Venture capital funds led by women are boosting funding for women-owned startups.

• The number of women-founded companies receiving venture capital funding in the U.S. has been increasing in recent years.
• Last year, venture funds worldwide raised $107 billion, and women-led funds' share of total fundraising increased to approximately 3%.
• Individuals with incomes of at least $200,000 or over $1 million in net worth, minus their primary residence, are typically accredited investors in startups in the U.S.

Women are increasingly investing in startups founded by women.

Although the fundraising environment was challenging in 2023, women-led venture capital funds experienced growth. Research by Venture Capital Journal found that the share of women-led funds in total fundraising increased to approximately 3% of the $107 billion raised worldwide by venture funds in 2023, up from less than 2% in 2022.

The number of women-founded companies receiving venture capital funding in the U.S. has been steadily increasing in recent years, thanks to the establishment of women's incubators, the emergence of new female-led companies, and an increased focus on investing in underrepresented founders.

Trish Costello, founder and CEO of Portfolia, stated that women in the U.S. have unprecedented access to wealth, with about $25 trillion in wealth and approaching 50% ownership of all wealth. She emphasized that this wealth is a powerful tool if used wisely.

Portfolia offers 16 venture funds specifically for individual investors interested in investing in a diverse portfolio of women-led startups and gaining knowledge on venture capital investing. The company has invested in over 140 companies, with a majority of them founded by women.

Costello stated that it's crucial to invest in companies that will improve our lives and give us profits.

Approximately 25% of the firm's portfolio is led by men and focuses on solving problems for women, including a male-led company, YourChoice Therapeutics, which is developing a birth control pill for men.

How one startup benefited from women investors

Dr. Elizabeth Clayborne, an emergency physician and mother of two, founded NasaClip, a device that stops nosebleeds, after recognizing the need for a hands-free first-aid solution.

She stated that her company has generated revenue after raising $3.25 million in funding from women investors over the past four years, which allowed her to bring the product to market.

""Female investors not only provide capital but also introduce the social network necessary for success, as Clayborne stated. As she explained, her early belief in her venture was crucial to its success," said Clayborne."

Opportunities for women-focused venture capital

A decade ago, Costello's aspiration to establish a women-centric venture capital firm was sparked by a male colleague's assertion that men wouldn't invest in women's health concerns due to the "ick factor."

Costello stated that he discovered a profitable investment area and women were comfortable investing in it.

Portfolia's first fund was launched in 2015 with the goal of training the next generation of venture capitalists. Its fund managers make the investment decisions, but investors are invited to pitch meetings and due diligence to ask questions of entrepreneurs and offer insights.

Costello stated that the purpose of all our actions is to leverage our communities, knowledge, and expertise to contribute to the success of the company through investment.

To invest in Portfolia funds, individuals must be accredited as defined by the U.S. Securities and Exchange Commission, which means having a net worth over $1 million, excluding a primary residence, or income over $200,000 a year ($300,000 for a married couple) for the last two years and a reasonable expectation of earning the same for the current year.

Each Portfolia fund invests in 10 to 12 companies, with a minimum investment of $10,000 and a maximum investment of $500,000. The average investment is $35,000.

Costello stated that we allowed them to test the waters and experience what venture investing entails.

Women-owned startups have the potential to deliver twice as much per dollar as men, making venture investing in these companies a high-risk, high-reward opportunity.

High-risk investments can take several years to generate any return, and many startups fail. Therefore, financial advisors typically recommend no more than 10% of a client's assets in such investments.

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