We’re going through this pandemic as one: people of all nationalities, ages, and social backgrounds have been hit. The overload of negative news and the economic consequences led to collective trauma. Many entrepreneurs switched to survival mode and put their wellbeing at stake just to keep their businesses afloat. And while everyone’s lives have been influenced, the burden that women carry seems to be heavier. What should we learn from how this pandemic treated women in business, and why do we need to help female founders urgently?
The VC money was generous, but not for female founders
Crunchbase crunched the numbers, and perhaps surprisingly, US startups raised even more money in 2020 than the year before. But that didn’t affect companies founded by women: on the contrary, during the pandemic year, female founders raised 22 percent less than in 2019.
For example, let’s look at late-stage funding to sole female-founded startups. It went from 2.5 percent in 2019 to a miserable 1.2 percent in 2020. But if a company had both a male and female founder, the odds of VCs investing were significantly higher. A coincidence?
The wellbeing troubles
When schools started closing down, it was primarily women who took on the responsibility for the household. They were more likely to get fired, as they were expected to dedicate their time to unpaid housework and homeschooling children. In the US, women were leaving the workforce four times (!) the rate as men. The reason: multiple responsibilities.
The analysis from the Office for National Statistics shows also shows that women felt more lonely, anxious, and depressed. At the same time, men were more likely to say they weren’t at all worried about the effect of the pandemic on their lives. Of course, men did have their fair share of pandemic blues, but the statistics show just how deeply the systemic, often unconscious double standards penetrated our society.
Letting female founders spread their wings after the pandemic
Despite all the setbacks, sleepless nights, loans, unpaid work, uncertainty, and financial instability, female-founded companies delivered more than twice the return per dollar invested as their male-owned counterparts. As analyzed by the Female Founders Fund, that’s not the only area where women performed better. They exited their companies faster, and they even managed to exit on far less capital raised. On top of that, exits by female-founded companies increased 16% year over year. On the contrary, male-founded exits declined by 2%.
Investing in diversity clearly isn’t some sort of charity: it makes financial sense. And if female-led startups are a better investment: what’s the excuse?