Five female entrepreneurs will make funding pitches at an event in East Liberty Wednesday that seeks to challenge the persistent gulf between men and women in attracting venture capital investment.
Last year, businesses solely led by women attracted just 2.2% of all capital raised by venture-backed firms in the U.S., while companies with both male and female founders attracted 14.9% of the funding.
The Invest in Women x Pittsburgh startup showcase will exclusively feature tech companies founded or co-founded by women. Female leaders from each of the five participating businesses will make a three-minute presentation to a panel of five investors from across the country. The entrepreneurs have the chance to win between $100,000 and $250,000 in seed or series A funding from Chloe Capital.
The New York-based venture firm will host Wednesday’s program with local business incubator Ascender and the Richard King Mellon Foundation.
All 18 of the companies in which Chloe Capital has invested to date are led by women. Ascender Executive Director Nadyli Nuñez said women-run firms like Chloe Capital boost female entrepreneurs’ chances of raising capital.
“They're a lot likelier to fund other women,” she said. In fact, a 2020 study found that female venture capital partners are twice as likely as their male counterparts to lead early-stage investments in startups with at least one female founder.
That’s “not to say that all men aren't supporting women,” Nuñez said. “But,” she said, “biases are really, really hard to deconstruct … so that's why we want to bring in more women who have the money.”
Financial data firm PitchBook reported earlier this month that the share of venture deals involving companies headed only by women rose steadily from 4.6% to 6.6% between 2016 and 2021. But the data also shows that the percentage of dollars going to businesses founded entirely by women peaked at just 3% in 2013. Founding teams with both men and women have doubled their share of venture investment since 2011, when they accounted for 7% of the funds in the U.S.
Nuñez said, in addition to advancing gender equity, Wednesday’s showcase will highlight how diversity functions as a competitive advantage.
“Sometimes people see [this event] as a charity, and it's not,” she said. “It's good business. Diverse entrepreneurs [from] multiple different backgrounds and genders do statistically better in business.”
Research from 2018 shows that companies’ financial performance improves significantly with gender, ethnic, and cultural diversity. Women-owned businesses generate twice as much revenue per dollar invested than companies founded by men, according to another 2018 study. And at companies with at least one woman on the founding team, founders typically sell the entity or their share in it one year earlier than their peers elsewhere, a study found in 2019.
Nuñez noted that more funds have emerged in recent years to support founders from underrepresented groups. Locally, she said they include Black Tech Ventures, The Fund Midwest, Magarac Venture Partners, Next Act Fund, and The Fund XX.
“We're making some progress,” Nuñez said. But she added, “We need more than just a handful of funds … to make a difference here in Pittsburgh.”
“And that starts with inviting the very women who are entrepreneurs and have been struggling to the table of decision-making about how these funds are deployed,” she said. “We have to keep the conversation continuously honest and to hold ourselves accountable.”
Three of the five firms participating in Wednesday’s startup showcase are based in Pittsburgh.
BlastPoint, in East Liberty, uses artificial intelligence to guide the growth and sustainability of highly-regulated organizations such as utilities and credit unions. Bloomfield-based Lumis has developed a medical training platform that uses augmented reality technology. And North Oakland’s TalkMeUp has designed an app that employs artificial intelligence to coach users on workplace and customer communications.
Austin-based Voxable, meanwhile, designs voice and chat apps for companies. GoWell Benefits, in the Philadelphia area, simplifies the employee benefits enrollment process using an automated system.
If they receive funding from Chloe Capital at Wednesday’s event, GoWell Benefits and Voxable would be required to move to Allegheny or Westmoreland county.
Chloe Capital will announce at least one winner Wednesday following the founder presentations. The five panelists who will evaluate the pitches could also invest, although Nuñez said they might not be ready to publicize any deals Wednesday.
The event will take place between 5 and 7:30 p.m. at the Kelly Strayhorn Theater. Chloe Capital has hosted similar programs in eight other cities nationally.
