Study gives female tech founders a boost

Report finds women produce larger returns on investments than men

Women are still relatively scarce in the tech industry, the percentage of female founders in firms funded with venture capital has stagnated in recent years and now a new report delivers some bad news about the amount of early-stage money female founders can raise from VC firms.

But there’s a silver lining, or maybe a golden one.

It turns out that although female business owners pitching to investors receive an average of $1 million less than men, they do a much better job than male owners at spinning that funding into gold, according to the report.

“Businesses founded by women ultimately deliver higher revenue — more than twice as much per dollar invested — than those founded by men, making women-owned companies better investments for financial backers,” said the Boston Consulting Group report.

“In terms of how effectively companies turn a dollar of investment into a dollar of revenue, startups founded and co-founded by women are significantly better financial investments.

“Businesses founded by women ultimately deliver higher revenue — more than twice as much per dollar invested — than those founded by men.” — Boston Consulting Group report

“For every dollar of funding, these startups generated 78 cents, while male-founded startups generated less

than half that — just 31 cents. Our findings have clear implications for investors, startup accelerators, and women entrepreneurs seeking backers.”

The consulting firm worked with business accelerator MassChallenge, reviewing five years of investment and revenue data gathered from accelerator clients.

Investors in companies founded or co-founded by women provided an average of $935,000, less than half the average $2.1 million invested in male-founded companies,

the report said.

However, the female-founded startups “performed better over time,” producing 10 percent more cumulative revenue over five years — an average of $730,000, compared to male-founded companies’ $662,000, according to the report.

The findings, if taken to heart by investors and female entrepreneurs, could lead to upward movement in the share of venture-backed companies with female founders, which plateaued at around 17 percent in 2012 with no real change through last year, according to TechCrunch.