Driving towards a more diverse founder community

Current State of Fintech Startup Ecosystem

Fintech has become a major force since the financial crisis, with venture-backed fintech startups raising record funds and births of new fintech unicorns. However, according to Fast Company in reference to the KPMG Pulse of FinTech Report, of the nearly 500 deals closed in the US in 2016, less than a dozen went to companies founded by women. Out of the billions of dollars that went into the sector, only a handful raised Series A or Series B funding, including Ellevest, Wise Banyan, PolicyGenius, ApplePie Capital, and SupportPay.

The stats don’t stop there:

  • According to the Financial Times, only 8% of the fintech board directors globally are women, compared to 22% in big banks.

  • Per only 5.4% of S&P 500 Finance and Insurance companies have women CEO.

  • Only 10% of venture-backed companies had a female founder, as reported by the Case Foundation.

  • The share of all new female entrepreneurs decreased from 1996 to 2016, according to the Kauffman Index of Startup Activity published by the Kauffman Foundation.

Against the grim backdrop, there are some interesting consumer data points:

  • Women make or influence up to 80% of household buying decisions worldwide; Women’s consumer spending is projected to rise to US$28 trillion by 2018, according to Global Banking Alliance for Women

  • 73% of women globally reported being unsatisfied with their banking services, according to Boston Consulting Group

Given the vast potential economic opportunities, it would seem to make sense to promote more women entrepreneurs and/or create solutions for women, from both business and social perspectives.

Opportunity cost of inaction

The gender equity problem in the startup world is multifold. Only 8% of VCs in the US have female partners. This gender gap may lead to VC firms being less likely to invest in female-founded or female-led firms due to emotional disconnect or lack of access to the familiar social networks. Indeed, fewer than 5% of all VC-funded firms have women on their executive teams, and only 2.7% had a female CEO.

According to the National Association of Women Business Owner, women own more than 9.4 million firms in the US, which is nearly a third of all privately-held companies. Yet, female founders are struggling to raise the funding they need for their startups. Even when they manage to raise funding, it is significantly less than that of male entrepreneurs. According to PitchBook, VCs invested $58.2 billion in companies with all-male founders in 2016, while women received just $1.46 billion in VC funding last year.


No wonder the 2016 Global Gender Gap Report from the World Economic Forum (WEF) estimates that it will take 170 years to achieve gender parity in the workplace.

Resolution for positive impact

There are no easy answers when it comes to closing the gender gap. It will require persistent effort from all of us in the ecosystem to be able to drive meaningful change.

Organizers of events must become more conscious in inviting more women and including more of them on stage. Companies must be mindful in providing more opportunities to raise the profile of women at work and give them a chance to shine. Consider the women in your team for speaking engagements and include their voices on publications. Implement mentorship programs for women and provide support for caregivers, who most often tend to be women.

Accelerators should strive to put the spotlight on diversity and give stage time to underrepresented entrepreneurs. As with VCs, work harder to actively seek out women entrepreneurs and look outside the usual social circles to include more women-led companies in the programs.

Village Capital, one of the accelerators we have been working with, have been very successful in raising the profile of otherwise underrepresented entrepreneurs around the country. Here are some pretty impressive stats on their portfolio companies:

  • 43% of portfolio companies have female founders or co-founders.

  • 79% of portfolio companies are located outside of New York, Massachusetts and California.

  • 18% of US portfolio companies have people of color as founders.

In our Innovation@50+ LivePitch event held at Mountain View, California this past April, of the 10 fintech program finalists on stage, half of the companies have female founders or co-founders.

More female entrepreneurs will bring about more women in the industry, attracting more VCs funding women-found companies, resulting in better financial outcomes for women and more inclusive solutions.

Achieving gender parity is teamwork; success will require effort from all genders. We hope more will join us in the journey towards inclusion.