In Florida, the proportion of new startups with at least one woman founder has increased to 23% of new startups in 2019, but only because the total number of startups being founded fell significantly over the second half of the decade (reflecting national trends). Although the number of women-founded startups in Florida that raised early stage venture funding increased over time, they still received a disproportionately small share—12%—of early-stage VC dollars over the course of the decade.
This work is made even more pressing by the fact that since the COVID-19 pandemic began, quarterly VC funding for women founders is at a three-year low, while overall VC investments have largely stayed the same, and we found that women founders were more likely to report having their revenues drop since the pandemic began.
With regards to women startup investors, we know from the work done by All Raise that 65% of venture capital firms don't have a single woman partner and only 13% have a woman decision-maker. In Florida, we found that only 15% of firms had any woman team member listed at all, and only 8% had women in leadership or investment positions.
This report is divided into four sections:
Women Founders in Florida and Regional Comparisons
Startup Investors in Florida
Startup Challenges and Milestones
Database of Known Women Founders and Institutional Investors in Florida
This glaring gap exists across women founders and investors both nationally and in Florida. To help close that gap, we've taken three approaches:
1) Increase the Support for Women-Led Startups: Create support channels to help accelerate the growth of women-led businesses. Our partners at Tampa Bay Wave launched the TechWomen Rising accelerator in August and have been working intensively with 13 women founders to hit the critical growth milestones for their respective businesses. We at Embarc Collective have had the chance to check in regularly with these founders as part of our research for this report and can reinforce that a dedicated program like TechWomen Rising can not only provide key lessons that founders need to scale, but also a peer community and accountability.
2) Increase the Number of Women Startup Investors in Florida: The startup investment community does not reflect the demographics of our state. As reported in HBR, diverse investment teams do better than homogeneous ones.. We need to find pathways to both grow and diversify the investor base in Florida. However when accredited women investors are asked why they are not actively investing, not knowing how to evaluate a startup is often a top reason. That is why we have identified 50 women to participate Embarc Collective's first Glaring Gap Summit. This is an intensive 3-day training that will give these women the tools to thoroughly evaluate a startup investment opportunity.
3) Create the Commitment: Not investing in half of the population is a problem for all of us. We need to create accountability for our community to make things better. All participants of the Glaring Gap Summit will sign a pledge to be part of the solution. We hope that you are as motivated by the data in the Glaring Gap Report as we are to also create change. We invite you to commit to being a part of the solution by signing our Pledge to Eliminate the Glaring Gap. Together, we can make sure that day by day, more women-led startups are being built and invested in.
We looked at Crunchbase data for Florida startups founded in the last decade (2010 through 2019). We limited the results to companies for which Crunchbase had data about the founding team, resulting in 2,436 startups. We also included all early-stage funding rounds for those companies that occurred within the same time frame.
When we refer to "early stage rounds," we mean rounds that are listed on Crunchbase as being Angel, Pre-Seed, Seed, Crowdfunding, Convertible Notes, Series A-C, or Venture - Series Unknown.
Bigger Slice of a Smaller Pie
The proportion of new startups in Florida with a woman on the founding team increased from 12% of new startups in 2010 to 23% of new startups in 2019. While that may seem promising, this is actually the result of a very large drop in new startup formation that occurred over the second half of the decade. In 2010, 26 out of 209 new startups in Florida had a woman founder, compared to 25 out of 108 in 2019.
Wait, so there are fewer startups being founded?
Yes. While it's beyond the scope of this report to dig into why this might be the case, here's what we know: the overall rate of entrepreneurship has been going down for decades in the United States, and that trend has accelerated in recent years. While that may not have seemed to be the case for tech startups, in our data, we found that new startup formation in Florida peaked in 2013 (with 781 new startups being founded, down to 214 in 2019), and across the United States it peaked in 2014 (from over 15,000 in 2010 to under 5,000 in 2019).
Funding Rounds in Florida
In 2010, none of the 18 early-stage funding rounds for Florida startups had a woman on the founding team. Since then, the percentage of funding rounds raised by women-led companies has hovered between 15% and 20%, clocking in at 19% in 2019 (38 of 201 rounds).
Dollars Raised
The best year for women-led companies in terms of fundraising was 2017, where startups with at least one woman founder received almost 24% of the early-stage dollars that were raised that year. That being said, when women-led companies raise they're less likely to raise as much as men—over the course of the decade, only 11% of early-stage venture dollars went to women-led startups, despite those startups raising 17% of the total early-stage rounds.
Regional Comparisons
We also considered these same measures—the percentage of women-led startups, funding rounds raised by women-led startups, and dollars raised by women-led startups—across 20 metro areas in the United States.
We see most metros with 15% to 20% of all new startups being women-led. Most metros see a similar or worse percentage of funding rounds being raised by women-led startups, and many metros then see a sharp drop-off for the percentage of dollars raised by women. For example, only 4.4% of dollars raised went to women-led startups in Tampa Bay, despite the fact that 22% of Tampa Bay's funding rounds were raised by women-led startups.
Startup Investors in Florida
About the Data
As with our founder analysis, we sourced our investor data with Crunchbase. We considered investors that invested in Florida startups, as well as investors based in Florida. For each group, we examined both firms and individual/angel investors.
Institutional Investors in Florida Startups
Of the investors that invested in Florida-based startups, the majority were institutional. We know from the work done by All Raise that 65% of venture capital firms don't have a single woman partner, only 13% have a woman decision-maker (someone at the firm who writes checks), and that the growth of women in venture capital is concentrated in Silicon Valley and New York City.
