Only 4% of startups valued at $1 billion or more in 2019 were founded by women, marking a bigger problem that Silicon Valley cares to admit

• In its annual startups report, Crunchbase found that just 5 startups valued at $1 billion or more in 2019 were founded by women, and only 16 had a female cofounder.
• The other 108 startups were founded by men or all-male teams.
• Although the report is yet another example of how Silicon Valley continues to lag behind gender parity in pay, wealth creation, and equity, some founders and investors said it's helpful to know where the industry stands so that it can progress.
• The wealth creation or equity gap is discussed much less than the hiring and pay gaps, but many founders say it could be more important because that's the ticket to board rooms and venture firms, which then perpetuate the other disparities in the industry.
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Although female founders were on track to receive record investment this year, only a few were able to break the $1 billion glass ceiling.

Of the 128 startups that achieved a valuation of $1 billion or higher in 2019, just five of them, about 4%, were founded by all-female teams, according to Crunchbase's annual startups report out Wednesday. Sixteen had at least one female cofounder, the report stated, and the remaining 108 were founded by all-male teams.

Some VCs see the unicorn status of this handful of female-led startups as half-full.

"What I love about the female-founded unicorns that have emerged this year is what incredible role models they are for the entrepreneurs of tomorrow. From Rent the Runway to Glossier, these founders are setting examples that will inspire the next generation," Inspired Capital founder and managing partner Alexa von Tobel told Business Insider.

But the report is also yet another example of how Silicon Valley continues to lag behind gender parity in pay, wealth creation, and equity, founders and investors said.

Some point out that data is data so it's helpful to know where the industry stands so that it can progress. Yet, the data doesn't show one of the most critical pieces of information: if VCs across the board are offering the same terms to female-led startups as they are to male-led ones.

Some suspect they are not and that women are being asked to sell bigger chunks of their company to investors for less money.

"Especially in the early days, I suspect the cost of capital is more expensive for female founders than their peers," Carrot Fertility founder and CEO Tammy Sun told Business Insider. "Of course, this isn't tracked anywhere so it's hard to definitively say."

The disparity highlights a glaring omission in many conversations around equality in the tech industry. While much attention is rightfully paid to the number of female founders, board members, and engineers, the ability to equally create wealth is largely overlooked. Especially at early-stage startups, founders and early employees tend to forgo salary in favor of shares in the company that may turn into a nest egg down the road. Without an income, many founders end up relying on savings or other ways to cover living expenses.

"I know it can be hard especially when access to capital is already an uphill battle but my tip to female founders is to keep an eye on valuation, too," Sun said. "Fundraising is a combination of performance and potential. Don't undervalue your potential."

The uphill battle to raise investment at the same level as male cofounding peers can become a self-fulfilling prophecy, too. Female employees see how other founders struggle to raise money, so they delay starting their own companies until they have accrued enough savings to leave full-time employment. Founders continue to struggle to raise, and even when they do, do so at lower valuations and bring in less for themselves. Even with an exit - the holy grail for many tech founders - a female founder might take home less than a male counterpart, and thus will have less money to use as an investor or repeat founder.

"It starts with parity at the top of the funnel," von Tobel said. "As seed and series A investors at Inspired Capital, we're fortunate to see equal numbers of male and female founders pitching us every day. We're confident that this diverse pool of founders will shape the future with massive ideas, build the next generation of successful companies, and become role models for all the entrepreneurs that follow."