Record VC Funding for Female-Founded U.S. Startups in 2023, But Deal Volume and Equity Still Lag

Recent data show both progress and persistent structural gaps for female founders in the U.S. VC ecosystem. The rise in share of deal value to female-founded or co-founded companies—from 18.7% in 2022 to 27.8% in 2023—signals that large rounds, especially in sectors like AI and ML, are reshaping headline statistics. However, this increase masks weaker trends in deal count and in funding exclusively for all-female teams, which remain stuck at low, single-digit percentages (US$3.2 b in 2023) and are declining.

In 2024, momentum for female founders was mixed. Although aggregate deal value rose to ~US$38 b (+27% year-over-year), total VC investment in the U.S. continued to slump, and female founders’ share of deal value fell slightly to roughly 19.9%. Deal counts declined for female-founded companies for several consecutive years, suggesting that fewer companies are securing capital.

Another key factor is the discrepancy between mixed-gender founding teams and all-female teams. Mixed teams capture a much larger portion of VC investment, especially where female co-founders are present alongside male counterparts. All-female-only teams continue to raise very little capital and make up a minimal share of deals.

The representation of women in VC firms—both at GP/partner level and as angel investors—remains underwhelming. Women make up roughly 17%-18% of decision-makers in larger U.S. VC firms, and participation of female angels fell significantly in 2023. These dynamics have knock-on effects for deal selection, mentorship, networks, and information access.

Strategic implications for investors, founders, and policymakers include:

• Heavy reliance on large AI-/ML-driven rounds poses concentration risk; true long-tail support for female founders across sectors and stages remains weak.
• All-female teams continue to be undercapitalized, suggesting that gendered funding dynamics still favor mixed-gender founding structures.
• Diversity among decision-makers in VCs is critical: increasing female GPs and angels may accelerate equitable access.
• Exit activity declines (both value and count) indicate that returns are under pressure; that may make LPs more cautious about backing female-founded portfolios until exit pipelines recover.

Open questions remain:

• How durable is the 2023 spike in female-founded deal value, given it was driven by a few outsized rounds—will future years follow suit or regress?
• What barriers hinder all-female teams compared to mixed-gender ones, beyond raising capital—are they more cautious, systemically underweighted, or structurally disadvantaged?
• How are female founders outside tech/AI sectors faring, especially in traditionally underfunded geographies and underserved markets?
• What precisely causes the decline in female angel participation in certain years—and how might that impact early-stage deal flow for female founders?