2021 Glaring Gap Report

Introduction

We launched the Glaring Gap Report in 2020 to understand the discrepancy between women and men in their participation in founding tech startups, raising investment to scale tech startups, and investing in tech startups across Florida. In this latest report, COVID-19 looms large in our assessment of the state of entrepreneurship for women in Florida. While Florida logged a year-over-year decrease in the number of women founders launching startups in Florida, the same time period saw a significant increase in the number of women participating in startup investing across the state.

About the Data

The data in this report primarily reflects 2020 with one exception. The data from Embarc Collective’s State of Entrepreneurship in Florida reflects the 2021 milestones, challenges, and needs of women startup founders across the state.

What has changed since our 2020 Report?

• 18% of new startups in Florida have a woman founder, down from 23% in 2019.
• Women founders have identified access to talent as their key need when building their businesses followed by access to capital
• The proportion of venture capital funding going to women-founded companies is up nominally year-over-year from 7% to 8%. However, this proportion still trails 3 points behind the national average.
• There has been a marked growth in the number of women involved with venture investing in Florida – there was a 36% increase in the number of women at Florida-based investment firms in 2021. However, Florida still lags the national average with the percentage of women partners at venture funds (21% Florida v. 36% National).

As the data shows, the Glaring Gap between women and men in startup venture creation and investing continues to be apparent. Accordingly, Embarc Collective is providing training to women interested in startup investing via our second annual Embarc Collective Glaring Gap Summit, powered by JPMorgan Chase. This 3-day virtual summit in November 2021 provides intensive training to 50 Florida women on how to conduct their own due diligence process to evaluate startup investment opportunities.

To participate in the 2021 Glaring Gap Summit, please complete this form by October 27, 2021.

The State of Florida’s Women-Founded Startups

About the Data

We looked at Crunchbase data to measure the number of Florida startups founded in the last decade (2011 through 2020) and limited the results to companies for which Crunchbase had data about the founding team, resulting in 2,675 startups. We also included all early-stage funding rounds for those companies that occurred within the same timeframe. In this context “early-stage rounds” refer to rounds that are listed on Crunchbase as being Angel, Pre-Seed, Seed, Equity Crowdfunding, Convertible Notes, Series A through Series C, or Venture – Series Unknown.

Key Changes From 2019 to 2020

In 2020, across the United States, 17% of newly formed startups were founded by women. In Florida, we saw 76 new startups emerge in 2020. Of those new companies, 18% were led by women, which is a decrease in the percentage of new women founders in Florida from 2019 (23%).

As we identified in our 2020 report, we are experiencing a trend nationally where fewer startups are being founded overall. And while this report does not explore the possible causes for this, it’s notable that the continued decline correlates with the timing of the COVID-19 pandemic.

Funding Rounds and Capital Raised for Women Founders in Florida

According to a 2018 study by BCG, “…businesses founded by women ultimately deliver higher revenue—more than twice as much per dollar invested—than those founded by men, making women-owned companies better investments for financial backers.”

Across the country, 11% of total venture funding went to women-led startups in 2020 across 4,409 funding rounds, representing 19% of funding rounds nationwide. In Florida, 8% of venture funding went to women-led startups in 2020 across 92 funding rounds, representing 15% of overall Florida funding rounds. This is a slight increase from the 7.2% of venture funding allocated to Florida women founders in 2019.

Regional Comparison

We compared the total amount of funding for women-led companies in the largest regions in Florida (Miami, Tampa Bay, Orlando, Jacksonville) to metros across the United States. Tampa Bay and Miami ranked below Minneapolis, Baltimore, Denver, Portland, and Nashville.

Founders to Watch

Startup Challenges and Needs

As part of our annual 2021 State of Entrepreneurship in Florida Survey (formerly known as the Embarc Collective Community Survey), we garnered more insight into the milestones, challenges, and needs of women startup founders across the state.

About the Data

The 2021 State of Entrepreneurship in Florida Survey asked founders and startup team members about their upcoming business milestones, challenges, and greatest support needs. This year, we also included questions to understand the impact of the COVID-19 pandemic on their businesses. When we asked about gender in Embarc Collective’s State of Entrepreneurship in Florida, we offered the following descriptors: woman, man, genderqueer/non-binary, or prefer not to disclose. Of the 72 founder and startup team member respondents, 19 identified as women, and 53 identified as men.

Upcoming Milestones

We asked respondents to select the upcoming milestones for their businesses. Respondents were able to select any milestones that were relevant to them, rather than force rank the options. Over 40% of women indicated that building & growing a team, building a repeatable sales process, expanding to a new market/vertical, and fundraising were critical upcoming milestones for their ventures. Of the men responding, the only milestones that ranked above the 40% threshold were building & growing a team and building a repeatable sales process.

Challenges While Building

Similar to last year, access to capital (42%) was a common challenge expressed by women founders. This year, however, finding talent (21%) joined the list as an additional challenge experienced while building. In comparison, most men still responded that their top challenge was related to building a business in a smaller market. The specific challenges were around perceptions of Florida as a vacation destination, lack of density, and difficulty competing with Silicon Valley.

Supporting Women Founders

We asked respondents what types of programs and services they were most in need of to help them build their business.

