Why is it still so hard for women to get funding for startups?

If you are an angel investor or venture capitalist, and unless you have been living in a cave in the mountains of Afghanistan without the internet, you are aware of the mismatch of desire and results in the realm of finding and funding female founders. Maybe I will start the “Four F” club.

Everyone talks a good game and is all in for diversity and equity, everyone wants that imprimatur on its lapel, and there is a proliferation of platforms and programs to increase funding to female founders. Yet, here is the sad reality, according to Pitchbook “only 17 percent of venture capital went to companies with at least one female founder and only 2 percent to all female-founded companies.”

Multiple women-run investment funds are in San Diego, and more than half of the board of the Tech Coast Angels are women, so I do not have much new light to shine here, other than to share one thought that came from one very smart, female investor, we will call “Maria.”

“If the woman looks like a man, she can get funded in Silicon Valley, but if she looks and thinks like a woman, then the odds are dramatically different and less favorable,” she says.

What she is talking about is not clothing or haircut, it is her persona, it is her brand, it is her mentors and professors, it is her team, it is her pedigree. Being a woman founder regardless of gender or color or pronoun, if you are armed with the above imprimaturs and resources, then Sand Hill Road is wide open, and you will get term sheets. On the other hand, if you don’t fit “the model,” then the road can be much more rugged. Look, I need to say it clearly: Yes, there is always bias.

I had lunch with a very smart, connected and famous VC recently, and I asked about his thinking funding women founders. He said that venture investing is hard enough without consciously seeking out women founders where statistically the odds are even more adverse. But he says the fund tries to be gender blind and great founders get funded regardless. So, how do women founders find the “team and the pedigree” to elevate and support them, making them fundable without hesitation.

“Maria” explains to me that women think differently and solve problems differently, but the vast majority of investors are men, and thus we have the famous “Men are from Mars, and Women are from Venus” puzzle. During a recent pitch program for female founders, I asked a couple of direct questions (I was not walking on eggshells) and one of the women called me out in the chat as having “negative male energy.” Clearly, this area remains a nuanced work in progress.

I am already in so deep trying to navigate this discussion of investment and women founders, I guess I will just keep digging. As one example of the puzzle, consider Elizabeth Holmes and Theranos. She had the imprimatur, the pedigree, and it also did not hurt that she was drop-dead gorgeous. Interesting and maybe only coincidental, but all her early backers were powerful, famous men. I’m just saying.

But for sure, the shots on goal will increase for women. In 2021, venture capital raised $ 238.7 billion, continuing its unprecedented upward trajectory. In the end, it is a numbers game, and women founders will get their share, perhaps not a “fair share,” but the situation will definitely improve.

Finally, it seems that a lot of people are taking their job and shoving it. “Nearly 4.3 million Americans quit their jobs in August,” says Wharton professor Jacqueline “Jax” Kirtley. And my question is — to do what?

The answer seems to be to “start my own company.” There is an explosion of entrepreneurship coupled with new business filings. But Kirtley politely points out “not every founder is going to be the next Jeff Bezos or Elon Musk.” She says that entrepreneurship is “aspirational,” and that creates the perfect storm for the myth of the hero against all odds, fueled by billions of investor dollars, looking to find the next unicorn. Unfortunately, the statistics suggest that failure is the most likely default option.

Maybe if they pick a few more women, the success rate will increase. I’m just saying.

Rule No. 689: “Pay no attention to that man behind the curtain.” — The Wizard of Oz.

Neil Senturia is a serial entrepreneur who invests in early stage technology companies. You can hear his weekly podcast on innovation and entrepreneurship at www.imthereforyoubaby.com. Please email ideas to Neil at [email protected].