Female Founders Feel Gender Is Holding Them Back More Than Ever

January Ventures 2022 report revealed interesting information. For the fourth year in a row, January Ventures surveyed early-stage startup founders, managing to get a sample set of 450 founders in the US and Europe. The surveys revealed the need for cash, but they also unveiled a shocking reversal where female founders believe their gender is holding them back more than before.

The report took data from between August and October 2022. Among the participating founders, 48% raised pre-seed funding, 32% raised seed funding, and 16% had yet to raise funding. Additionally, 48% identified as women, and 54% identified as BIPOC.

• It was one of the largest and wide-ranging surveys involving early-stage founders.
• The economic conditions presented different results than expected, including surprising data about female founders.

Early-stage startups stand out from the crowd. Only around 4% of pre-seed and seed-stage startups are laying off employees, and only 12% are looking to decrease their hiring plans, despite the economy. Moreover, a large majority of 85% have remained remote, while big tech companies have mostly returned to offices.

Things have changed since 2020. While remote work has remained steady in startups since the pandemic, their efforts to cut costs have not. Instead, far fewer early-stage startups have cut costs than in 2020. Numbers declined from 81% taking quick action to cut costs in 2020 to only 34% moving quickly in 2022.

• The report states that only 15% of startups expect economic conditions to reduce revenue.
• More people, at 48%, do not expect any impact or believe their revenue will increase.

Female founders believe their gender is holding them back. Female founders have been making progress, though it seems slow some days. However, perceptions about how gender affects success have changed over the four years January Ventures performed the survey.

In 2019, 55% of female founders believed their gender held them back. That number reduced to around 50% in 2020, moving in a positive direction. However, in 2021, it sharply rose to 60%, followed by a further increase this year to 70%. More than ever, female founders feel held back by their gender, which is a turn in the wrong direction.

Burnout is higher in female founders than in males. Perhaps because they feel like their gender is hampering success, female founders are experiencing more burnout than men. Female founders reported burnout 34% of the time, while male founders only reported burnout 20% of the time.

The investment environment is changing, and it might affect female founders more. Startups with female founders have always received less funding, and there is a chance things are getting worse now that there is less money to go around.

• Around 43% of entrepreneurs believe investors are slowing down their investment pace.
• At the same time, 38% think investors are funding people they know.

Time is a luxury most of these startups do not have. Regardless of whether the founder is male or female, most startups do not have much money remaining. In fact, as many as 81% reported having 12 months or less in funding. It is particularly concerning for female founders, who have less access to funding overall.