In our previous study, women respondents indicated that access to capital was the most needed area of support; however, in 2021 we saw that access to talent (63%) spiked as the key identified need.

The Impact of COVID-19

As we approach two years into the COVID-19 pandemic, we now have data available allowing us to observe the ways in which the pandemic has impacted women-led Florida startups.

About the Data

We leveraged data from the 2021 State of Entrepreneurship in Florida Survey as well as the GEM Babson 2020/2021 Study to inform this section. When referring to “pre-pandemic” in the State of Entrepreneurship in Florida Survey, respondents were asked to use January 2020 as a reference point.

The Impact of Starting a Business

While there has been an overall decrease in venture formation in the last year, for some, the pandemic may have been a trigger to build a business. According to the GEM 2020/2021 Study: “While many individuals may have been deterred or delayed in starting a business…21% of those surveyed said they knew at least one person who started a business as a result of COVID-19.”

The Impact on Growing a Business

We asked 2021 State of Entrepreneurship in Florida survey respondents the status of their revenue today compared to January 2020. 58% of women respondents indicated that their revenue has increased since before the pandemic, compared to 73% of men. 17% of women stated that their revenue has stayed the same since before the pandemic, compared to 14% of men. Finally, 17% of women said that their revenue has decreased since before the pandemic, compared to just 2% of men.

The Impact on Teams

To understand the pandemic’s impact on teams, we asked about changes in team size and changes in work setup. The majority of respondents, women and men, noted that their team size is now the same as or has increased from their size before the pandemic.

According to a 2019 study by Kauffman Fellows, “startups with at least 1 female founder hire 2.5x more women” than all-men founding teams.

The pandemic is impacting where we work. All women founder respondents noted that their teams were either working remotely (58%) or operating in a hybrid set-up (42%), with 0% back to fully in-person settings. Men founder respondents, on the other hand, reported 10% had their teams back in a fully in-person setting at the time of completing the survey, with the balance identified as remote (56%) or hybrid (27%).

Receiving COVID-19 Financial Support

There was a disparity between women and men respondents in regards to accessing COVID-19-related assistance such as PPP and EIDL loans, grants, and other sources. 75% of women respondents did not access any support, while 51% of men did not. Of those that did access COVID-19 related assistance, 92% of respondents (men and women) accessed PPP & EIDL funds.

Startup Investors in Florida

About the Data

We leveraged the Embarc Collective Florida Women Investor Database to assess the number of women involved with Florida-based venture capital firms and making investments into Florida-based startups in addition to data from All Raise.

Improvement in Florida

Last year we identified 28 women that were in investment-related roles within Florida venture funds. In just one year, that number jumped to 38 women, representing a 36% increase.

Women Partners at Florida-Based Firms

According to All Raise, 36% of venture funds across the United States had at least one woman partner in 2020. Florida has 69 institutional venture firms, of which 15 firms have one or more woman partners (21%). While Florida still lags in promoting women into partner roles within venture, we are seeing more women be employed by venture funds.

# Women Partners in Florida Venture Capital, 2020 v 2021: For this analysis, we included the following titles – Partner, Founding Partner, Managing Partner, General Partner

What about the Angel Investors?

Our database specifically focused on women involved in institutional investing, so we did not collect the data needed to assess the level of participation of Florida-based women angel investors. We are, however, actively training women interested in startup investing through the Embarc Collective Glaring Gap Summit, powered by JP Morgan Chase, with a goal in part of increasing the number of women angel investors in Florida.

Database of Known Founders and Investors in Florida

In 2020, we released a list of known women founders and investors in Florida. This report includes an updated 2021 database. We hope that this list allows women and men to seek out women investors for their cap tables, for investors to diligence women-led startups, and for all Florida startup community events to include a diverse set of voices.

Florida Directory of Women Investors & Founders

We welcome additions from the community – if you would like to add an investor or add a founder, please do so.

What’s Next

HBR notes that “When women venture capitalists do make the decisions, they’re twice as likely to invest in female founding teams.”

This is why, with the support of JP Morgan Chase, Embarc Collective launched the Glaring Gap Summit in 2020. We believe that if more women in Florida participate in startup funding opportunities, more women founders in Florida will get funded and will be successful in their ventures, reducing the Glaring Gap that we see between women and men in tech entrepreneurship.

The 2020 Embarc Collective’s Glaring Gap Summit brought together 50 Florida-based women to learn the principles of startup investing. We heard resounding feedback on the quality of our program from the participants:

“The Glaring Gap Summit was one of the most incredible experiences of my life. I’ve always been interested in investing, but I’ve felt shut out in education and gateways to learning about it. In the Summit, we were treated to the top experts in the field and an A+ curriculum on how to invest.”

This year we will bring back our line-up of seasoned keynote speakers and curriculum over three virtual sessions led by Angela Lee, Professor of VC at Columbia Business School and Founder at 37 Angels. To participate in the 2021 Glaring Gap Summit, please complete this form by October 27, 2021.

Thank You

Thank you to JPMorgan Chase for its support of building inclusive entrepreneurship in Florida, and specifically for supporting the development of the Glaring Gap Report & Summit.