Last night at AppNexus, Women Innovate Mobile (with a whole lot of help) held our first Behind The Pitch event. Our belief is that if we want to change the funding landscape, we need to fund women founders, earlier. Early being pre-angel, pre-seed, somewhere after idea. Behind The Pitch fits within WIM’s accelerator philosophy of actively connecting our entrepreneurs with resources and information, to each other and with the larger community. Behind The pitch was created around content (information on funding), education (how to pitch) and connecting into WIM’s community. As anyone who knows us, from our launch (and leading to our launch) we built a connected diverse community of entrepreneurs, investors and advisors who are supporting and creating opportunities for each other. Our community connects around content and we’ve held 20+ events since launching, from our founder’s breakfasts to our Meet the Innovators speaker series in partnership with Apple to Behind The Pitch.
Behind The Pitch came together because of our connected community, so a huge thank you to sponsor’s AppNexus, Lowenstein Sandler, American Airlines, Silicon Valley Bank, Pitchbook, .CO Internet, TriNet and Grind Workspaces. To Behind The Pitch Media partners Xconomy, AlleyWatch and Startup One Stop. We are indebted to partners in startup crime, Third Wave Fashion and NY Tech Women. And we are fueled by a community of support from Entrepreneurs Roundtable Accelerator, Dreamit Ventures, Incubate NY, Digital Undivided, Women in Wireless, TiE New York, Golden Seeds, NY Angels, Astia, Springboard, Tow Knight Center for Entrepreneurial Journalism, Pipeline Fellowship, Songza and Food + Tech Connect. And a massive personal note of thanks to Microsoft’s Tereza Nemessanyi for joining us last night and supporting women entrepreneurs.
So what did we talk about last night - (before hearing from Songza, Nail Your Mortgage (exit to JP Morgan Chase) and Take the Interview on their fundraises, from Liza Kindred at Third Wave Fashion on the state of fashion tech from the world’s first fashion tech database and then pitches from 4 startups (who applied, were screened online then pre-screened a week before the event and selected from the shortlist to pitch last night) The Edge in Education, Citizen Made, Modalyst, Wedding Republic) - oh, just a little information on the realities, the tough realities on raising money.
Here are the stats and facts.
Every third startup wants to raise money from VCs. VC Investment in 2012 (depending on who you ask) was:
- Pitchbook: $27.8 billion invested in 3417 companies
- CB Insights: $28.3 billion invested in 3267 companies
- NVCA: $26.7 billion invested in 3154 companies
And the trend of those big numbers? According to Dow Jones Venture Source: VC Investment down for the last 3 straight quarters. Yes, $26/$27/$28B trending down.
As for the women run companies….according to a recent US Small Business Administration study: Venture Capital firms tend to invest with familiar social networks that may not include women entrepreneurs. Here’s the story the numbers (from Pitchbook) tell on % of deals investing in women run companies:
- In 2012 10% of the deals and 7% of the capital went to women run companies
- In Q1 2013 12% of the deals and 9% of the capital went to women run compnies
ONLY 1,174 new companies received VC funding in 2012 (NVCA). Let’s repeat that number: 1, 174. Note: 2012 included the massive first financings for Warp Drive Bio ($125M) and GitHub ($99.5M).
First time female founder? According to figures from Pitchbook – % of all first financings going to women-founded companies:
- % of deals going to women 14% (in both 2012 and Q1 2013)
- % of capital going to women 12% in 2012 and 19% Q1 2013
Location. Location. Location. In 2012, 53% of all investment dollars went to California-based portfolio companies. 2012 saw investment in a record number of states (48 plus DC). Wyoming and Alaska are the only states out of the VC game. Most active regions for women founded companies are the Northeast and West Coast.
Who are the top VC investors….again, depends on who you ask (and whether they consider investment via convertible note). According to CB Insights, in 2012 the top 5 were:
- New Enterprise Associates (NEA)
- Kleiner Perkins
- Google Ventures
- Andreessen Horowitz
- First Round (37 New Investments/$23.1M and 66 Follow-ons/$801.4M)
In Q1 2013 (Dow Jones Venture Source) NEA was the most active investor with 22 deals, followed by 500 Startups, Andreessen Horowitz, Y Combinator and Greylock Partners.
And the women in VC? Yes, there is a small number out there. From Pitchbook – deals with women VC leads in 2012:
- 5% of the deals led by women
- 9% of capital invested in deals led by women
But enough about the VCs. Angels continue to play an important role for funding startups. A really important role! From the 2012 Halo Report:
- 63% of Angel group deals were in companies with revenue
- 56% of Angel group deals were in new companies
- Most active Angel group in 2012: New York Angels
The Halo Report also shows angel investing for the year was stable with prior years. Pre money valuations for early-stage companies remained steady at $2.5M mobile and telecom companies gaining share of angel investment deals and dollars, while healthcare companies are losing share of angel investments.
From the Center for Venture Research….131,145 active angel investors and 40% angel investment in seed & startup phase. Angel/Seed rounds expanded to 24% of VC deals in 2012 - $793.4 million invested in 2012. Women angels represented 21.8% of all angels based on Q1/Q2 data (let’s see if this upward trend continues). The 5th largest and most active angel group in the U.S., Golden Seeds has invested $50 million in women run companies. In 2012 Golden Seeds made 13 investments (after considering 348 applications).
And quickly on corporate acquisitions in 2012, the highlights (from CB Insights):
- Yammer ($1.2 billion/Microsoft)
- Instagram ($715 million/Facebook)
- Buddy Media ($689 million /Salesforce – largest VC acquisition outside of California)
There was more than a Facebook IPO…45 VC backed IPOs in 2012. And depending on who you ask…8 or 9 VC backed IPOs first quarter 2013. There have been 77 venture backed M&A deals reported in first quarter 2013 (including TripAdvisor (Nasdaq: TRIP) acquiring Jetsetter from Gilt Groupe).
Till the next #BehindThePitch…(or join us for Meet The Innovators on May 15 when we’ll be discussing funding, fundraising and funders with 5 VCs).