Getting To Even – SIX DRAGONFLIES

Even

Under 10% of venture capital funding goes to women, people of color, and underrepresented founders. Six Dragonflies views this as the biggest opportunity in investment.

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The Value of Investing In Female Founders

The business case for funding female founders is simple—female founders outperform their male counterparts. A recent study from Boston Consulting Group evaluated 350 companies that had been part of the MassChallenge program. The study revealed that, for every dollar of investment raised, female-run startups generated 78 cents in revenue, whereas male-run startups generated only 31 cents. As we might expect, women outperformed their male counterparts despite raising less money ($935k versus $2.12M).

Source: Forbes

Why Are Revenue-Based VCs Investing In Women and Underrepresented Founders?

A new wave of reveue-based investors are emerging who are using creative investing structures with some of the upside of traditional VC, but some of the downside protection of debt. These venture capitalists are accomplishing a major social impact goal…without even trying to.

For context, revenue-based investing (“RBI”) is a new form of VC financing, distinct from the preferred equity sturcture most VCs use. RBI normally requires founders to pay back their investors with a fixed percentage of revenue until they have finished providing the investor with a fixed return on capital, which they agree upon in advance.

Source: TechCrunch

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Our vision is to advance women and diverse entrepreneurs… it’s just good business.

Six Dragonflies has invested over $2MM in 32 companies led by women and underrepresented founders. United States private and venture capital investment in female founders are at an all time high. However, the gap is still great. The simple truth is that women have not been raising capital as long as men have, so the industry is intrinsically male dominated. This is where the opportunity to bring men and women together to close the gap lies.

Venture capital investment in all-female founding teams hit $3.3 billion in 2019, representing 2.8% of capital invested across the entire U.S. startup ecosystem this year, according to the latest data collected by PitchBook.

While that number may seem insubstantial, it’s a step up from last year’s total. In 2018, venture capitalists struck 580 deals worth $3 billion — up from just $2.1 billion in 2017 — for all-female teams, or only 2.2% of all U.S. deal activity. So far, female-founded and mixed-gender teams have raised a total of $17.2 billion, as of early December 2019. That’s 11.5% of all venture capital investment, an increase from 10.6% last year, when those groups attracted $17 billion across some 2,000 deals. According to the Crunch Base Diversity Report, over $20B has been invested in female-founded and co-founded startups in 2019 alone.

The future of investing is not just women investing in more women, it’s also men stepping up and funding female founders. At Six Dragonflies, we have built an ecosystem that is inclusive of men and women working together to advance this vision.

Our Portfolio

See the leading companies Six Dragonflies has invested in.