However anyone working in the startup world knows intuitively that women are still not well represented in technical or founder roles — and that quantifying the issue is difficult because data is so scarce.
In 2013, Pinterest technologist Tracy Chou famously highlighted the issue in her post, “Where are the numbers?, which exposed the lack of published data from #startups and mainstream tech companies on the number of women in technical roles.
Subsequently startups like Etsy and Dropbox, and giants like Google, Facebook, and Microsoft, began reporting those numbers. They were low, but at least some technology companies had a baseline from which to measure progress.
When it comes to #startup founders, however, the picture is still limited. Earlier this year, veteran tech executive Sukhinder Singh Cassidy began a project called Choose Possibility to collect data on women founders –getting their perspectives on the challenges and opportunities facing women in the startup arena. The results of the ChoosePossibility survey reveal much about the challenges women entrepreneurs face.
In 2009, 9.5% startups had at least one woman founder, but by 2014 that rate had almost doubled to 18%
A comprehensive study of women startup founders, however, was still missing. In recent years, we know of two studies that tackled the issue, but their data sets were limited or dated (1). At CrunchBase, where Gene heads up the content team, we are embarrassed to say that we only began asking for data on founders’ gender in March. It’s a step in the right direction, but it left us with years of missing data about founders’ genders.
Given CrunchBase’s role as the open data platform for the startup community, we recognized that this data problem was ours to solve. So this spring we asked our research team to look at the period of 2009-2014 and find every U.S.-based startup that had an initial funding during that period and do two things: identify the founders for each startup as well as their genders.
Where a name could belong to a male or a female, we did some additional work to resolve the ambiguity. The results are not perfect, but we believe the error rate is not statistically significant. (We know people are not a statistic, so please let us know about any mistakes.)
As a result, we now have a data set for the past five years to analyze the participation rate of women as founders of U.S.-based, funded startups!
Funded Startups With A Female Founder: 2009-2014
And here is the top line: In the period from 2009 to 2014, CrunchBase records 14,341 U.S.-based startups that received funding. Of those, 15.5%, or 2,226, have at least one female founder.
Next, we asked how picture changed, if at all, from 2009 to 2014, and we uncovered an interesting shift. In 2009, 9.5% startups had at least one woman founder, but by 2014 that rate had almost doubled to 18%. At the same time, the absolute number of companies (along with the total number of startups) with a female founder more than quadrupled from 117 in 2009 to 555 in 2014. Based on those numbers, it seems reasonable to conclude that there has been a steady increase in the number of women founders in the past five years.
Billion-dollar startups led by women are even more rare.
The solution? Same as always: Bootstrap, create a great product, be confident, and hire well.
Fortune‘s latest cover story, “The Age of Unicorns,” details the rise in the number of tech companies that are valued at $1 billion or more. The once-rare designation—hence the mythical name—is now shared by more than 80 startups.
The Unicorn Club remains exclusive. The Decacorn Club, with valuations of $10 billion or more, even more so. But the most exclusive one of all?
Unicorns led by women.
Just four companies on Fortune‘s Unicorn List have female CEOs—about five percent of the total. A handful more have female co-founders on their leadership teams. Many entrepreneurs and venture capitalists have acknowledged a rise in the number of female-founded startups.
So why aren’t more unicorns led by women?
Aileen Lee, the venture capitalist who made the term famous, has some thoughts. She says that the shift in the number of women-led unicorns hasn’t been “as dramatic as it should be or we want it to be.”
Women famously struggle to raise capital. Eighty-five percent of companies that were funded between 2011 and 2013 have no women on their executive teams, according to Babson College researchers. The firm Lee launched in 2012, Cowboy Ventures, is “open for business for supporting a more diverse group of founders.” She believes female founders (and teams with more diversity) will drive “awesome” returns.
Until Lee’s viewpoint spreads down Sand Hill Road, aspiring female founders have a handful of role models to emulate. Founder-CEOs such as Elizabeth Holmes of blood diagnostics upstart Theranos, Lynn Jurich of solar energy provider SunRun, and Adi Tatarko of home renovation and design platform Houzz have proven that it’s very possible for women to build companies that cross the billion-dollar hurdle.