Record share of VC deals for women founders obscures massive disparities

Women-founded companies in the US received their largest-ever share of venture capital deals last year, according to PitchBook. Sounds great, right? There are just a few oh-so-tiny caveats.

First, overall VC funding absolutely tanked in 2023, falling from $242.2 billion raised in the US in 2022 to $170.6 billion. So while women-founded companies got 27.8% of the VC pie last year compared to 18.7% in 2022, last year’s pie was much smaller. So much smaller, in fact, that their $44.7 billion haul last year was just half a billion more than the $44.2 billion raised in 2022.

Caveat #2: That $44.7 billion is massively skewed by one $10 billion deal for OpenAI, whose founders and early funders include several women. Without that deal, companies founded with women would have raised $34.7 billion last year, or $9.5 billion less than in 2022. Their share of deal value without the OpenAI deal, 22.8%, is still an increase over 18.7% from 2022. But again: tinier pie.

It wasn’t just that founders of all genders raised fewer VC dollars last year. There were also a lot fewer deals. (By the way, we’re on our third caveat.) The number of deals also fell for women-founded businesses. Companies founded by women alone received 20% fewer deals last year: 894 vs. 1,112 in 2022. For companies founded not exclusively by women (i.e., dudes involved), deals in 2023 fell 25%, to 3,315.

That brings us to our fourth caveat, the last we’ll mention here but by no means the last one you can find in the report.

You know how we’ve been comparing companies founded solely by women with those founded by both women and men? Well, the report data also breaks out companies founded solely by men. Let’s compare their VC haul to the companies founded by women alone—no coed founder teams, no OpenAI. Last year, just-women-founded companies raised $3.2 billion in 894 deals (a decline of $1.9 billion from 2022, by the way). And the boys? Companies with men-only founder teams raised $114.8 billion last year in 9,280 deals.

If companies founded by men alone are raising 36 times as much money as those with only women founders, in more than 10 times as many deals, does that really equate to “companies with at least some women founders got their biggest-ever share of the pie?” Or is it the other way around?