Venture capital funding for companies founded by women in the United States has been on the rise in recent years, marking a positive trend in the startup ecosystem. According to research conducted by Venture Capital Journal, the share of total fundraising attributed to women-led funds increased to approximately 3% of the $107 billion raised by venture funds worldwide last year.
Trish Costello, the founder and CEO of Portfolia, emphasized the significant access to wealth that women have attained in the U.S., reaching historic levels. With approximately $25 trillion of wealth in the country, nearly half of all wealth is owned by women. Costello highlighted the power of this wealth, stating, "And that wealth is power if we use it." Portfolia plays a pivotal role in facilitating investment in women-led startups through the creation and management of around 16 venture funds. These funds are tailored for individual investors interested in supporting a portfolio primarily composed of women-led startups while gaining insights into venture investing. The firm has made investments in over 140 companies, the majority of which have women founders.
While approximately 75% of Portfolia's portfolio comprises companies with women CEOs, Costello noted that about 25% are led by men, focusing on addressing challenges faced by women. Notably, one such company is YourChoice Therapeutics, led by men and dedicated to developing a birth control pill for men, illustrating the diversity of solutions pursued by the firm.
It's essential to note that investors in startups typically need to be accredited, as defined by the U.S. Securities and Exchange Commission (SEC). Accredited investors are individuals with incomes exceeding $200,000 or a net worth of over $1 million, excluding their primary residence.
The increasing prominence of women-led venture capital funds reflects a growing recognition of the untapped potential of women entrepreneurs and their ventures. By providing avenues for investment in women-owned startups, these funds contribute to fostering diversity, innovation, and economic growth in the startup ecosystem.
The surge in funding for women-owned startups driven by women-led venture capital funds signifies a positive shift towards greater gender diversity and inclusivity in the entrepreneurial landscape. As more investors recognize the value of supporting women-led ventures, the potential for innovation and success in the startup ecosystem continues to expand.