Biggest Drop in Venture Funding in a Decade for Female Founders in LA

Francesca Billington

Francesca Billington is a freelance reporter. Prior to that, she was a general assignment reporter for dot.LA and has also reported for KCRW, the Santa Monica Daily Press and local publications in New Jersey. She graduated from Princeton in 2019 with a degree in anthropology.

Biggest Drop in Venture Funding in a Decade for Female Founders in LA

The pandemic has paused a substantial amount of venture activity for women entrepreneurs in Los Angeles. This year is on track to record the sharpest drop in investment in female-led startups in nearly a decade.

Female-founded companies in L.A. closed 2019 with 234 deals worth $1.4 billion. As of September 30, there have been 141 deals and $900 million invested, according to a report from Pitchbook released this week.


VC deal activity in female founded companies 2006-2020 VC deal activity for female-founded companies from 2006 through 2020.

The figures, though not complete for the year, show the pandemic is disproportionately hurting female entrepreneurs, eroding strides made in recent years. Across the economy, the pandemic has hit women harder.

In November there were 2.5 million fewer women in the workforce compared to the same time last year, according to U.S. Bureau of Labor Statistics. And economists worry the inequity caused by the pandemic could have long-term impacts.

This setback comes after years of progress for women-owned startups. Last year, investments in female-founded companies hit over $20 billion — 10 times the amount of a decade ago.

Female-founded companies as a proportion of all VC deal activity from. 2006 through 2020

The report did not take into account race, but Los Angeles is notable as a popular city for Latina and Black women founders to begin startups along with New York and San Francisco, according to a survey by digitalundivided, a nonprofit that tracks female entrepreneurs of color across the country. These entrepreneurs tend to have a harder time accessing capital.

Beatriz Acevedo, the co-founder of a new fintech company for Latino youth, was one entrepreneur on the hunt for funding mid-pandemic. She was able to double the pre-seed amount she sought, but she attributed that to her investors. 90% of them are Latina and all are women.

"Even in the middle of a pandemic, of an economic downturn, they saw the need," she said. "I didn't have to oversell myself."

Acevedo, the founder of millennial media company mitú, which was sold to Latido Networks earlier this year, said she had a much harder time when she sought to raise money from traditional investors, most of whom were white men.

"I'm kind of like an outlier," she said. "I'm incredibly grateful and I understand I'm in a position of privilege because not only am I a woman, but I'm a woman and I'm an immigrant. I'm over 50. I've never been in FinTech."

Funding for female founders across the country dropped 31% from the first three quarters of 2019. That's compared to a 16% drop to all-male founders.

Yet, female-founded companies exited faster than the overall market. Pitchboook found that 2020 was on track to mark the 10th straight year of that trend.

https://twitter.com/frosebillington
francesca@dot.la

Subscribe to our newsletter to catch every headline.

Cadence

ADHD and Dyslexia Often Aren't Caught Until It's Too Late. Santa Monica-Based Polygon Wants to Change That.

Keerthi Vedantam

Keerthi Vedantam is a bioscience reporter at dot.LA. She cut her teeth covering everything from cloud computing to 5G in San Francisco and Seattle. Before she covered tech, Keerthi reported on tribal lands and congressional policy in Washington, D.C. Connect with her on Twitter, Clubhouse (@keerthivedantam) or Signal at 408-470-0776.

ADHD and Dyslexia Often Aren't Caught Until It's Too Late. Santa Monica-Based Polygon Wants to Change That.
Courtesy of Polygon

Here’s how Jack Rolo describes his childhood: He was good at chess, and bad at spelling. He was good at math, and bad at reading. Rolo went on to study physics at Durham University in his native England—and despite often struggling in his courses, it wasn’t until after he graduated that he was diagnosed with dyslexia, a common language processing disorder that affects reading.

Read more Show less

ZipRecruiter CEO Ian Siegel on How the Job Market Has Shifted

Spencer Rascoff

Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. During Spencer's time as CEO, Zillow won dozens of "best places to work" awards as it grew to over 4,500 employees, $3 billion in revenue, and $10 billion in market capitalization. Prior to Zillow, Spencer co-founded and was VP Corporate Development of Hotwire, which was sold to Expedia for $685 million in 2003. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 100 companies and is incubating several more.

Ian Siegel, ZipRecruiter
Image courtesy of ZipRecruiter

On this episode of Office Hours, host Spencer Rascoff talked with ZipRecruiter CEO and founder Ian Siegel about how he built his company, the lessons he's learned along the way and how he's seen the pandemic drastically reshape the job market—probably for good.

Read more Show less

Riot Games Doubles Down on Mobile With ‘Aim Lab’ Investment

Samson Amore

Samson Amore is a reporter for dot.LA. He previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Samson is also a proud member of the Transgender Journalists Association. Send tips or pitches to samsonamore@dot.la and find him on Twitter at @Samsonamore. Pronouns: he/him

Riot Games Doubles Down on Mobile With ‘Aim Lab’ Investment
Image from Aim Lab

Riot Games has invested in virtual shooting range developer Statespace, accelerating the Los Angeles video game publisher’s efforts to dominate the mobile gaming space.

Read more Show less
RELATEDEDITOR'S PICKS
LA TECH JOBS
interchangeLA
Trending