When it comes to venture funding for women founders, New York City is outperforming Silicon Valley by leaps and bounds, according to a new study from PitchBook and All Raise.
The report found that 27.3 percent of New York City fundings in 2018 went to companies with at least one woman founder, compared to 18.9 percent in the Bay Area. This gap was not a fluke — New York City hovered above the Bay Area, as well as Los Angeles and Boston, from 2014 to 2017.
Los Angeles pulled ahead by less than one percentage point in 2018.
A few factors may contribute to New York’s relatively larger portion of venture deals for women-founded startups. The city’s strongest industries attract the attention of big-name venture firms, and it has better infrastructure for women to network, including mentorship program WENYC, the report said.
Despite some encouraging metrics, the global venture capital market still has work to do when it comes to equitable venture financing. Women make up 50 percent of the population, but their startups account for just 20 percent of venture-backed companies. Additionally, 82 percent of all capital invested last year went to companies without any women founders.
There are some more bright spots, however. The number of fundings that go to women-founded startups has quadrupled in the last decade. And in sectors like pharmaceuticals and biotech, women are gaining ground: women-founded startups brought in 27 percent of deals in these spaces so far in 2019.
Perhaps the study’s most notable finding was that startups with women founders tend to exit one year faster on average than startups founded by men. Additionally, the exit rate for women-founded startups is growing faster year-over-year than the exit rate for all-men founders. This supports existing research showing women-founded startups generate more revenue than startups with no women founders and can be a pitching point as women founders shop their concepts to venture capitalists.