Report: Anti-DEI Sentiment Could Harm Female Founders
Although female founders in the U.S. raised nearly $39 billion last year — a 27 percent bump over 2023 — women entrepreneurs could see VC funding plummet in 2025 due to growing anti-DEI attitudes. That’s one key finding from All In: Female Founders in the VC Ecosystem, a recently released report from PitchBook.
According to the report, many of the usual “entry points” that have provided female founders access to funding in the past — including funds created specifically to help underrepresented founders — may become inaccessible due to potential legal squabbles sparked by new Trump administration policies.
Even though female founders will “undoubtedly continue to innovate and raise new capital in the year to come,” says Pitchbook, until a legal precedent is determined, “a more even demographic split for VC investment remains farther on the horizon.”
A halt in funding for women founders is unfortunate because women entrepreneurs have been slowly making strides in recent years. After all, female founders secured $38.8 billion last year while securing more than 24 percent of the U.S. VC exit count. Overall, 2024 was also the third most successful year for women founders seeking capital. “Those operating in select software and healthcare subsectors saw substantial funding momentum,” according to Pitchbook’s report. “The number of newly minted unicorns rose materially as 13 female-founded companies crossed the coveted $1 billion valuation threshold.”
Yet, despite these advancements, Pitchbook determined that overall funding has been “uneven” for women seeking support for their entrepreneurial efforts. “Female founders took home a smaller share of the country’s total VC deal activity in 2024. Their share of deal value … declined by less than a percentage point to just below 20 percent. Their share of total deal count declined for the third year in a row to its lowest level since 2018 but remained above the 25 percent threshold,” says PitchBook.
In other words, although female founders in the U.S. collectively raised almost $39 billion, their overall share of 2024 funding was down year over year. Now, a wave of anti-DEI sentiment has the potential to create additional setbacks for women.
The Trump administration has demanded that DEI initiatives be removed from federal programs. This, in turn, has caused many private-sector organizations — especially, one assumes, those hoping to curry favor inside the Beltway — to tone down or even eliminate their DEI policies.
As a result, VCs may be less likely to support female-founded startups, making an already uneven playing field even more lopsided. These findings come at an odd time: last week marked International Women's Day and March is Women's History Month.
Now is a good time to remember that women seeking equity continue to struggle, even though data shows companies with women in leadership roles perform better than those without. Further reducing the financial resources available to women entrepreneurs in the name of “anti-DEI” sentiment may help some VCs score political points in the short term. But in the long run, it will likely lead to even greater disparity — and less innovation — in the world of startups.
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