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How COVID-19 and the resulting recession are impacting female founders

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Last week The Exchange dug into recent data concerning the amount of venture capital raised by female founders. As a refresher, the numbers were not good.

In Q3 2020, PitchBook data reported that US-based female founders raised $434 million across 136 rounds. That dollar amount was off from $841 million in Q2 2020, for context. The numbers were a dramatic turnaround from where 2019 left the industry.


The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.


The sharp decline in available capital is slowing the pace at which women are founding new companies in the COVID-19 era. There are other factors are at play, new data from the Female Founders Alliance (FFA) indicates, but the funding drought is not helping.

Overall, the pace at which women are indicating that they intend to found a company, according to a group of women that the FFA is tracking longitudinally, is slipping.

FFA, a community of women founders and a startup accelerator working to achieve greater gender diversity in technology, built a sample of 150 women from tech hubs “with high likelihood of having entrepreneurial aspirations,” according to its dataset. It asked them about their entrepreneurial goals both before COVID-19 arrived, and again this September.

The changes in responses from before of the pandemic and today are striking. Let’s examine the data in light of what we learned last week concerning capital available for female founders and see what we can find out.

Depressing declines

In the group of 150 women, before the pandemic and its resulting economic and societal disruptions, 54.7% reported that they were “very likely to one day start a company,” with nearly 32.7% answering that they were somewhat likely to do so. Around 12.7% of the group said that they would “most likely never start a company.”

So, around 87% of the women in the group were looking to found a company at some point.

The Female Founders Alliance interviewed the same cohort in September, deep into the pandemic cycle, and the results changed:

  • 34.4% of respondents said that they were “equally likely to start a company, [albeit] later than I planned”
  • 32.8% were “equally likely to start a company, [and] on the same timeline.”
  • 16.8% reported that they were “less likely to ever start a company when this is over”
  • And 16.0% reported that they had already started a company in the last 6 months that they hadn’t planned

The data is instantly parseable, so let me help a bit. Around 51% of the group will now either delay the founding of their company, or skip the exercise altogether. This implies a narrower pool of female founders generally, and inside of the technology industry as well.

That around a third of respondents were not changing their timeline is heartening. And that around one in six had already founded a company was exciting.

Happily, concerning the 16% of the women who wound up founding a company early, only 5% did so due to job loss. And the majority, some 64% did so because they “found a great idea/opportunity and jumped on it.” (Here’s a recent example! Here’s another! One more! How about a fourth?)

But inside the 51% of women sampled who were less likely to found a company, or were expecting to delay their plans, the reasons given were dispiriting:

  • 47.8% for “financial reasons”
  • 20.3% due to a need for “corporate benefits”
  • 20.3% due to “additional caretaking responsibilities”
  • 5.8% due to “stress, fear and lack of motivation”
  • 4.3% thanks to “all of the above”

Our current economic recovery will allay some of those issues, but not all. An improved economy will likely limit financial concerns, and caretaking responsibilities could decline once schools and daycares fully reopen (or men step up more and shoulder their half of the work). But given the slow pace of recovery what the numbers tell us about today, it’s safe to say that some women who would have founded companies will wind up not doing so.

This drain of potential innovation is to our society’s detriment.

To close, let’s go back to the top. Recall that we began with another look at recent declines in capital available to female founders? Well, among the FFA data that says nearly half of women reported planning on delaying or cancelling their entrepreneurial plans for financial reasons, there’s a nuance worth considering.

Here’s how the Female Founders Alliance described that answer, adding a bit more detail (bolding via TechCrunch): “The most common reason [for responding women to delay or cancel their entrepreneurial plans] was financial security, including the need for a steady paycheck, and the lack of funding for women entrepreneurs.”

Unsurprisingly, lack of access to capital means that less women founded companies. Sure, some of the declines were probably caused by women dropping out of the founder game before they raised, but the same thread pulls both ways: Some women didn’t found a company because they could not access capital.

So, here’s today’s founder and VC market, going backwards in time and becoming less diverse than before. 2020 really has been a year of letdowns.

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Conquer Your Pup’s Dander and Fur With $700 Off a Cobalt or Charcoal Bobsweep PetHair Plus Robot Vacuum

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Best Home DealsBest Home DealsThe best home, kitchen, smart home, and automotive deals from around the web, updated daily.

Bobsweep PetHair Plus Robot Vacuum & Mop (Cobalt) | $200 | Best Buy

Bobsweep PetHair Plus Robot Vacuum & Mop (Charcoal) | $200 | Best Buy

Allergies can be bad enough as the seasons change. Don’t let pet hair and dander add to that by vacuuming it up early and often. That chore is easier said than done— unless you have a robot vacuum to do the work for you. This lovely bright cobalt Bobsweep PetHair Plus robot vacuum and mop, only $200 today at Best Buy seems like an ideal option. That’s a whopping $700 off, by the way.

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You can get the same deal for the charcoal version of the robot vac, too. This model is not only specially made for picking up pet hair, it self docks and charges when it’s finished with the work.

It also comes with a mop attachment, so it can take care of those kitchen floors for you as well. Grab it while it’s still available for this fantastic price!

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Apple will replace AirPods Pro for free with faulty noise cancellation, static or crackling

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Today, exactly one year after Apple first launched the AirPods Pro — and thus the same day the very first AirPods Pro owners will see their one-year warranties expire — Apple has launched a repair program that offers free repairs or replacements for another whole year if your AirPods Pro experience issues with noise cancellation or static.

Specifically, Apple will fix:

Crackling or static sounds that increase in loud environments, with exercise or while talking on the phone

Active Noise Cancellation not working as expected, such as a loss of bass sound, or an increase in background sounds, such as street or airplane noise

Apple says only a “small percentage of AirPods Pro” are affected by the issues, but it apparently wasn’t just an early batch — Apple says affected units were manufactured “before October 2020,” meaning every AirPods Pro ever made might be eligible. That’s quite a recall if so. Apple says it will repair faulty AirPods Pro for two years after you first buy them.

We’ve heard complaints about degraded noise cancellation before, and at least one Verge editor has replaced their AirPods Pro under warranty. It’s nice to hear that Apple isn’t just cutting buyers off as soon as that warranty expires.

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This 55″ 4K TCL Smart TV Hangs on Your Wall for $200

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Best Tech DealsBest Tech DealsThe best tech deals from around the web, updated daily.

TCL 55″ S434 4K Smart TV | $200 | Best Buy

Best Buy has an insane deal going for a brand new 55″ 4K TCL smart TV. It’s the S434, which is pretty baseline for TCL’s lineup, but at just $200, there’s little to complain about. TCL’s panels are plenty sharp and accurate, and with this set, you’ll get HDR10 compliance for enhanced color and brightness in supported games and video content. This model has Android TV onboard for all your app needs, and with an included voice remote, all your favorite content is just a shout away with the help of Google Assistant.

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