Why We Invest in Women-Led Startups (Spoiler: It’s Not Because They’re Women)

4 min readFeb 19, 2023

Founders and investors are ringing in the new year with a sobering statistic: In 2022, 82.2% of VC funding capital went to startups without a single woman on the founding team.

Before I unpack this stat, spoiler alert: Joyance Partners, where I’m an investor, is bucking this trend. I’ll share why later in the post.

The Pitchbook report reveals a grim reality: only 1.9% of VC capital went to all-woman founder teams in 2022, which was a drop from last year’s 2.4%. This figure indicates a stalling in progress on the path to gender parity, given that this percentage is the lowest since 2016 (1.7%).

In 2022, VC funding for founding teams with at least one woman among a passel of men jumps up to 15.9%, further emphasizing the direct impact having a man on the founding team has on fundraising success.

So why is this the case? As with understanding discrimination of all kinds, it’s impossible to pinpoint a single issue, but here are a few contributing factors to consider:

Implicit bias in startup pitch evaluation. In 2017, Harvard Business Review conducted a study of founder pitches and followup questions by investors. The results? Male founders were more likely to receive “promotion-oriented” comments, focusing discussion on future aspirations, room to grow, and advancement. Female founders were more likely to be questioned with a “prevention-oriented” point of view, questioning the responsibility of the founder and the safety and viability of her venture.

Misleading histories. Female founders may lack the experience on paper in comparison to their male counterparts due to well-documented disparities in education, hiring, pay raises, and promotions — especially in STEM. This all culminates in fewer opportunities for leadership roles and results in women serving in positions that appear multiple steps behind their male counterparts.

Gender disparity of investors. According to a 2022 fund review by Pitchbook, 16.1% of all VC decision-makers are women, while a whopping 95.5% of funds have majority male investment committees. If you are looking to invest in an investment led by someone exactly like yourself, that is what you are going to find, and nothing else.

At the end of the day, the problem stacks up to be a deep-rooted, culturally ingrained combination of all these factors: career disparities plus implicity bias during pitches topped by nearly 100% of VC funds run by a majority male investment committee.

We have a very different approach at Joyance. In 2022 alone, 49% of our invested capital went towards all-female founder teams as opposed to the industry percentage of 1.9%. Aggregated, 52% of our capital went to all female and mixed-gender founder teams.

The reason for parity in our portfolio may come from a number of factors, including a diverse team, women in leadership roles, and investing in startups founded by women for women (as opposed to startups founded by men who assume they know what women want).

The truth of it is, we are NOT intentionally picking founders because they are female; we are actively picking founders because they are fantastic. Our female founders are not siloed into solely femtech ventures. The female-founded portfolio companies we funded in 2022 are leaders across CPG, digital health, mental health, skincare, foodtech, biotech, and greentech, just to name a few. We funded them because they are brilliant, determined, enterprising, honest, adaptive, creative, and disciplined, and we believe they will not just succeed, but thrive. Here are all the remarkable female-founded/mixed-gender-founded startups we invested in last year:

I see this as progress! There’s a lot of unlearning we still need to do, but if you look past the historical biases and judge entrepreneurs and companies on pure merit, a universe of outstanding opportunities will be revealed. I am hopeful that as the new generation of founders and investors emerges, we will be able to raise these depressing numbers just yet.

By Investment Associate Jenna Jung

Why We Invest in Women-Led Startups (Spoiler: It’s Not Because They’re Women)

Written by Joyance Partners