What Crunchbase Learned About Female Founders
If you follow the business world, where startups are the name of the game, then you know that women are not readily found in technical or founder roles. If you try to quantify the issue with some statistical data, you’ll find that just as scarce.
The issue was brought to the forefront back in 2013 by Tracy Chou when she exposed the anemic flow of published data from mainstream technology companies and startups. Information on the number of women found in technical roles in these companies was virtually nonexistent.
The Information Begins to Flow
Companies that got their start after 2013 began to report the number of women employed in technical roles. Established companies followed. Household names like Google, Microsoft and Facebook, along with lesser-known but rapidly growing companies like Etsy and Dropbox, started releasing information on the number of technical roles in their organizations that were filled by women.
The numbers were less than impressive, but it was a start. By making this information available outside their internal departments, technology companies could formulate a baseline from which progress could be measured.
The flow of data remained anemic, however, when it came to startup founders. In 2015, project Choose Possibility was started to collect information on the challenges faced by women entrepreneurs. A comprehensive study was still missing, however.
Crunchbase, a social media platform utilized by professionals to network with their peers, began to ask questions. Crunchbase considered the dilemma of female founders a problem they were destined to solve, given their role as the startup community’s open data platform of choice. In March 2015, the Crunchbase research team began to collect data on every U.S.-based startup that was initially funded in 2009–2014. The goal was to identify the founder of each startup and determine his or her gender.
In cases where a name could indicate either a male or a female, the researchers did whatever additional work was needed to clear up the ambiguity. The results of Crunchbase’s study were not without issue, but the potential error rate was determined to be statistically insignificant. The results, when all was said and done, give us data that can be analyzed to discover the rate at which women are founders of U.S.-based, funded startups.
The Crunchbase study found that there were over 14,000 funded startups based in the U.S. in 2009–2014. At least one female founder played a role in these startups 15.5 percent of the time. The most interesting tidbit of information was found in the breakdown of those numbers, however. The team discovered that only 9.5 percent of the startups in 2009 included at least one woman founder. But by 2014, that number had increased dramatically, coming in at 18 percent.
Based on the data, the reasonable conclusion is obvious: a steady increase in the number of women founders is undeniable. In fact, look at the absolute numbers against the total number of startups during the studied time period. We can see that the number of companies with a female founder increased by a factor of four.
Women are active in all roles in business today; validation for that claim can be found on Crunchbase itself. Data will continue to pile up that demonstrates the growing movement of female founders.