Why There's Never Been a Better Time to Encourage Female Founders
While female founders remain the minority, the numbers show that more and more investors are paying attention.
February 22, 2022
The gist: Even while “VC allocations to women-led companies continue to be in the single digits percentage-wise,” the “business world is seeing more female founders than ever before,” and “Women-owned businesses have continually demonstrated their potential for success.”
The Stats:
There are over 11.6 million firms in the United States that are owned by women, generating roughly $1.7 trillion in yearly sales. (National Association of Women Business Owners)
Of all companies in the United States with revenue exceeding $1 million, one in five are owned by a woman. (National Association of Women Business Owners)
Companies with the most gender-diverse executive teams are 25% more likely to achieve above-average profits than their less gender-diverse peers. (McKinsey & Company)
And additionally, “these odds for above-average success have increased each time this analysis has been performed.”
What’s the secret sauce?
Female founders “often serve overlooked market niches.”
“Women are also often able to draw from their own unique experiences and insights to generate new business ideas.” From “introducing original services to providing a noteworthy improvement to existing products,” they find (and fill) gaps in otherwise crowded niches.”
These innovations usually then “form an immediate connection with customers who feel underserved by what is currently offered by major brands.”
One more Stat:
Data from 2020 and 2021 reveals that startups with female founders are exiting one year faster than the market average while seeing the value of these exits skyrocket 144 percent -- over 40 percentage points higher than the rest of the market.
This proves they know how to run their companies to VC’s advantage as well.
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