Recently, I moderated a panel of women tech leaders in which all of the participants agreed ahead of time that we wanted our conversation to stay positive. Coming on the heels of this spring's Ellen Pao v. Kleiner Perkins trial that exposed some of the more sordid side of life among mostly-male venture capitalists - and in light of what sometimes feels like a nonstop barrage of news about the challenges that female tech entrepreneurs face - we all felt that the gains and strategies that have helped us to become successful needed to get their fair share of airtime.
In that vein, I'm happy to have come across some good news: a Crunchbase study recently indicated that companies led by women founders are trending upward, noting that 17.91% of companies seeking funding in 2014 were women-led, up from 9.52% in 2009. Before Crunchbase's numbers came out, the last significant study of women leaders may have been The Dow Jones Women at the Wheel Report in 2012, which covered 1997-2011 and shows that 1.3% of privately-held start-ups had a female founder out of 20,194 venture-backed companies. If that's our point of comparison, these gains in six years are significant, and I believe they will increase dramatically in the coming years as well.
When I co-founded Octane Software with three men, I was aware that there weren't many of us women founders of tech companies. VMWare (Diane Green) and Flickr (Caterina Fake) jump out as two that have been around a while and proven successful. These days, increasing numbers of exceptional women and their companies stand out, like Anne Wojcicki of 23andMe and Elizabeth Holmes of Theranos. Anne and Elizabeth are tackling the intersection of technology and medicine in a way that betters all of our lives. My gut-feel is that more women will be leading at intersections of technology and other industries in which they have deep expertise.
Of course, there are many more fantastic examples of women-founded tech companies, such as Eventbrite, co-founded by Julia Hartz, and shopping sites One King's Lane (Alison Pincus), Net-a-Porter (Natalie Messenet), and Gilt (co-founders Alexis Maybank and Alexandra Wilkis Wilson). I could fill screens with more names and successes.
Interestingly, the Crunchbase study also showed where these founders are most likely to be located, and I found the results surprising: the place with the highest percentage of female-founded companies is Las Vegas, at 26% (15 companies) from 2009-2014; New York is second at 21% with 374 companies, and San Francisco lags behind at 16% and 338 companies. How New York could beat Silicon Valley with regard to the number of female-led companies, I have no idea. It could have something to do with the correlation of New York to media and shopping, two areas where female founders are plentiful. Ultimately, I do expect the Valley to surpass anywhere else with the number of female founders for the same reason that most male-founded tech companies start here: this is where the VCs are, and where the money is alongside a strong start-up culture.
Speaking of money, it remains my hope that more of that money finds its way into female founders' hands. There's a lot to remain concerned about in that specific arena, though. 96% of VCs are male, which means that only 4% of the VCs making funding decisions are women. The poor results this imbalance is netting for women's businesses have been widely reported. It's no surprise that women are, then, also seeking different solutions.
One potential answer: crowdfunding is an arena in which women are finding and funding non-traditional funding paths - and, coincidentally, a major crowdfunding site (Indiegogo) was founded by Danae Ringlemann specifically with the goal of democratizing finance. One article calls out how crowdfunding sites like these are helping female technologists to break the glass ceiling. So, not only are women-founded businesses growing: they're growing despite a whole lot of things, like VC-funding, that are seemingly stacked against us.
Ultimately, the question remains: how do we reach the point where we see an equal number of female-founded businesses funded and thriving, especially here in Silicon Valley? Events like that which Y Combinator threw earlier this year, gathering 800 women for the purpose of jump-starting gender equality in tech, are a great start. Gatherings like this which bring women together are important to inspire confidence and the sense that we are not as alone as the numbers may suggest. And no matter how we look at the landscape, women helping women is going to be key to the advancement of women-founded businesses as well.
I'd love to hear from you. Do you, too, view the future of women-founded companies as bright; and what do you think needs to happen for it to be yet more promising?