Female founders reading a TechCrunch report in mid-July found little to smile about. The media outlet reported that startups with all female-led founders are struggling to raise capital in 2023, having picked up just $1.4 billion – 1.6% of allocated capital – in the first half of 2023. During the same period of 2022, all female-founded startups raised $3.1 billion, a drop of $1.7 billion in a year’s time.
What gives? Part of it can be attributed to an overall slow-down in the venture market due to jitters in the economy. According to Pitchbook during bear markets, investments in women-led companies drops as fund managers seek “safe” investments, preferring male-led to female led startups.
Apparently, VisionTech Angels investors didn’t read the TechCrunch report as 45 wrote checks totaling $338,000 in two female-led startups, Pelvital led by CEO Lydia Zeller, and Amplified Sciences led by CEO Diana Caldwell. Pelvital raised $173,000 and Amplified Sciences $165,000 with VisionTech in seed rounds.
VisionTech Angels has invested in four startups this year, three of which are led by women (Karen Wurster, CEO of Adipo Therapeutics, is the third). Executive Direct Ben Pidgeon is not surprised by his group bucking the trend and betting on female founders in 2023.
“In each case, we have strong, proven, trailblazing female leaders in Lydia, Diana, and Karen with potentially transformative solutions in the life sciences market. They may be breaking barriers, but our members saw solid opportunities that are rewriting the code of innovation and invested in these companies and their leadership.”
Zeller, whose company Pelvital is commercializing a clinically proven medical device called Flyte that helps solve the embarrassing problem of female urinary incontinence, admits that female-led startups face unique challenges, some of it self-inflicted. Women tend to undervalue the perspective and expertise they bring to the table and struggle with pre-conceptions of what an entrepreneur looks like. She believes women need to flip the table on this thinking.
“Our varied responsibilities across work and non-work domains help women leaders by necessity become adept at synthesizing nuanced information from multiple inputs and distilling it into key actionable insights. I rarely encounter a woman CEO who is hampered by overly linear thinking. They are open minded, curious, skilled at evaluating and mitigating risk, and unafraid to seek the diversity of perspectives that strengthens any decision-making process. A woman who has founded a company or risen to leadership has already overcome odds and is likely to have the passion, curiosity, drive, outside-of-the-box thinking, tenacity and grit that are key to startup success,” she says.
Caldwell is no stranger to startups. She is the founder of Pearl Pathways, a life sciences consulting firm she led as CEO for nine years. Caldwell also has served as an entrepreneur in residence at the Purdue Research Foundation and on the boards of startups. Having advised hundreds of life sciences entrepreneurs, it comes as no surprise that she would join a well-respected Purdue researcher, V. Jo Davison, PhD, in co-founding Amplified Sciences. Based in West Lafayette, Amplified Sciences is a clinical stage diagnostics company focused on accurately detecting and preempting the risks of debilitating diseases.
Having a male co-founder is proven to increase the odds of a female founder attracting capital. In 2022, startups with male and female co-founders secured 16.5% of venture capital compared to 1.9% women-only founders pulled in. Says Caldwell, “Clearly, there are more challenges in fundraising for female startups. There have even been well documented studies demonstrating that investors ask different kinds of questions of females when pitching. Specifically, men get asked questions about the potential for gains while women get asked about the potential for losses. “
Caldwell, like Zeller, has not let these biases stop her or other female founders who are her colleagues. “I know many life sciences female founders who are rockstar builders of teams, incredibly creative when solving problems, know how to surround themselves with diverse teams AND listen to them, and are always planning ahead for plan b and c. And when it comes to capital raises, perhaps we are more familiar with how much one can raise with ‘bake sales’ and therefore get really creative when fundraising,” she says.
Case in point, in early July, Amplified Sciences pursued and was awarded a SBIR grant worth approximately $400,000 to develop a test to determine if pancreatic cysts are benign or potentially malignant. Says Caldwell, “I’m extremely proud of our team for earning the SBIR award. This grant provides important non-dilutive funding that will help us achieve a number of milestones and help fund partnership with clinicians to access critical clinical samples.”
As for Zeller, Pelvital closed its seed round in July having raised $2.68 million. Boomerang Ventures led the round with participation from VisionTech Angels, Wisconsin Investment Partners, and Edward Bergmark, founder and former CEO of Optum. The infusion of capital was well timed. The company is preparing for the release of its next generation Flyte device in October that delivers an enhanced user experience and adds significant capabilities for clinical partners.
“With our recent funding round, we expanded our commercial team, bringing in three leaders with outstanding experience across the clinical and payor ecosystem and are dedicated to improving women’s health. Our team is energized and keenly focused on expanding access to Flyte’s novel technology through contracts with health systems, payors, and virtual healthcare providers. It’s going to be an exciting and pivotal year for Flyte,” Zeller says.
Pidgeon loves the energy VisionTech Angels’ women-led startups bring to the group’s investment portfolio. “We recognize that traditionally angel investing has been the realm of men. VisionTech Angels, however, has a history of investing in highly capable and high-performing female founders and CEOs—Shaily Baranwall of Elevate K12, Lindsay Watson of Augment Therapy and Haley Marie Keith of MITO Materials—to name a few.”
He adds, “We’re excited to add Lydia, Diana, and Karen Wurster to our portfolio in 2023. It may be a down year elsewhere for investing in female-led startups, but that’s definitely not the case with VisionTech Angels.”
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