlier in the VC pipeline.

Since 2014, companies founded or co-founded by a female have increased by the largest amount of any gender combination. Sixty percent of these founders have received a venture capital (VC) deal, according to SSTI analysis of PitchBook data. Across both male- and female-founded or co-founded companies, this figure drops to a relatively lower 29%, while those founded or co-founded by a male have increased 24% over the same period.

The spread of deal types making up these investments, as well as the amount of capital invested, differs greatly; in 2023, female-founded and co-founded companies received primarily pre/accelerator/incubator deals, while male-founded and co-founded companies, as well as those across the two gender groupings, primarily received later-stage VC deals.

A prior Useful Stats article, “Female founders and VC, an overview,” explored the number of female-founded and co-founded companies and deals, as well as capital invested, across states, deal types, and industry verticals. This article will build on parts of those data, adding additional context for those male-founded and co-founded and those both female- and male-founded and co-founded companies. Numbers for female-founded and co-founded companies will differ slightly between this article and the prior due to the timing in which the data was pulled.

Methodological notes

This article uses data about female, male, and female and male founders and co-founders, specifically that of the number of companies, deals, and capital invested. Data was filtered down in PitchBook to only pre/accelerator/incubator, angel,[1] seed, early stage, and later stage VC deals. Note that if a company received, for example, one angel and one seed deal in a given year, it would be counted as a company under both deal types.

Pre/Accelerator/incubator deals, as defined by PitchBook, are equity-financed by an accelerator or incubator (approximately 90% of the deals in this category), and by product or equity crowdfunding.

The state or territory attributed to any of the metrics is that of the current headquarters location of the company receiving the investment.

This article uses Pitchbook data drawn on 5/6/2024, from 2014 to 2023.

The data used in this article should be interpreted cautiously, especially regarding recency bias. New data is constantly being collected and updated, with new companies formed and VC deals made; due to the nature of these data, older years tend to be more complete, and more recent years underrepresented within databases like PitchBook’s.

Note that the female-founded and co-founded and male-founded and co-founded company counts will not add to equal the female and male-founded and co-founded company count. This is due to the overlaps between those companies co-founded between the female and male categories. Within the 10 years of data, VC deals to female-founded and co-founded companies total approximately 46,700 companies, male-founded and co-founded approximately 158,000, and female and male-founded and co-founded approximately 171,000.

Female-and male-founded and female- and male-co-founded companies

Trends by deal type and gender

As previously mentioned, the number of companies has increased across all gender combinations of founders’ gender explored in this article, with large differences between each. The number of female-co-founded companies has increased by 60% (3,169 to 5,069) from 2014 to 2023, while the number of male-co-founded companies has increased 24% (13,000 to 16,120). The total of all funded companies, regardless of the gender of founders, increased 29% over the same period, from 13,777 to 17,725.

All three groups peaked in 2021, with female-founded and co-founded companies at 105% greater than their 2014 values, male-founded co-founded companies at 55% greater, and female/male total at 60% greater.

Since 2021, all gender groupings have dropped approximately 20%, with those female-founded and co-founded having the largest decrease at 22%.

By deal type, pre/accelerator/incubator had the largest number of companies across all gender categories in 2014, while female-founded and co-founded companies had seed deals as the next largest strata of deals to companies, and the other gender categories had early-stage VC instead. This trend has shifted across the years, with a substantial increase in companies receiving seed stage deals across all gender categories, becoming the largest strata of deals in 2021 and 2022 before shifting again to different primary deal types in 2023.

In 2023, later-stage VC deals had become the most prominent deal type for both male-founded and co-founded companies and the male/female total, while female-founded and co-founded companies remained predominantly pre/accelerator/incubator.

See Figure 1 below for more detail.

Figure 1: VC deals by type to companies, by gender and year

Trends by state and gender

By state, many of the same states known for their high VC activities have the largest number of companies with VC deals across all gender categories, such as California, New York, Texas, Massachusetts, and Florida.

In terms of growth, over the past 10 years, Alabama, Delaware, and Puerto Rico had the largest increases in the number of female-founded and co-founded companies receiving VC deals; North Dakota, Puerto Rico, and Delaware had the largest increases for those male-founded and co-founded and female and male-founded and co-founded.

Female-founded and co-founded companies with VC deals grew in the most states, decreasing in just five (Nevada, South Carolina, Kansas, Idaho, and South Dakota). Those that are male-founded and co-founded had the most states with decreases, 11, including many larger states like Arizona, Oregon, and Ohio. Those that are either female or male-founded and co-founded decreased in nine.

See Figure 2 for more detail on these trends. To adjust the data displayed, click on the search bar titled “Enter series to show,” and either type or scroll and click on up to five states. The y-axis (number of companies having received a VC deal) will automatically be scaled to account for the minimum and maximum values of the selected states, allowing for more granular changes to be seen clearly by isolating this sector on the chart.

Figure 2: Multiline chart of the number of companies with VC deals from 2014 to 2023 by state, gender, and year

Trends by state, deal type, and gender

Changes in the concentration of founded and co-founded companies by deal type are not consistent across geographies or gender category. For example, pre/accelerator/incubator deals remained the primary deal type for female-founded and co-founded companies in Arizona from 2014 to 2023, while for male-founded and co-founded companies, the primary deal type shifted from pre/accelerator/incubator to later stage VC over the same period.

Another example is in Connecticut, where the primary deal type shifted from early-stage VC in 2014 to seed in 2023 for female-founded and co-founded companies, but was primarily later-stage VC in both 2014 and 2023 for male-founded and co-founded companies.

For more trends across all 50 states, Puerto Rico, and Washington, D.C., refer to Figure 3.

Figure 3: Number of founded and co-founded companies in each state, by deal type, gender and year

This article was prepared by SSTI using Federal funds under award ED22HDQ3070129 from the Economic Development Administration, U.S. Department of Commerce. The statements, findings, conclusions, and recommendations are those of the author(s) and do not necessarily reflect the views of the Economic Development Administration or the U.S. Department of Commerce.