Venture Capital Funds Led by Women are Contributing to the Rise in Funding for Startups Owned by Women

venture capital fund

Venture capital funding in the United States for companies founded by women has shown an upward trend in recent years. Research conducted by Venture Capital Journal indicates that the share of total fundraising by women-led funds reached approximately 3% of the $107 billion raised last year by venture funds globally. Typically, investors in startups are required to be accredited, a status defined by the U.S. Securities and Exchange Commission as individuals with incomes of at least $200,000 or net worth exceeding $1 million, excluding their primary residence.

Despite facing challenges in fundraising, women-led venture capital funds made notable progress in 2023. According to research from Venture Capital Journal, the share of total fundraising by women-led funds increased to around 3% of the $107 billion raised last year by venture funds worldwide, up from less than 2% in 2022.

Although this percentage remains a fraction of the total pool, venture capital funding for companies founded by women in the U.S. has been steadily increasing in recent years. This upward trend has been supported by the establishment of incubators for women founders, a growing number of companies founded by women, and an increase in venture capital funds dedicated to supporting underrepresented founders.

Trish Costello, founder and CEO of Portfolia, emphasized the significance of the wealth accessible to women in the U.S. today, stating, “The access to wealth that women have in the U.S. today is really at a historic level. We have about $25 trillion of wealth in the U.S., and we’re approaching 50% of all wealth being owned by women in the U.S. And that wealth is power if we use it.”

Portfolia manages approximately 16 venture funds tailored for individual investors seeking to invest in a diverse portfolio primarily consisting of startups led by women while gaining insights into venture investing. The firm’s investments span over 140 companies, with a majority having women founders.

“It’s about investing in companies that enrich our lives and offer us significant returns,” stated Costello.

While around 75% of the firm’s portfolio is comprised of companies led by women CEOs, Costello noted that approximately 25% are led by men, focusing on addressing issues relevant to women. This includes a male-led company, YourChoice Therapeutics, which is developing a male birth control pill.