PitchBook Report on Women in VC Finds Growing Number of Female Checkwriters Could Bolster Female-Founded Startups Disproportionately Impacted by Pandemic

PitchBook the premier data provider for the private and public equity markets, today released All In: Women in the VC Ecosystem, its third annual report examining US venture capital (VC) investment in female-founded startups. The report, published with support from J.P. Morgan and Beyond The Billion, found COVID-19 disproportionately impacted female founders last year. Dealmaking was more sporadic for much of 2020 as companies founded solely by women experienced a 28% decline while all-male-founded companies only saw a 5% decline between March and June of that year. Valuations of early-stage female-founded companies significantly diverged from the overall market for the first time in over a decade and existing gaps at the late stage widened. 

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Despite these headwinds, female-founded companies have already shattered the previous annual deal value record in just the first three quarters of 2021 and continue to outperform the broader market when it comes to exits, both in terms of overall exit value increases and the median time it takes to exit. Perhaps most promisingly, checkwriters have become increasingly more diverse in the post-#MeToo era, with record highs of female GPs and angel investors in the ecosystem today. Given female checkwriters are more likely to invest in female founders, this growth could lead to a long-term ripple effect on the headline numbers for years to come.

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“Since launching our Women in the VC Ecosystem series in 2019, we’ve seen meaningful growth in the number of women in decision-making roles at VC firms, a positive institutional-level trend that should bode well for female founders,” said Nizar Tarhuni, Senior Director of PitchBook’s Institutional Research Group. “However, the measurable COVID-19 setbacks for female-founded companies, despite their consistent performance and resilience, illustrate why we must be diligent about pushing for gender equity within the VC ecosystem. We hope this data-backed look at the state of female-founded startup performance and funding will empower VCs and institutional investors to allocate more funds to these companies and continue placing women in checkwriting roles within their own firms.”

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PitchBook analyzed investment activity in US-based startups with at least one female founder. The report also includes a spotlight on female angel investing and breaks down funding activity within specific US ecosystems and sectors, including tech, pharma & biotech, healthcare, retail and fintech.

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