DocSend’s 2024 Funding Divide Report: The gap for underrepresented founders widens

In our fifth year tracking these biases, we found that historically underrepresented founders were hit hardest by the fundraising market slowdown.

In the midst of a challenging startup ecosystem, DocSend’s fifth annual Funding Divide report uncovers alarming trends in early-stage fundraising for underrepresented founders. The report, based on data gathered in 2023, highlights the growing disparities faced by minority and female-led startups in securing crucial capital.

2024 Funding Divide Report

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The impact of the downturn on underrepresented founders

As venture capital funding slowed to its lowest levels since 2018, historically underrepresented founders bore the brunt of the downturn. Despite their potential for outperformance, these founders fell further behind their peers in 2023. DocSend’s data reveals that while most teams, regardless of demographics, experienced fewer investor meetings and raised less funding compared to 2022, underrepresented teams faced even greater hurdles.

Victoria Yampolsky, founder of The Startup Station, explains, “This trend is a natural result of (often male) investors looking to move away from perceived risks in a more difficult investing climate.”

Widening gender and racial disparities

The gap in dollars raised between all-female and all-male teams widened for the second consecutive year. All-female teams with minority members saw the most significant increase in fundraising times while securing the least amount of capital among all demographics. On average, all-female teams raised 43% less than their all-male counterparts, while diverse teams raised 26% less than all-white teams.

Discrepancies in investor attention

The report also uncovered discrepancies in investor attention to pitch decks based on team demographics. VCs spent 66% more time on all-female team sections compared to all-male team slides and 30% more than the overall average for this section. However, all-male fundraising ask sections received 25% more time than all-female sections.

The path forward

As the startup community stands at an inflection point, with recent surges in public and private-market optimism, the question remains: will underrepresented founders be the slowest to feel the turnaround?

Jeremy Au from Orvel Ventures advises, “Investors should dig deeper into teams that show promise but who don’t come from backgrounds that immediately code for venture investment. This strategy does justice to diverse founders and is also key for investors to gain a competitive edge and work with founders who may be overlooked by other VCs.”

By highlighting the discrepancies in fundraising outcomes and investor attention, DocSend aims to drive meaningful change and foster a more inclusive startup ecosystem. To gain deeper insights into the state of early-stage fundraising for underrepresented founders, read DocSend’s 2024 Funding Divide Report today. 

Together, we can work toward ensuring equal opportunities for all entrepreneurs.