Seven months ago, our lives were disrupted by the COVID-19 pandemic. Today, we have clear evidence that the brunt of its economic impact in the United States has been borne by women.
Last month, 865,000 women left the workforce – four times more than the equivalent number of men. Venture funding for women-founded companies has historically been abysmal, at less than 3% of all venture capital invested. Last quarter, it dropped to a three year low. To cap this grim picture, new insights from our community suggest that the pandemic is also affecting women’s likelihood to start new companies this year.
In September, our team surveyed a diverse group of professional women and non-binary individuals with high likelihood of having entrepreneurial aspirations, including 38% people of color and 5% who use they/them pronouns. Before the pandemic, 87% were somewhat or highly likely to start a company. Six months later, 51% of them have delayed or scrapped these plans, while 16% accelerated them, starting a company before they were planning to.
We won’t know the net effect of these two groups – those who postponed and those who accelerated their startup plans – until macroeconomic data is released detailing new company formation in 2020. In the meantime, the picture that emerges is not one of a stalled pipeline of women and non-binary founded companies. Rather it’s one of accentuated privilege, where those who can afford to live without a paycheck are the ones most likely to become entrepreneurs. It makes entrepreneurship even less accessible. This is not a new problem, and it affects immigrants, people of color, and anyone from an underprivileged background most substantially.
To delve into our full findings, download the report here.