In the first quarter of 2023, the venture capital funding landscape for women remains disappointingly low, with just 2.1% of total disbursements. This is even lower than the previous quarter’s 4% and the 3.2% in the same period of 2023.
The need for more funding for women-owned businesses has been a long-standing issue and significant progress has yet to achieved. In its report, Crunchbase estimates that out of the total venture capital raised in Q1 2023, a meagre 2.1% of it was allocated to women-led businesses.
Despite some high-profile successes, such as the Me Too Movement and the tech industry’s #Angels initiative, the number of deals for women-led companies remains low. Competing for venture capital funding is often a highly competitive process and the traditional capital funding model has failed to open up the market to more women-owned companies.
The statistics are worrying, but there are initiatives that can help increase the number of women-owned businesses accessing venture capital. For example, the FemTech Global Fund – a collaboration between twelve financial institutions and led by AllBright, aims to deliver a total of $4 billion globally for enterprises owned by women by 2025.
What’s more, new initiatives such as the Entrepreneurship + Equity Collective (E2C) have emerged to facilitate private investors investing in women-led companies. This includes providing a platform for private investments and working with non-profit organizations to find equity financing solutions for women-owned businesses.
The figures released by Crunchbase demonstrate that while venture capital investment has hit all-time highs, female-led enterprise is being left behind. To ensure that all underrepresented entrepreneurs can access the capital they need to grow their businesses and create jobs, more initiatives such as E2C must be supported. Crucially, there must also be changes to the current set-up of the VC industry, to make it more accessible to women-owned businesses. Only by taking these collective actions can the future of fundings for women-led businesses become brighter in Q2 and beyond.
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