In 2020, investments in women-founded startups saw a sharp drop, about 27%, according to Crunchbase. We could blow this off as a COVID19 side effect, but why should we? Year after year, female-led startups continue to struggle to gain the attention of VCs. By contrast, male-led startups, even during the pandemic, saw sizable gains. In 2019, only 3% of VC funding went to women-led startups. For Black and Latina women, the environment is even worse, garnering just 0.6% and 0.4%, respectively. This needs to change. Women-led startups shouldn’t have to the sacrificial lamb during tough economic times. Why? Because womxn have market power and great ideas, that’s why. Let’s look at those ideas and how they impact the economy.
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Let’s start with the obvious, femtech. While femtech is still in its infancy, the market is gaining ground. Women are solving problems once thought of as too taboo to speak of. Femtech products are smart investments because they solve real problems that have gone unanswered for centuries. Women’s health is a large market. But why is femtech called femtech instead of just tech? It’s because we allow men to define us. |
You can probably guess we’re about to get into the d_cking around segment of this article. A man didn’t invent the term femtech himself; the term instead was coined by Ida Tin, the founder of Clue, to make male investors more comfortable while pitching to them. How apropos; let’s make the males comfortable as we pitch while wearing a bra, 4-inch heels, and lipstick. But I digress. Femtech is an idea that encourages investing in the female health journey, from the cradle to the grave. That’s smart. In fact, the femtech market is expected to reach 60 billion by 2027. Why would any smart VC leave that much cash on the table?
While male VCs keep ghosting us, we keep gaining the power of the dollar. According to a Boston Consulting Group study, female-led startups generate 78% of every dollar invested, compared to 31% from males. The market will not ignore us. Women are launching femtech startups but are also starting other models like home health care and fintech, all areas where there are still plenty of problems to solve. Healthcare is an area ripe for investing. The global healthcare market will reach over 10 trillion by 2022. That’s less than a year away. Women make the majority of healthcare decisions in the home; that’s the market. VCs need to invest in women who build healthcare models. In the fintech sector, women are reshaping the market. It would be wise for male investors to take notice.
When will this poor trajectory change?
We’re going in the wrong direction for VC equity. It’s estimated, as fundings from 2020 are belatedly recorded, that the sector will show a substantial drop in total dollars to female startup founders. While that’s not surprising in the current climate, it will have a long-term impact. Due to the downturn in the economy and women choosing to leave the workforce, female-led startups may not reach VC equity for another 10–20 years. No one, including male investors, should take any comfort in womxn-less innovation. The lack of women-led startups will result in less creativity, less productivity, and less scalability of innovation in femtech and other sectors. There can be no debate.
Let’s change the trajectory
Women have power and leverage. We need to lean into it. Women can network within their communities for support. We also need to stop saying empowered and start living empowered lives. Build the vital self-belief that you need to thrive. Invest in that trait in other women. Show up for each other. If a woman comes to you with a good idea, rally around her. We need to do away with the notion that only a few women can succeed in a sea of men. Women make excellent swimmers. Women must also demand solutions built by women. If one male-led startup receives funding for their tech-for-sex solution that helps women reach orgasm, no woman whose solution does the same thing should go unfunded. Long-term VC firms need to be deliberate about their commitment to gender equity. Commit to funding women-led startups. Let us run not walk to a day when startups are funded because they have a good idea, or left unfunded when they have a bad idea, not because the foundation identifies as womxn.