Investing / Women in tech

VC-backed female founders aren’t the whole startup story: Charlie O’Donnell

Don't congratulate Brooklyn Bridge Ventures for having the largest percentage of women in his portfolio, congratulate him for sticking to his strategy, says its founder.

Charlie O’Donnell led the pack for backing the most female founders among New York venture firms studied by Business Insider. O’Donnell wrote on his blog that congratulating him for his investing in women is weird. There are more complex reasons for the relatively small number of women-run firms launched with venture capital. We should look at the broader entrepreneurship story, O’Donnell said.

As we’ve written as well, there are other ways to fund a company — venture funded companies are a small sliver of the entrepreneurship market.

“There is much more pull today to raise VC because besides the money, rightly so or not, there is prestige, power and press,” Gauri Nanda, founder of Toymail, told Technically Brooklyn. “Toymail is not currently raising, but all of the VCs we’ve talked to in anticipation of raising have been men, and it seems much more male-dominated than entrepreneurship or even tech in general.”

Toymail is not Nanda’s first venture. She previously founded Nanda Home, which she bootstrapped to profitability. We’ve written more about her here.

The study delineates its methodology as follows: “Business Insider researched active portfolios for 16 early-to-mid-stage venture capital funds in New York.” It doesn’t say whether or not the list represents all such funds or what percentage they studied, but it does say that they didn’t consider angel investors, incubators or accelerators.

From that list, Brooklyn Bridge Partners came out way on top, by percentage. With only thirteen companies in his portfolio, O’Donnell has funded eight led by women. Percentages are just one way to look at numbers, though. Ten firms on the list had funded eight or more firms led by women. Some had funded many more than that. Lerer Ventures, for example, has funded 26 female founded firms. We also noticed a few other funds that funded companies with at least some tie to Brooklyn:

If we missed others, let us know.

O’Donnell makes a few interesting points about his decisions. First, he argues that in his experience, women don’t seek funding till they are ready, writing, ” I think I can count on one hand the number of times in my career where a woman has pitched me with ‘just an idea that wasn’t built yet. Guys, on the other hand, do it all the time.”

Rachel Kaplowitz, CEO of Honey, said that she believes the imbalance in funding may relate in part to the numerical imbalance between total male and female founders overall, writing “Possibly because so many startups are tech focused and women have not pursued technical education in the same numbers as men… yet.”

O’Donnell also writes that a fund’s strategy can skew male due to history. So, if firms tend to favor proven entrepreneurs, that’s going to skew their results male, as more firms have been founded and successfully exited by males at this historical moment. As more female founders exit and start new ventures, those funds which favor veteran entrepreneurs could show movement in those numbers.

Companies: Honey / Toymail / Ringly / Brooklyn Bridge Ventures / First Round Capital / Union Square Ventures
Series: Brooklyn

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