VC activity for women-owned startups is seeing an upturn, just as anti-DEI sentiment looms

Data shows a potentially encouraging upturn for women founders against the odds of increasingly anti-DEI policy and sentiment.

PitchBook released its 2024 Female Founders in the VC Ecosystem report today, showing that funding at the late stage VC and growth stages increased for women founders in 2024, but the amount of early-stage funding declined — and fewer early-stage investments means fewer women-founded startups getting a foot in the door. When it came to women-founded startups and exits, women founders secured a record 24.3% of the US total VC exit count.

In 2024, for the first time since the 2022 drop, VC deals with women founders began to increase as the economy began to recover, though the future is uncertain.

“Sociopolitical tides are shifting with renewed action against diversity, equity and inclusion and [environmental, social and governance] initiatives, which will impact the trajectory of founder demographics in the US,” wrote Annemarie Donegan, senior analyst with PitchBook, in the report. “The degree of impact remains uncertain. President Donald Trump’s executive order to end DEI initiatives and related ongoing legal battles will take some time to settle and be reflected in funding figures.”

Donegan notes that the entry points for underrepresented founders across the board may narrow again, at least until legal precedent is decided. So far, according to PitchBook’s 2025 Q1 data from its Female Founders Dashboard, there’s a steep drop in VC deals for female founders.

But there is good news: Despite systemic barriers, women founders had a good year when it came to unicorns — privately owned startups valued at $1 billion or more. Thirteen female-founded companies reached unicorn status for the first time in 2024. The time it takes for a female-founded startup to hit unicorn status was shown to be slightly less according to PitchBook’s data, with female-founded unicorns taking a median time of 4.2 years compared with 4.5 years across the board in the US. 

When it comes to the VC investors writing the checks, women made up 17.3% of the decisionmakers in US VC firms with at least $50 million in assets under management (AUM), while 82.7% were male. Those numbers are about the same as the previous year, although PitchBook noted an increase in women decisionmakers in VC firms with less than $50 million AUM.

“Progression through the VC career ladder takes time, with several years between promotions in most cases, so we expect these figures to grow more slowly than deal activity,” wrote Donegan.

2025 is still recovery mode in VC

It’s been a rough few years for startups in the venture capital ecosystem, not least of all for women founders.

When the VC boom hit in 2021, fueled by the COVID pandemic-driven need for innovations in ecommerce, remote work and healthtech, as well as low interest rates and tech advancements, investment in women-founded startups spiked along with startups in general. 

That year, PitchBook data showed $7 billion in deal activity for 1,205 female-founded startups. Compared to the $280 billion in deal activity for 13,308 male-founded startups, the numbers are disproportionately low, with women founders making up 9% of recipients of funds and with deal amounts of just 2.5% of their male counterparts. 

And yet, 2021 was a huge increase over the previous three years, when deals for women founders were on a slow growth trajectory, totaling between $3.2 and $3.6 billion. The pandemic boom may not have leveled the playing field, but it didn’t leave women behind. 

VC deals dropped across the board in 2022 and 2023, the result of post-pandemic economic uncertainty, rising interest rates and a decline in tech stocks. In 2024, although the numbers increased, the proportions remained a contrast.

How women can break through in the early stage

Female founders are treated differently in early stages than male founders, according to investors at a recent Innovation Works panel in Pittsburgh that addressed the funding gap. 

VCs are more likely to ask men questions about their startup’s potential for gains, while women are asked about the potential for losses, according to studies published in the Harvard Business Review. This bias has been found across both male and female VCs and can have substantial funding consequences for startups, according to the research. 

Meredith Meyer Grelli, a former founder and director of Project Olympus, a Carnegie Mellon University incubator program, suggested that female founders “flip the question” when questioning focuses on potential losses: “Address their immediate concern and then you quickly move to how you’re going to move forward in a positive growth manner.” 

Takeaway

Economic recovery was reflected in an across-the-board upturn in VC deals in 2024 that proportionately impacted female-founded startups. With a new administration that intends to criminalize diversity, equity and inclusion, the future for underrepresented founders, including women founders, is uncertain.