Despite a higher rise in fundraising because of megafunds and the emergence of Zoom investing. the coronavirus epidemic disproportionately affected venture capital investment for female entrepreneurs last year. As a result, the terrain became unequal, with money flowing more toward men than was traditionally customary. However, according to recent PitchBook statistics, the gender gap in startup financing is narrowing marginally.
Through the first three quarters of 2021, female-founded firms raised $40.4 billion in 2,661 agreements, nearly twice the $23.7 billion raised in 2019 and more than ten times the $3.6 billion rose in 2011.
There is still a lot of work to be done because we are still far from being equitable, fair, or seeing enough progress to cease tracking this data collection. Women-founded businesses continue to raise less money and have lower investor values. While the increasing tide of venture capital has not lifted all boats, we will use this data to search for early signs of a return for the traditionally underserved demographic, from investment to exit to decision-makers.
Global venture capital totals are soaring, rebounding rapidly following a brief period of COVID-induced caution that made it difficult for some businesses to get finance at the outset of the epidemic. Female entrepreneurs are smashing records in this climate, according to PitchBook, which evaluated investment activity in U.S.-based firms with at least one female founder.
You were not being excessively gloomy if you did not expect to see many female-founded firms this year: Despite growing venture capital totals in general, women-founded firms in the United States saw their deal count declined by 2% and total dollars invested in their businesses dip by 3% in 2020.
Female-founded firms raised fewer dollars from fewer rounds as the venture capital pie became wider, a significant decrease from prior years. According to PitchBook, female founders closed 150 to 200 transactions every quarter in 2019, valuing $700 million to $950 million. The cohort only landed 136 rounds for $434 million in Q3 2020. That was in a posh neighborhood.
The good news is that, so far in 2021, the backsliding has slowed to a halt. It, in fact, going in the opposite way, The headline figure of $40.04 billion for female-founded firms based in the United States understates the rapidity with which female entrepreneurs have raised cash. Look at the graph below from the PitchBook-NVCA report: Despite a slight drop in deal volume from previous all-time highs, the data clearly shows that female-founded firms just had their greatest quarter on record in terms of the overall transaction value. This chart is more than optimistic, and the data points for 2020 are abysmal.