By Judy Obae
- More female investors are now backing women-led businesses, which are projected to make up 46.3% of those seeking funding in 2024
- Despite a drop in overall U.S. angel investment, women’s share in this market rose to 46.7% in 2023
Amid the hurdles and slow rebound from the 2021 highs, a notable and steady expansion has occurred in one segment of the venture capital market: The involvement of female angel investors. Data from the University of New Hampshire’s Center for Venture Research reveals that the presence of women in angel investing has been on a consistent upward trajectory over the past three years who now represent nearly 50% of the angel investing community. This indicates a major change in an area traditionally dominated by men.
Why This Matters: Although total angel investment in U.S. startups has declined—from $22.3 billion in 2022 to $18.6 billion in 2023—the proportion of female angel investors has grown steadily. In 2023, women accounted for 46.7% of the angel investing market, up significantly from 39.5% in 2022 and 33.6% in 2021. This indicates that more women are embracing the role of angel investors, introducing fresh perspectives and priorities into the venture capital scene. This growing involvement of female investors is more than just a demographic change; it’s also influencing the types of companies securing funding. Women-led businesses, which previously faced challenges in obtaining investment, are now making notable progress. In 2024, it’s projected that these companies will make up 46.3% of those seeking angel funding, an increase from 37.1% in 2023 and 28.6% in 2021. This trend highlights a broader shift toward greater inclusivity and diversity within the startup community.
As more women take on roles as angel investors and global venture capital expected to reach $468.4 billion by 2024, they are likely to back businesses led by other women, fostering a cycle that further boosts female entrepreneurship. Additionally, angel investments are playing an increasingly important role in job creation within the startup ecosystem. In 2023, each angel investment generated 4.3 jobs on average, up from 3.4 jobs per investment in 2022. The numbers reflect this momentum: women-owned startups receiving angel funding increased from 5% in 2015 to 21% by 2018.
Situational Awareness: The growing presence of female angel investors is transforming the venture capital sector, promoting increased diversity and inclusion. This development is not only benefiting women-led startups but also motivating more women to engage in the startup arena. As this trend progresses, it is essential for stakeholders to grasp its potential effects on the future of venture capital and the wider startup environment. With women taking on more leadership roles, the venture capital industry is set to become more diverse and exciting.
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