Female founders of VC-backed companies raise only 2% of the venture capital invested annually. It’s a worrying statistic that is often repeated year after year by publications, researchers, and the VC industry at large. However, it can be misleading and ignores the progress that has been made over the past 20 years.

This 2% figure ignores the many women who are cofounders, CEOs, COOs, and CFOs. While just 2% of VC capital goes to firms founded solely by women, closer to 20% of VC capital goes to firms with at least one woman as a cofounder. 

As a venture capitalist myself, I believe the narrative surrounding women founders demands a radical shift and that overlooking the entrepreneurial women who raise funds in partnership with their male cofounders is a mistake.  

The impact of women cofounders

For example, Melanie Perkins, CEO of Canva, has two male cofounders. Valued at $26 billion, Canva is believed to be the highest-value VC-backed woman-led company ever. Helen Greiner, cofounder and former CEO of iRobot, took her company public in 2005. 

Many women cofounders have built “unicorns”—privately held startups with a valuation of over $1 billion. For instance, Michelle Longmire, is the cofounder and CEO of the clinical trial software firm Medable. Anastasia Volkova, cofounder and CEO of Regrow Ag, is revolutionizing sustainable management for agricultural corporations worldwide. And Sheila Mikhail, cofounder and former CEO of Asklepios BioPharmaceutical, sold the company to Bayer for a reported $4 Billion in 2020. None of these cofounders are counted in the calculation that women fundraise just 2% of VC funds. However, women like these are transforming industries, and it’s time to recognize their funding leadership, elevate their successes, and increase capital investment in companies like these.

Here’s why: Women are better stewards of investors’ capital. According to Boston Consulting Group, they generate 78% more revenue per invested capital than their male counterparts.

“With fewer companies successfully exiting in 2023 overall, female-founded companies accounted for a larger share of those that did,” reads a report from Pitchbook. “They reached a record 23.3% of total exit activity and demonstrated a third straight year of growth in that metric.”

The impact of women investors

For the past several years, the investment impact of women funding women has been led by successful investors like Kirsten Green of Forerunner Ventures; Aileen Lee, Cowboy Ventures; Theresia Gouw of Acrew Capital; and Mary Meeker of the Bond fund, who made her very first investment in Canva.

Research suggests that when a woman is on the investing team, a female entrepreneur is 70% more likely to be funded than if no women are on the team. And VC firms with at least 10% female investing partners have 1.5% better fund returns and 9.7% more profitable exits. 

VCs must increase the number of women investing partners—which is currently standing at only 11%, according to Harvard Kennedy School—with a sense of urgency. In 2023, an estimated 23 women made partner at venture capital firms. I applaud these firms for becoming more inclusive. Now, I challenge them to fund more women who are building companies to scale.

We should invest in women founders because they are great visionaries who can execute their vision, assemble strong teams, and build companies to scale and sustainability. All of this requires men and women to open their wallets to women who are building companies that solve world-changing problems—and to celebrate the women who already have.