It’s difficult for women in deep tech to raise funds for startups, VC firms, non-profit groups, and more. Women-led companies have raised less than 3% of U.S. venture capital dollars, even though VC funds overall are raising more money than ever. While this number is depressing, there are many groups and companies working hard to make sure women in deep tech get the funding they deserve.
Stella Impact Capital is among these groups. The venture capital fund is a branch of Stella, an organization supporting women founders through its inclusive community, curriculum, events, and advisory services while cultivating a thriving network of investors who are increasing equality for women-led startups. As General Partner at Stella Impact Capital and Founder and Chairwoman of the Stella Foundation, Silvia Mah has experienced firsthand the difficulties faced by women in deep tech.
“I’ve found, especially in the last two years, an increasing awareness among investors that women are more capital-efficient,” said Mah. “But they aren’t ready to go all-in which is why they might invest in women-led ‘light-tech’ companies to mitigate the risk they unconsciously believe comes with investing in women in deep-tech.
According to Mah, this tactic is off-putting and minimizes the flow of capital into companies led by brilliant deep-tech women scientists and inventors who are helping cancer patients or producing a new diagnosis for endometriosis. “At the junction of impact, an innovative new business model and deep tech, women just don’t get the funding they deserve,” said Mah. “They get the nod of ‘you are amazing’ or ‘very visionary,’ but then ‘we don’t really invest in deep tech’ or ‘we like light tech better.’” Risk mitigation, as well as competing with the predictability and short timeline of light tech, a broad term for technology that isn’t involved in deep tech, like computers or smartphones are two of the many reasons why getting funding is difficult for women in deep tech. Another big reason is the lack of role models. While famous female founders like Estée Lauder and Tory Burch have impacted the fashion, beauty, and lifestyle industries, the same cannot be said of deep tech. There is yet to be a female business mogul within the deep tech industry, which can make it difficult for investors to visualize themselves investing in a woman-led deep tech company.
“There will be a woman mogul in this industry soon,” said Mah, “But they have to break the initial barrier; they are writing the history of what a successful female deep-tech scientist and founder looks like.”
The lack of role models, combined with the small percentage of women already working in this industry, leads to another significant problem: lack of visibility. Many investors don’t know how to look for these companies because they are difficult to find. Investors may not have the time or bandwidth to search for these companies or to create new relationships with them. This lack of visibility can also be internal, where a company may not publicize how many women they employ, or share news of rising women in their organization. Because of this lack of visibility, it becomes difficult for women in deep tech to create community and partnerships with others in the industry. This makes it even more impressive when these companies and individuals become more “visible” to others.
Mah and her firm know they are fighting an uphill battle when trying to support and connect with these women. Mah is investigating the data around the investments of these companies to better understand how the industry can change as a whole. “We need to analyze data to identify the why of the investment thesis of investors who fund female founders in deep tech,” she said. “It’s been hard to find successes, from follow-on funding to acquisitions, but it’s intriguing to look at the research around women startup founders in deep tech that receive VC funding, how they got it, and why now because there is a perfect storm.”
Mah hopes that a better understanding can fight against the biased and difficult system. “Many women are being pushed aside and not championed, especially in the seed to series A rounds,” she added. As many women in deep tech continue to work hard at their jobs, there will be a day when change begins to happen in the industry, making it easier for women to get what they need.
To learn more about what Mah is doing at Stella Impact Capital, visit this link.