Women Founders Received Smallest Share of Funding in 4 Years

If you care about broadening opportunity at startups - this year sucked.

Only 4.6% of funding to pre-seed companies on Carta went to women-only founding teams this year.

That's the lowest share in 4 years and a significant drop from the (still low) 6.3% that women-only founding teams garnered in 2022.

And of course startups in general this year raised much less cash than in the prior 2. So women-only founding teams are having to make do with a smaller share of a smaller pie.

Not great.

Every year since 2018, Carta has combed through our own pool of aggregated, anonymized data to pick out trends in who receives equity, who receives funding, and how the opportunity in startups is distributed across race, ethnicity, and gender.

You can read our full Carta Equity Report for 2023 for an in-depth review of the data (link in comments below or type the URL in graphic into your search bar).

A quick tour of the data:

𝗟𝗼𝘄𝗹𝗶𝗴𝗵𝘁𝘀

• The share of funding, from both pre-seed convertibles and priced equity rounds, going to women-only founding teams declined. The same was true for Black and Hispanic founders.

• Women make up only 9% of engineering executives hired at startups from 2019-2023.

• The percentage of non-white hires across all startup positions, which had been gradually increasing over the past 8 years, fell in 2023.

• Women founders who are Black, Hispanic, or Middle Eastern represent only 0.6% of founders in companies started in the last 2 years.

𝗕𝗿𝗶𝗴𝗵𝘁 𝗦𝗽𝗼𝘁𝘀

• Younger founders are much more likely to be diverse than their older peers.

• Founders of Asian descent saw their relative share of funding increase gently this year.

• Share of investment into women-only and mixed gender founding teams at the Priced Seed stage hit a new high this year.

Now, the obvious question to ask is Why? Why did the gradual progress we had been seeing in these metrics retreat in 2023?

This is a guess, not based on any data. But it does feel as though the entire VC world retreated to "safety" this year (outside of perhaps AI).

VCs focusing more on repeat founders, who are less likely to be diverse. LPs focusing more on traditional VC funds as opposed to emerging managers. On down the line.

If progress towards a more inclusive startup world is “two steps forward, one step back”—2023 was the step back.

Here’s to 2 steps forward next year.

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