So, even assuming a generous 35% of firms with a woman partner, there would be more individual male investors participating in the best year for early stage rounds (2016) than venture capital firms with a woman partner.
Individual Investors in Florida Startups
Looking specifically at individual investors that made investments in Florida-based startups between 2010 and 2019, we see that women investors are a small minority in Florida's entrepreneurial landscape. 2016 had the most individual women participating in investment rounds, and that was only 9 out of 74, or roughly 12%. We also found that individual investors were more than twice as likely to invest in pre-Series A rounds (Angel, Pre-Seed, Seed, Convertible Note, and Equity Crowdfunding) than Series A-C.
In this set of investment data, women investors tended to invest equally in men- and women-founded companies, while men investors invested in 5x more men-founded companies than women-founded companies. Combined with individual investors' propensity for investing in the earliest-stage companies, we believe this supports a drive for increasing the number of individual/angel women investors.
Investors Based in Florida
Looking at investment firms that are based in Florida (regardless of whether or not they invest in Florida startups), we see similarly bleak numbers as the national landscape. Of the 271 investment firms in Florida listed on Crunchbase with 1 or more investments, only 40 firms (15%) had at least one woman on the team. When including just investment or leadership roles, that number drops to 23 firms (8%). When looking at individual/angel investors, the picture isn't any better. Of the 276 individual investors with at least 1 investment listed on Crunchbase, only 18 (7%) identified as women.
If we consider those numbers alongside All Raise and Pitchbook's findings that women venture capital partners are far more likely to invest in startups with a woman founder or startups with a woman CEO (2x and 3x, respectively), it becomes increasingly clear that addressing the glaring gap requires increasing the number of women investors in tandem with the number of women founders.
Startup Challenges & Milestones
Building a company obviously requires capital, but we wanted to take a closer look at the other dimensions of building a business - customers, marketing, product, talent - to understand how to best serve women tech entrepreneurs in Florida. Broad entrepreneurial support, including incubators and accelerators, deliver workshops and mentorship across a variety of business-building subjects. Our hope is that this data can help ensure that these organizations and individuals in Florida are delivering the most relevant local support to the women tech entrepreneurs we collectively serve.
About the Data
Embarc Collective's 2020 Community Survey asked founders about their goals and challenges, as well as a supplementary set of questions about the impact of COVID-19 on their business. Of the 81 founders who responded to the survey, 23 identified as women, and 58 identified as men. We also worked with 8 women founders from Tampa Bay Wave's TechWomen Rising cohort on setting and tracking milestones for their companies.
Defining Startup Challenges
The women entrepreneurs surveyed were acutely aware of the breadth of challenges a founder faces when building a business. For each challenge except office space and customer acquisition, a larger proportion of women founders than men founders indicated they faced that challenge.
With regard to the top challenges, marketing/storytelling and funding were listed as the single biggest challenges most frequently among women respondents.
What about COVID-19? The challenges created by COVID-19 for women entrepreneurs were acutely felt during the fielding of research for the Glaring Gap report, but just starting to be understood. And in some ways, areas that were previous challenges have been muted during the pandemic, such as Florida not being perceived as a top destination for technology startups.
"I do not feel that geography plays as big a role as it used to, and funding sources for COVID-resistant services and products seem to be rising."
"The rise of 'doing business anywhere' makes Florida feel like it could be a very attractive place to relocate...bringing talent, capital and enterprise with it."
Traction Forward
Embarc Collective's methodology is based on achieving identified business milestones. In the Community Survey, we asked about the most important milestone in the next 12 months. Across all men and women founders, growth/customer acquisition was the most important milestone by a significant margin—at 62% of all respondents versus 20% for launching or improving their product.
More women founders than men selected growth/customer acquisition as their most important milestone (70% to 59%) while men were more likely to select launching or improving their product as their most important milestone (22% to 13%).
Supporting Women Founders
With a large number of support organizations to help entrepreneurs and businesses building in Florida, women entrepreneurs have access to a variety of programs and services as they are getting off the ground. With the information that follows, entrepreneurial support organizations can evaluate how their offering matches where entrepreneurs are prioritizing needing assistance.
Respondents indicated that connections to capital sources were the most needed area of support. However, in addition to capital connections, women respondents listed business coaching, press coverage/brand building, and introductions to mentors/advisors as key areas where they are also seeking help.
A Moment to Promote
Because Embarc Collective's offering was built off the insights from prior years' Community Surveys (which offered similar findings), our on-going support specifically focuses on these prioritized areas. These findings also demonstrate that cohort-based programs like Tampa Bay Wave's TechWomen Rising can also be a key asset to local women founders and deliver on prioritized needs.
Women Founders & Investors in Florida
As part of our ongoing work, Embarc Collective has assembled a database of women founders and investors in Florida. We welcome additions from the community—if you would like to add an investor or add a founder, please do so.
A Call to Action for the Community
In the Community Survey, we asked respondents where they want support from the broader community. Women respondents noted the following needs as where the community can help them the most:
Funding
Marketing/Storytelling
Acquiring Customers
Developing Corporate Partnerships
This is an opportunity for each of us to think about how we can support women-led companies being built in Florida and the power we can harness to support their growth. With the needs clearly outlined, we want to hold each other accountable for making a positive impact so that Florida can become a top state for women to build a technology business. Sign the Glaring Gap Pledge to commit to turning insights into impact.
