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What’s the lowdown on funding for female-founded startups? Pitchbook report and local data shed light

Nancy Dahlberg
Nancy Dahlberg
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The share of VC in South Florida women-founded startups badly trails the US average and other large metros.

By Nancy Dahlberg

Across the nation this year, female-founded companies posted the second highest amount of venture capital on record, a report released today by Pitchbook found.

That’s the good news. However, as the report also notes, the longer term trend lines haven’t budged much and women-founded companies still badly trail their male counterparts.

In the Miami-Fort Lauderdale metro area, the numbers are even bleaker. We’ll get to all that.

This is all despite the fact that female founders nationally had lower median burn rates, greater valuation growth at the early stage, and lower valuation declines at the late stage compared to all-male founded companies year-over-year, the report, All In: Women in the US VC Ecosystem, found.

Other positive national highlights of Pitchbook’s report, published with support from Beyond The Billion, J.P. Morgan, Pivoltal Ventures and Apex Group, show that angel investment and unicorn deal value among female-founded companies have both reached their second-highest annual levels.  And, although exit activity fell sharply along with the rest of the VC ecosystem in 2022, female-founded companies continue to outperform the broader market when it comes to the median time it takes to exit.

But on the flip side, the report also shows that females are still very underrepresented at most VC firms.

In this report, female-founded companies are defined as companies with at least one co-founder who is female. The report also looked at all-female-founded companies, a much smaller universe.

Let’s look at the numbers nationally and in South Florida.

The national picture

Female-founded companies still represented only 25.5% of total VC deal count within the broader ecosystem this year – a slight dip from 26.4% in 2021, the report found.

In deal dollars, though, female-founded companies attracted just 17.2% of the pie.

Year-to-date, $32.4 billion has been invested in female-founded companies, meaning 2022 is already the second-highest year in terms of deal value after 2021’s outsized year.

Investment into all-female-founded ventures reached $3.6 billion year-to-date, falling far short of the $154.9 billion for all-male-founded companies so far this year. Female-founded ventures received just 2.3% of the pie.

“In 2022, the key question we must ask ourselves is ‘Are women getting the leftovers from VCs who feel little pressure to change how they do business?’ Despite the fact that the world is looking for breakthrough solutions to some of our most intractable problems and women are innovating and delivering on these, our inability to transform a broken VC ecosystem prevents us from benefiting from these solutions and realizing the financial rewards of doing so,” said Shelly Porges, Co-Founder and Managing Partner of Beyond The Billion.

By the numbers, South Florida trails

For South Florida startups with at least one female founder, the venture capital data was bleaker than the national data. This was not included in the report, but I received a list of South Florida deals through Q3.

According to the data Pitchbook provided, $538.7 million was invested across 47 venture capital deals in the Miami-Fort Lauderdale metro area in the first three quarters of 2022. This would represent 11.5% of the $4.65 billion deal value logged by Pitchbook during that time period, badly trailing the 17.2% logged nationally. What’s more, South Florida trailed the percentages in the Bay Area, New York City, Boston, Los Angeles, Atlanta, Chicago and Washington DC. Those areas, highlighted in the report, ranged from 14% (Chicago) to 24.5% (DC).

The number of deals for South Florida companies with at least one woman co-founder represented just 14.5% of the total deal count in the Miami-Fort Lauderdale metro area in the first three quarters of this year, according to data Pitchbook provided. Compare that to the national number of 25.5% nationally.

Here were the top 10 fundings in the first three quarters of 2022 with at least one co-founder, according to Pitchbook (*we added Boatsetter)

Of all-women founded companies, according to Pitchbook, 10 companies raised $33 million in deal value in the first three quarters of 2022. That’s 0.7%, compared to 2.3% nationally. Among #MiamiTech all-female-founded companies, Passes, founded by Lucy Guo, raised $8 million, leading the pack. She was followed by Influur, co-founded by Fefi Oliveira, Alessandra Angelini, Paula Coleman and Valeria Angelini,  raising $6.3 million, and Mueshi, headed by Ariana Waller, raising $3.3 million, according to Pitchbook’s data.

Although not included in the provided data, in the first month of Q4, at least $49 million flowed to female-founded companies in South Florida, led by the $40 million Series C raise by Brave Health.

Females underrepresented at VC firms

Nationally, the report also found that female decision-makers in venture capital represent 16.1 percent of the national total in 2022. It also found that 95.5 percent of US VC firms have a majority male population of decision-makers. Studies and anecdotes suggest that female founders tend to seek out female investors and the chances of successfully securing financing can rise with a female investor in the room, the report said.

“Female founders are consistently showing up as high-performing startups, but they remain at a disadvantage when forced to pitch to predominately male checkwriters,” said Annemarie Donegan, an analyst at Pitchbook. “Check writers are a driving force for diversity in the VC ecosystem and the lack of female representation in firms has a ripple effect on the founders they invest in as well as the LPs that trust them to generate returns. Promoting and recruiting female check writers can open doors for more female founders and diversify portfolios.”

You can download the 26-page Pitchbook report, chock full of national data, here.

READ MORE VENTURE NEWS ON REFRESH MIAMI:

RELATED: For more South Florida VC data and trends, check out my 20-page VC report on the first half of 2022 in the latest eMerge Magazine. Download it here. [You can also download reports on past years from this link.]

Follow Nancy Dahlberg on Twitter @ndahlberg and email her at [email protected]

Nancy Dahlberg
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