Propel(x)

States with the most venture capital investments in women-led startups

Venture funding in the U.S. reached a record $332.8 billion in 2021, according to the National Venture Capital Association; however, only 2.4% of VC funding went to companies founded by women.

Propel(x) ranked the top 15 states with the most venture capital investments in women-founded or co-founded startups using data from PitchBook. States were ranked based on the total amount of VC funding that went to startups founded by at least one woman since 2018. Additional data points include the total number of VC deals made with startups founded by at least one woman, the percentage of those deals made with startups founded solely by women, and the percentage founded by both men and women.

A quarter of VC deals with startups led by women founders since 2018 went to startups founded solely by women. The other 75% were co-founded by men and women.

Venture capital funding is raised when a startup with growth potential asks investors, investment banks, or VC firms for capital in exchange for equity in the company. As most venture capitalists—those who agree to invest in a company—are men, women founders often face unconscious (or even conscious) biases. 

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#15. Virginia

– VC funding for women-led startups since 2018: $958 million
– Number of deals with women-led startups since 2018: 200
— Share of female and male co-founders: 74.5%
— Share of women-only founders: 25.5%

In 2021, Virginia ranked 14th nationally for the value of venture capital invested in the state. With $2.57 billion in total VC investment, Virginia follows the national trend of investor interest in the software industry. Crunchbase reports 692 women-founded companies with headquarters in Virginia. The state is home to STEAM and cybersecurity education company Chrysallis.AI, which is woman- and disabled-veteran-owned. It’s also the location of the headquarters of Lynk—a company that provides universal mobile broadband via satellites.

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#14. Maryland

– VC funding for women-led startups since 2018: $969 million
– Number of deals with women-led startups since 2018: 191
— Share of female and male co-founders: 75.4%
— Share of women-only founders: 24.6%

There are currently 540 women-founded Maryland-based startups listed on Crunchbase. In the second quarter of 2022, the state bucked the national trend of decreasing VC deals and more than doubled funding for companies in the state. Maryland ranked 16th nationally in total VC funding in 2021, with startups acquiring $2.24 billion in VC funding. Sindano Health is a Software as a Service (SaaS) app focused on LGBT mental health founded by Diversity Equity and Inclusion expert Tara Marshall-Hill. Simpli, with a majority female staff, creates workplace experience apps for companies and landlords.

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#13. Minnesota

– VC funding for women-led startups since 2018: $1.0 billion
– Number of deals with women-led startups since 2018: 154
— Share of female and male co-founders: 68.2%
— Share of women-only founders: 31.8%

Minnesota venture capitalists tend to focus on early-stage companies, and firms like Matchstick Ventures in Minneapolis invest between $500,000 and $1.5 million in startups. Minnesota companies raised $928 million in the first half of 2022, with a noticeable slowdown in deals between April and June. There are 400 women-founded companies in the state ranging from Vanessa Drews’ sweet Cheesecake Funk to haircare company Odele. Support for women business owners in the Land of 10,000 Lakes includes the Women Entrepreneurs of Minnesota. VC firms like the Sofia Fund prioritize women-led companies for angel investing.

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#12. Connecticut

– VC funding for women-led startups since 2018: $1.1 billion
– Number of deals with women-led startups since 2018: 136
— Share of female and male co-founders: 64.7%
— Share of women-only founders: 35.3%

Connecticut is the only state on this list with more than one-third of its female co-founder deals completed with startups founded solely by women. Connecticut is one of nine states the Treasury Department approved for the State Small Business Credit Initiative. The state is slated to receive $119.4 million to launch two new venture capital funds: one supporting entrepreneurs from “underserved and diverse backgrounds,” and a clean energy fund. Successful women-owned businesses in Connecticut include fintech company WealthConductor.

The state government offers education and funding opportunities for female entrepreneurs, and First Lady Annie Lamont co-founded a company called Tidal River to invest in women-founded companies.

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#10. Illinois

– VC funding for women-led startups since 2018: $1.7 billion
– Number of deals with women-led startups since 2018: 371
— Share of female and male co-founders: 72.8%
— Share of women-only founders: 27.2%

PursePower lists nearly 46,000 women-owned businesses in Illinois. In Chicago, a third of roles at VC firms were also held by women in 2021, according to data from Chicago:Blend. One woman-founded firm, Chingona Ventures, focuses on startups founded by women and minorities that often get passed over by traditional VC firms. Entrepreneur found that as of 2020, Genevieve Thiers has received more funding than any other woman founder. The Sittercity founder has secured $48.1 million in investments.

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#10. North Carolina

– VC funding for women-led startups since 2018: $1.7 billion
– Number of deals with women-led startups since 2018: 242
— Share of female and male co-founders: 74.4%
— Share of women-only founders: 25.6%

Nearly 70% of the $3.6 million in VC funds raised in North Carolina in 2021 went to two firms. WRAL TechWire reports that while the general trend is for VCs to hold more capital in reserve, it’s a good time for early-stage startups in North Carolina to raise capital. The University of North Carolina created a toolkit for women- and minority-led businesses seeking funding. The North Carolina Women Business Owners Hall of Fame was launched in 2018 to honor female entrepreneurs across the state. Last year’s inductees included a trucking CEO, an enterprising women’s magazine founder, and a construction company founder.

