Startups

Work-Bench report finds just 1.9% of venture investment going to female enterprise founders

Comment

Image Credits: Klaus Vedfelt / Getty Images

A new report from early-stage venture capital firm Work-Bench confirmed what you probably already know: Startups with women founders are getting a mere sliver of the overall funding pie. What’s more, the percentages are far worse in the enterprise, where Work-Bench tends to invest.

The numbers, which were based on Work-Bench research along with data from PitchBook and Crunchbase, showed over 25% of startups receiving funding included at least one female founder, but when you looked at just enterprise software companies, the number plunged to a dismal 1.9%.

The fact is that research has proven these numbers make little sense. As the report authors wrote, “research has shown that female-led teams generate 35% higher return on investment than all-male-led teams.”

Yet the gap persists.

Jessica Lin, co-founder and general partner at Work-Bench, said that one of the motivations for starting her firm was the persistent lack of female representation at the corporate level, among startup founders and particularly at VC firms that control the purse strings.

The first step was to build a database of female founders, which she said the firm has been working on for the past four years and updates on a regular basis. They made this database publicly available. “I’ve always said behavior change also requires data,” Lin told me.

The impetus behind the report was to put that data to work, showing investors just how pronounced the problem is and tracking progress (or lack thereof) over time. And she especially wanted to focus on the enterprise, where her firm operates, because she said there was a distinct lack of data in that area.

“So this is the first time we’ve said, ‘Hey, why don’t we actually put it together [into a report]?’ So I would love to tell you that maybe in a year from now we can see that sub-2% number has gotten to 3%. But we just had to have a baseline somewhere,” she said.

While the number is small, there are some areas where women are more likely to be involved in funded startups. The biggest area by far was HR/future of work with 35.1%, followed by data/AI/machine learning with 19.8%, and sales and marketing with 12.2%.

Work-Bench female founders report. Pie chart breaks down their participation by sector.
Image Credits: Work-Bench

Women face a number of challenges. For starters, there is still a lack of women in leadership roles at major tech companies. If more women held jobs with higher salaries, they could not only act as mentors, but participate in angel rounds that could help drive more women-led startups.

Idit Levine runs the startup Solo.io, a cloud-native software company that recently landed a $135 million Series C investment on a $1 billion valuation. As Levine told me at the time of her funding, she’s frustrated by tokenism in the tech industry:

“I never asked for anybody to give me this discount because I’m a woman. Actually, sometimes it has been irritating. Oh, we want to give you a talk because you’re a woman. It pissed me off. You need me to give a talk because I am damn good.”

Yet many women lack her confidence. The New Stack reported on a recent panel at KubeCon, where a group of women talked about the obstacles they face as an underrepresented group in cloud-native technologies. Many of the panelists expressed a common feeling among underrepresented groups of imposter syndrome — feeling like they don’t belong even though they clearly have the skills and abilities.

In a June TechCrunch article on the experience of four women engineers in tech, Yury Roa, SRE technical program manager at ADL Digital Labs in Bogota, Colombia, told me that imposter syndrome can be a real impediment for women in tech:

“One barrier for us related to being the only woman in the room is that [it can lead to] impostor syndrome because it is common when you are the only woman or one of few, it can be really challenging for us. So we need to gain confidence, and in these cases, it is very important to have role models and leadership that includes women,” Roa said.

Work-Bench is a small firm trying to make a big impact by providing data to illustrate inequities in the system. As Lin noted, data can drive change, but it’s going to take a full-blown systemic shift to move these numbers. That’s going to require more women being promoted as executives and investing as angels and venture capitalists.

Only then can we truly move the needle. Because 1.9% is not good enough. Not by a long shot.

4 women in engineering discuss harassment, isolation and perseverence

More TechCrunch

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

13 hours ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

15 hours ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info

The prospects for troubled banking-as-a-service startup Synapse have gone from bad to worse this week after a United States Trustee filed an emergency motion on Wednesday.  The trustee is asking…

A US Trustee wants troubled fintech Synapse to be liquidated via Chapter 7 bankruptcy, cites ‘gross mismanagement’

U.K.-based Seraphim Space is spinning up its 13th accelerator program, with nine participating companies working on a range of tech from propulsion to in-space manufacturing and space situational awareness. The…

Seraphim’s latest space accelerator welcomes nine companies

OpenAI has reached a deal with Reddit to use the social news site’s data for training AI models. In a blog post on OpenAI’s press relations site, the company said…

OpenAI inks deal to train AI on Reddit data

X users will now be able to discover posts from new Communities that are trending directly from an Explore tab within the section.

X pushes more users to Communities

For Mark Zuckerberg’s 40th birthday, his wife got him a photoshoot. Zuckerberg gives the camera a sly smile as he sits amid a carefully crafted re-creation of his childhood bedroom.…

Mark Zuckerberg’s makeover: Midlife crisis or carefully crafted rebrand?

Strava announced a slew of features, including AI to weed out leaderboard cheats, a new ‘family’ subscription plan, dark mode and more.

Strava taps AI to weed out leaderboard cheats, unveils ‘family’ plan, dark mode and more

We all fall down sometimes. Astronauts are no exception. You need to be in peak physical condition for space travel, but bulky space suits and lower gravity levels can be…

Astronauts fall over. Robotic limbs can help them back up.

Microsoft will launch its custom Cobalt 100 chips to customers as a public preview at its Build conference next week, TechCrunch has learned. In an analyst briefing ahead of Build,…

Microsoft’s custom Cobalt chips will come to Azure next week

What a wild week for transportation news! It was a smorgasbord of news that seemed to touch every sector and theme in transportation.

Tesla keeps cutting jobs and the feds probe Waymo

Sony Music Group has sent letters to more than 700 tech companies and music streaming services to warn them not to use its music to train AI without explicit permission.…

Sony Music warns tech companies over ‘unauthorized’ use of its content to train AI

Winston Chi, Butter’s founder and CEO, told TechCrunch that “most parties, including our investors and us, are making money” from the exit.

GrubMarket buys Butter to give its food distribution tech an AI boost

The investor lawsuit is related to Bolt securing a $30 million personal loan to Ryan Breslow, which was later defaulted on.

Bolt founder Ryan Breslow wants to settle an investor lawsuit by returning $37 million worth of shares

Meta, the parent company of Facebook, launched an enterprise version of the prominent social network in 2015. It always seemed like a stretch for a company built on a consumer…

With the end of Workplace, it’s fair to wonder if Meta was ever serious about the enterprise

X, formerly Twitter, turned TweetDeck into X Pro and pushed it behind a paywall. But there is a new column-based social media tool in town, and it’s from Instagram Threads.…

Meta Threads is testing pinned columns on the web, similar to the old TweetDeck

As part of 2024’s Accessibility Awareness Day, Google is showing off some updates to Android that should be useful to folks with mobility or vision impairments. Project Gameface allows gamers…

Google expands hands-free and eyes-free interfaces on Android