FORTUNE DECEMBER 2020 /JANUARY 2021 95

have the power to fire or protect them.

Female founder-CEOs run only 4% of the “unicorn” startups

valued at more than $1 billion, according to Crunchbase. Which

means that, proportionally, these successful venture-backed female

founders are even more rare than female Fortune 500 CEOs, who

currently run 7.4% of the country’s largest companies.

The pandemic, which has created an economic catastrophe for

women writ large, has made this challenging situation still more

difficult. In October, data firm PitchBook reported that VC funding

for companies founded by women dropped to $434 million in the

third quarter, its lowest level in three years—and about 1% of the

$37.8 billion invested in all startups during the same period.

Investors and entrepreneurs say the current global uncertainty

has reinforced the insular, pattern-matching nature of venture

capital, in which 88% of those making investing decisions are male

and male-founded companies are seen as the default “safe” bet. “In

a time of stress, there are people who are just falling back to pattern

recognition and their standard operating behavior” of investing in

male founders, says Pam Kostka, a veteran Silicon Valley executive

who now runs All Raise, a nonprofit devoted to female VCs and

founders.

These trends, married with the cascade of high-profile founder

ousters, are fueling a growing debate among startup industry

insiders over whether female founders are facing a backlash—one

that makes them more subject to public scrutiny and, ultimately,

more likely to be forced out of their companies than their male

counterparts.

“There’s absolutely a double standard for women,” says

Alex West Steinman, the cofounder and CEO of the Coven, a

Minneapolis-based women’s coworking startup. “We do walk around

with a target on our backs, and people are looking for us to fail.”

There’s copious social science research—and widespread real-world

experience—that agrees. Women in the business world face what’s

been dubbed the “double bind,” which penalizes them for “unfemi-

nine” behaviors that are expected and often applauded in male

leaders. One 2007 study by New York University researchers found

that when two managers were described using identical personality

traits but different genders, “women are decidedly more disliked”

and “are found to be less desirable as bosses.” Where male leaders

are seen as strong, determined, and decisive, women who behave

the same way are judged to be aggressive, abrasive, or strident.

Still, not everyone sees a gender backlash at startups. “Being

a founder is so hard, but the playing field felt relatively fair,” says

Alexa von Tobel, who at age 31 sold her financial planning startup,

bigger and more disconcerting than the usual

game of startup musical chairs. “There are

very few women leaders who rise to the level

where they get press and attention, and at

some point, they’re all disappearing,” says Sara

Mauskopf, the cofounder and CEO of Winnie,

a San Francisco-based childcare platform that

has raised $15.5 million. Throw in a slew of

other female founders who remain atop their

companies but who have faced pointed scrutiny

of their management styles and cultures—in-

cluding the CEOs of skin care startup Glossier,

retailer Rent the Runway, dating app Bumble,

and lingerie company ThirdLove—and it’s hard

not to wonder, as Mauskopf does: “What the

heck is going on? And why is this only hap-

pening to women?”

T

O UNDERSTAND the alarm

expressed by Mauskopf and

many of the 24 other found-

ers, investors, executives, and

startup employees who spoke

to Fortune for this story, it

helps to start with a big-picture view of the

state of women-led startups. Female found-

ers have a track record of success—one 2018

BCG study found that women-owned busi-

nesses earn twice as much revenue per dollar

invested as male-owned businesses do—but

the overwhelming majority of investors shun

them. Women-only founding teams received

only 2.6% of all venture capital invested in

startups in 2019, with Black women histori-

cally receiving less than 0.1%. Women who

do get funding raise about a third of the

amount that men do, on average, and are less

likely to raise subsequent rounds. They also

retain less equity in their companies, thus

ceding more control to the investors who

What the heck is going on?

And why is this only

happening to women?”

• OFOUNDER AND CEO, WINNIEC

2.6

SHARE OF TOTAL VC DOLLARS

GOING TO COMPANIES WITH

ALL-FEMALE FOUNDING TEAMS

Startups led by Black women receive just

0 .1% of all venture funding.

SARA MAUSKOPF

%

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