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#9. Pennsylvania

– VC funding for women-led startups since 2018: $2.0 billion
– Number of deals with women-led startups since 2018: 336
— Share of female and male co-founders: 70.8%
— Share of women-only founders: 29.2%

Pennsylvania is one of nine states receiving small business funding through the State Small Business Credit Initiative. The $267.8 million will be spent on small business loans, underserved VC firms, and early-stage tech investment in the Keystone State. The Pennsylvania Small Business Development Center offers no-cost consulting and business training to entrepreneurs across 15 centers. The state government also provides a Small Diverse Businesses program to help minority and women-owned businesses compete for government contracts. Women-owned businesses in Pennsylvania include medical technology, media, home healthcare, and real estate companies.

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#8. New Jersey

– VC funding for women-led startups since 2018: $2.4 billion
– Number of deals with women-led startups since 2018: 178
— Share of female and male co-founders: 79.8%
— Share of women-only founders: 20.2%

The recently launched New Jersey Innovation Evergreen Fund (NJIEF) is an attempt to funnel even more money into startups in the state through a public-private partnership. New Jersey companies secured $5.5 billion in 219 VC deals in 2021. The NJIEF was created to “address New Jersey’s shortfalls in venture capital funding and create the conditions necessary for entrepreneurs to succeed.” One standout woman-founded company is Kimberly Noonan’s WindMIL, which raised $32.5 million in Series B funding in 2018.

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#7. Florida

– VC funding for women-led startups since 2018: $2.5 billion
– Number of deals with women-led startups since 2018: 398
— Share of female and male co-founders: 74.9%
— Share of women-only founders: 25.1%

With its lack of state income tax and year-round warm weather, Florida is emerging as a business and tech hub. VC firm Andreessen Horowitz recently opened a new office in Miami Beach. Florida has also emerged as a hub for cryptocurrency businesses and hosts the Florida Bitcoin and Blockchain summit. Medical technology is another growing industry. Amy Tseng’s TissueTech, which specializes in regenerative tissue therapies, has raised $110 million in VC funding.

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#6. Colorado

– VC funding for women-led startups since 2018: $2.9 billion
– Number of deals with women-led startups since 2018: 449
— Share of female and male co-founders: 75.5%
— Share of women-only founders: 24.5%

At 10.39%, Colorado has the highest percentage of women-owned businesses in the U.S., according to a 2022 analysis from banking platform NorthOne. It also has the highest percentage (2.37%) of women who own their own incorporated businesses. Colorado companies, ranging from biotech firm Biodesix to software company Palantir, brought in $6.8 billion overall in VC funding in 2021. In the past decade, Denver’s population has grown 19% as business opportunities have increased.

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#5. Washington

– VC funding for women-led startups since 2018: $4.0 billion
– Number of deals with women-led startups since 2018: 556
— Share of female and male co-founders: 77.0%
— Share of women-only founders: 23.0%

Over the last five years, women-led startups in Washington received $481 million in venture capital funding. While 29.9% of businesses in the state are led by a woman, none of Washington’s unicorns (companies valued at over $1 billion) are women-led. The Seattle area has long been considered a tech hub—it’s home to giants such as Microsoft and Amazon. Women-founded companies based in Washington include Skilljar, Unearth Technologies, and Dolly.

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#4. Texas

– VC funding for women-led startups since 2018: $5.6 billion
– Number of deals with women-led startups since 2018: 672
— Share of female and male co-founders: 76.0%
— Share of women-only founders: 24.0%

Texas has a very high startup survival rate of nearly 80%. NorthOne bank ranked Texas as one of the top states for women entrepreneurs and reported that the Lone Star state has 1.4 million women-owned businesses. One of those is Pandata Tech, which was co-founded in 2016 by ​​Jessica Reitmeier and specializes in solutions for processing high volumes of time-sensitive data. The company received a $100,000 grant in May 2022 to participate in a National Geospatial-Intelligence Agency program to explore solutions for cybersecurity risks.

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#3. Massachusetts

– VC funding for women-led startups since 2018: $19.6 billion
– Number of deals with women-led startups since 2018: 1,067
— Share of female and male co-founders: 83.0%
— Share of women-only founders: 17.0%

Home to Harvard and MIT, the Boston area has become an innovation hub and home to many startups. Women-owned businesses in Massachusetts earn more on average than in any other state at $97,000 per year. Massachusetts is home to startups in the education, biotech, and culinary industries. Co-founder Stefania Mallett expects her company, EzCater, to go public in 2023 after pivoting to serving essential workers during pandemic lockdowns.

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#2. New York

– VC funding for women-led startups since 2018: $21.5 billion
– Number of deals with women-led startups since 2018: 2,366
— Share of female and male co-founders: 68.8%
— Share of women-only founders: 31.2%

Even with the high taxes, high cost of real estate, and fierce competition, New York City is still home to more company headquarters than any other American city. The New York City Economic Development Corporation partnered with VCs to start the WE Venture fund for seed and Series A funding to women- and minority-owned enterprises. One WE Venture recipient, Jessica Sobhraj, co-founded Cosynd, a copyright-filing app company. Alfred (personal assistance for renters) and Adafruit (electronics manufacturing) are two other industry disruptors led by women in New York.

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#1. California

– VC funding for women-led startups since 2018: $69.3 billion
– Number of deals with women-led startups since 2018: 5,091
— Share of female and male co-founders: 77.0%
— Share of women-only founders: 23.0%

California has the most women-led businesses in the country. According to the Census, California had 149,927 women-owned companies which employed more than 1.3 million people in 2018. San Francisco-based MycoWorks makes vegan leather from fungus and was co-founded by Sofia Wang. The company raised $125 million in Series C funding in January, which is being used to open a production plant in South Carolina. Other women-founded companies in the state include Jessica Alba’s The Honest Company and Therese Tucker’s BlackLine.

This story originally appeared on Propel(x) and was produced and
distributed in partnership with Stacker Studio.