In most industries where women dominate purchasing power, female-led companies are experiencing rapid and exponential growth. For example, Pat McGrath Labs, a cosmetics company of the same name headed by a famous make-up artist, became a unicorn in 2018, as did Huda Beauty and Canva, a graphic design platform. Fourteen women-led unicorns in the US form a melting pot of industries, including Eventbrite, an event platform, SaaS-based customer experience management software Medallia and the consumer credit company Credit Karma. A total of $23.9 billion in VC-backed companies around the world have at least 23 female founders. While these numbers are disheartening, a look at the Pitchbook highlights the progress made by female entrepreneurs in building unicorns in a variety of industries.
The article is based on my conversation with Ari Horie
Eha Narkhede is co-founder and CEO of Confluent, a Palo Alto-based data streaming specialist, a graduate of New York University, and a native of the city. She sells management tools and services to facilitate the operation of Kafka, an open-source data processing platform and started in 2010 with a founding team. She talks about why she had adapted to her transition to the CTO role as she got older. Daphne Koller is co-founder of Coursera, a learning platform created to offer online open courses. She left the company to become the chief computer specialist at Calico and founder and CEO of Intro, a drug research startup.
The companies worth $1 billion or more in the startup industry are referred to as “unicorns,” a term coined by venture capitalist Aileen Lee in 2013 to demonstrate the statistical rarity of multibillion-dollar ventures. Traditionally, unicorn status – a valuation of a million dollars or more – has been seen as a token milestone, but it is increasingly common as companies grow. Remarkably, the majority of US unicorns are under ten years old. The latest unicorn is Houzz, Nextdoor, founded in 2010. Read how unicorns work with female co-founders in this interview with Sarah Leary, founder of Nextdoor.
9 Women-Led Startup Unicorns To Inspire You!
“unicorns” are not magical beings in the startup industry but companies worth billions of dollars or more. According to Peter S. Cohan’s Associates, a management consulting and venture capital firm, there is just one unicorn for every 10,000 startups that have been funded. A typical venture capitalist meets 1,000 new companies a year and finances two. Given that women entrepreneurs receive less than 2% of venture capital, it is difficult for several venture capital-backed companies to obtain such a high valuation.
Women entrepreneurs promoted women in the first half of 2019 in the US, and a historic number of women-driven companies achieved unicorn status. According to new data from Pitchbook, in 2019, 49.9% of investments were made in startups founded by women. That funding helped some startups with at least one co-founder gain unicorn status in 2019, and some of them achieved valuations of $1 billion or more this year. However, the number of women in management positions is still in the single digits.
According to a study by the Kauffman Foundation, private technology companies with female-led businesses generated 35% higher returns than their male counterparts. In a survey of 350 startups by the Boston Consulting Group, 92 had at least one founder, 78 percent of all revenue, and 31 percent for men-led companies. When the capital was divided evenly between men and women, investors received $85 million more.
According to Innovate Capital, a venture capital platform, the number of startups in which at least one co-founder has a stake has fallen from 17% in 2018 to 12% in 2019. What is clear is that while the number of female unicorns is growing, there is still a significant gender gap in the venture capital and startup landscape. As companies pump money into promising startups, more and more startups are achieving unicorn ratings. In 2018, GSK-led New York startup Einhorn raised its valuation to $2.5 billion.
Given that women still make up only a fraction of the startup community, this data is not surprising. Over the past three years, there has been an increase in unicorns with at least one founder, setting the stage for a strong year for women in transition. Six were founded or co-founded by women of the 22 companies valued at more than $1 billion this year. Although a single-digit number does not seem like a good start, female founders are working hard to close the gender gap.
One way to start is to bring more women to the top of the company and provide more leadership opportunities. A recent analysis of startup teams at new unicorn startups shows that the percentage of companies with female founders has remained relatively stable. To date, studies of female entrepreneurs of Crunchbase and TechCrunch have demonstrated that the percentage of venture-funded companies with a female founder grew 8% between 2009 and 2012.
The Unicorn Club, which runs over $1 billion in venture-funded companies, had the vast majority of the male founding teams five years ago. According to Crunchbase data, by August, at least 39 private companies had reached the $1 billion mark for the first time with women (or men and women) on their founding teams. Jonathan Sposato, chairman of GeekWire and PicMonkey, is an angel investor who has been financing companies with at least one woman on the founding team since 2015.
He thinks it makes business sense because he gets a well-thought-out return on investment from women-led companies. Aleksandra Kacperczyk, Associate Professor of Strategy and Corporate Strategy at the London Business School, looked at the inequality between female and male entrepreneurs and how it affects entrepreneurs’ “startup decisions and subsequent investor funding decisions. When assessing the contribution at each stage of inequality, they found that it came from different types of startups.
According to female entrepreneurship statistics, companies run by women prove to be a safer option for investors. However, according to the statistics, they are having a hard time getting the capital they need. Women are building two times as many companies as men, and their startups have 13% of the total funding available, have higher success rates, and take fewer risks. The remaining gender gap, which disadvantages female entrepreneurs, is up to 35%, much of which reflects investors “gender preferences
According to a study by First Round Capital, companies with women on their founding team outperform their male counterparts by 63 percent. It is not easy for women to start a business, and finding the right investors and real partners can be even more challenging. In 2005, a group of female Wall Street founders founded Golden Seed, which invests in companies led by women.
Maya Strelar-Migotti, former US country head of Ericsson and former co-CEO of Marvel, talks about gender bias openly. She has led two major global companies to success. Check her interview with me last year.
Maya, Sally Pera are few silicon valley women legends, and they have helped several women executives and founders. They are very engaged in an advisory capacity with Golden Seed and other VC groups.
Ari Horie has founded women’s Startup Lab (WSLab), a founder development accelerator based in the heart of Silicon Valley providing stage-specific founder training to early-stage startups. WSLab’s mission is to guide women-led startups to victory and inspire change to impact the world.
Ari is a prominent Silicon Valley entrepreneur and has been named one of Silicon Valley Business Journal’s “Women of Influence in Silicon Valley” in 2015, one of CNN’s 10 Visionary Women of 2014, and “40 over 40” Women to Watch in 2015. Ari Horie is an active global keynote speaker at leading tech conferences
For years, Falguni Nayar guided the founders of Indian companies through roadshows in Europe and the U.S. as they made their way to stock market debuts. Now the former investment banker is steering her own startup to a historic initial public offering. Nykaa, her brainchild, has grown into India’s top e-commerce site for beauty products, with the endorsement of Bollywood stars and a fervent following among twenty-somethings. The startup, formally known as FSN E-Commerce Ventures Ltd., filed preliminary documents late Monday for an initial public offering, which Bloomberg News has reported could value the business at more than $4 billion.
It is an impressive time; humanity has come a long way. One hundred years ago, women were fighting slavery, and today, they are at gender and social equity.
Reference https://www.connectedwomen.co/magazine/9-unicorn-startup-women-founders/embed/#?secret=u3z2IAg86T
https://www.totalprocessing.com/blog/unicorn-startups
https://www.aljazeera.com/news/2021/8/3/indias-first-women-led-unicorn-readies-its-ipo
