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FEMALE FOUNDERS

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Weekend Analysis

Female founders just took in their smallest share of VC deals in five years

The proportion of VC dollars going to female founders has shrunk to its lowest rate in five years.

Fei-Fei Li, the ex-director of Stanford’s AI lab often called the “godmother of AI,” had VCs clamoring to invest in her startup last year.

In just four months, Li built her startup World Labs into a unicorn backed by NEA and Andreessen Horowitz.

Around the same time, OpenAI‘s CTO Mira Murati quit. Murati’s departure from OpenAI set her up as one of the most sought-after new founders of the AI age. (Her new venture has yet to be announced.)

But Murati and Li are the exceptions, rather than the rules, of a picture rapidly coming into focus. As AI eats more and more VC funding, the share of deals going to female-founded startups is noticeably shrinking.

The uptick in representation of female founders in the last few years was all but erased in 2024: Companies with at least one female founder made up 22.7% of total VC deals, down 1.9 percentage points year-over-year and the lowest rate since 2017, according to the Q4 2024 PitchBook-NVCA Venture Monitor. Their total proportion of deal value also shrank— though less dramatically than the overall deal count.

In aggregate terms, deal value for female-founded companies still clocked in at $45.3 billion, up nearly $5 billion from last year.

But a staggering $9.2 billion of that was for just one company: Anthropic, whose president, Daniela Amodei, is one of seven co-founders. Exclude Anthropic, and you’re looking at $36.1 billion going toward teams with a female founder, out of a total $209 billion.

But what is really causing concern in the industry is early-stage startup financing: typically, that’s where there’s a smaller disparity between female and male founding teams, and where a greater number of female investors are writing checks.

In 2024, out of the 3,121 startup first financings, 20.5% had at least one female co-founder. Four years ago, it was 26.5%.

“It’s very disappointing,” said Aileen Lee, partner at Cowboy Ventures and co-founder of All Raise. I hope it’s just an anomaly and that the companies of 2025 and beyond will have more diversity on the founding teams. I believe that will generate better returns for everybody.”

Missing the moonshots

VCs’ task is to identify and invest in moonshots, and a huge part of that is market sizing. But if investors all come from similar backgrounds, they will have market blind spots.

It took Jo Lawson, CEO of LUUM, a hardware startup developing robotic lash extensions, 13 months to close a $30 million Series A last year. “We just had to continue to prove and prove and prove that this was actually a real category, because there were no women decision-makers in the room.”

“If we had a dollar for people saying, ‘lashes aren’t a thing,’ and we’re sitting there thinking, I guarantee you that a woman in your life is spending thousands of dollars a year getting her lashes done,” Lawson said.

As AI continues to eat up more and more funding, female investors aren’t just worried about the markets being missed, but about bias being introduced into the fabric of AI systems themselves.

A vicious cycle

The data doesn’t lie: first-time fundraising for new VC funds is at its lowest rate in a decade, according to PitchBook data. And emerging managers are typically a more diverse group than established managers.

“Funds funding diverse founders from my cohort of peers are scaling back size or struggling,” according to Diana Murakhovskaya, GP at The Artemis Fund, which invests in seed rounds for companies with female co-founders.

All Raise, a nonprofit founded to broaden opportunities for female entrepreneurs, has shifted its focus toward putting more women and minorities in check-writing positions to try to correct the gap in funding for female founders.

“We’re creating a community where people can do everything from share deals to learn about what’s really happening inside of your firm— to navigate firm politics,” said Paige Hendrix Buckner, CEO of All Raise. The idea behind All Raise’s shift is that if more women are writing checks, more female founders will be given a shot.

Funds that specifically invest in diverse businesses are still a minute portion of all emerging funds.

And diverse funds took another hit last year when a US appeals court blocked the Fearless Fund, a VC fund dedicated to investing in startups founded by women of color, from issuing grants only to Black-women-owned businesses.

The organizations specifically dedicated to helping female founders are becoming fewer and farther between.

Girls in Tech, a mentoring and training nonprofit, shut down in June of last year.

Featured image by Chloe Ladwig/PitchBook News

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  • rosie-headshot.jpg
    Rosie Bradbury is a senior reporter covering startups and venture capital for PitchBook News. Based in New York, she previously reported for the Bureau of Investigative Journalism, Business Insider and Wired. Rosie studied history and politics at the University of Cambridge.
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