Investments for Women in Legal Tech Are Low
There is a severe lack of funding for women in the legal tech realm, and in tech in general. A recent survey conducted by the CEO of Obelisk Support, Dana Denis-Smith, shows problematic findings based on 3,500 businesses in the US and UK. Here’s what you need to know.
  • women
  • Female Founders
  • legal
  • tech
Meredith Boe
Published on Mar 09, 2020

 

There is a severe lack of funding for women in the legal tech realm, and in tech in general. A recent survey conducted by the CEO of Obelisk Support, Dana Denis-Smith, shows problematic findings based on 3,500 businesses in the US and UK. Here’s what you need to know.

 

Key statistics

The survey from Denis-Smith shows that under 1% of the formal investment in the new law industry was to companies founded solely by women. (This is less than the average for investing in female-founded startups across sectors, which Fortune reported was 2.7% of total venture capital investment.)

 

Other vital statistics that the survey revealed:

  • The ten largest legal fundraisers are all male-founded companies, with just two women cofounders among them.
  • The total investment raised by sole female founders in new law in 10 years was $43.7 million.
  • The top UK fundraisers raised over $100 million, and there were no female founders.
  • The top five female founders who were part of mixed-gender founder teams raised $200 million.

 

Why does it matter?

These statistics reflect the unfortunate state of venture capital today. Women are still not treated as equals or with the respect they deserve for their hard work and innovation. In the same survey, women reported the shocking things they heard when trying to raise funds for their businesses. Among these revelations:

  • “Are you the cupcake or kid-thing on the agenda?”
  • “Why don’t you just do this as a hobby for free?”
  • “Can you add a male person to the Management Team for your pitch deck?”
  • “Have you had your eggs frozen?”

 

These statements clearly show that the statistics are not just a coincidence. When one woman or a pair of women are on their own in their pitches, they’re not taken seriously. So why would these investors fund them?

 

It’s been shown time, and again that diversity helps companies in every industry thrive. And, according to a study from MassChallenge and BCG, women-founded companies perform better than their male counterparts: “Startups founded and cofounded by women are significantly better financial investments. For every dollar of funding, these startups generated 78 cents, while male-founded startups generated less than half that—just 31 cents.” The study also found that women-founded startups generated 10% more revenue over a five-year period than men-founded startups.

 

But the current reality is that male-driven companies are still getting most of the investments, even while many of these companies fail. For example, UpCounsel and Atrium, both male-founded companies, received a lot of funding from investors. They both ended up shutting down while many female-founded companies are still around.

 

It’s time for the worlds of legal and tech to reckon with these facts and start putting investments into profitable startups founded by females. NextChapter was proudly founded by a woman and continues to operate with a female-majority team.