In Africa, having a husband earns you more respect. It doesn’t matter if it’s a bad marriage. It grants more street credibility and make people believe you’re own some form of stability.
Unfortunately, it’s the same in the global venture capital funding space.
In 2022, US women collectively raised $4.5B in VC funding.
This would have sounded really good, but it was a paltry 1.9% of the $238B raised for the entire year.
So who got the rest?
Teams with more men and at least, one woman founder.
When the team is mixed, VC funding raise jumps to 17.2%. According to Crunchbase, this trend has remained consistent for the last 10 years.
To commemorate International Women’s Day, I decided to extract data from Crunchbase to creat this Sankey chart for us to have something to let this sink in as we draw insights from the data.
So let’s get busy!
This is how 9 of the world’s largest VC firms invest in diversity (women and minority founders)
I looked at the data for the following companies; a16z, Sequoia, Dragoneer, New Enterprise Associates, Khosla Ventures, Founder’s Fund, Light Speed Ventures, and Accel
a16z: 1 diversity investment made for every 6.5 investments
Sequoia: 1 diversity investment made for every 8.7 investments
Dragoneer: 1 diversity investment made for every 10.35 investments
New Enterprise Associates: 1 diversity investment made for every 7 investments
Khosla Ventures: 1 diversity investment made for every 5.5 investments
Founders Fund: 1 diversity investment made for every 5.3 investments
Accel: 1 diversity investment made for every 12 investments
Light Speed Venture Partners: 1 diversity investment made for every 7.8 investments
💡 INSIGHTS
Funds earmarked for #diversity founders since the inception of these 9 VC firms;
💡 a16z: 15% since 2009
💡 Sequoia: 11% since 1972
💡 Dragoneer: 9.6% since 2012
💡 New Enterprise Associates: 14% since 1977
💡 Deerfield Management: 100% since 1994
💡 Khosla Ventures: 18% since 2004
💡 Founders Fund: 19% since 2005
💡 Light Speed Venture Partners: 18% since 2000
💡 Accel: 8.3% since 1983
💎 Deerfield Management is an outlier, investing in few later stage projects on an enormous scale with a lot of women on board at this stage.
💎 The largest VC funds earmark an average of 8 – 18% of funds to diversity since their inception.
💎 Peter Thiel’s Founders Fund has enabled more diversity funding at 19% followed by Khosla Ventures and Light Speed Ventures at 18% each since their 2000s founding. Leveraging the strength of diversity founders beyond foundational industry players like Sequoia and NEA.
Isn’t it alarming that in 2023, a woman needs to keep a man in the room to make the major cut of the funding chunk?
Happy International Women’s Day to all the #women#founders in the world and women VC introducing more diversity opportunities.
As one of the world’s most successful venture capital firms, hosting and having hosted some of the most successful unicorns and decacorns in its portfolio, a16z has harboured no fears in venturing into the rough waters of Web3 investing, AKA the Crypto/Blockchain market.
A16Z Crypto made strong showing through July 2021 to June 2022, investing across a diverse range of subsectors in the cryptoverse. Within this duration, Bitcoin, the major cryptocurrency, tanked heavily in June, made it’s all time high (ATH) above $68,000 in September and has stayed bearish as of this writing. As you may already know, the Bitcoin crash set off a domino effect across all altcoins and tokens bringing the entire market to the much talked about crypto winter.
Pink horizontal line showing BTC ATH and red vertical lines showing BTC performance from July 2021 to June 2022.
A16Z Crypto is the Web3 fund of the global venture capital giant, Andreessen Horowitz (a16z). While Web3 has become an all encompassing word, habouring a long lineup of sectors, this fund is aimed at startups launching or that have launched their services or products on the blockchain. The blockchain being the underlying technology, or for simpler understanding, the manufacturing plant for cryptocurrencies. The fund is also focused on core crypto related projects such as exchanges.
A16z Crypto’s Investment Strategy The fund is structured like a hedge fund and not a traditional VC fund, with a goal to hold crypto investments beyond the normal 10 year venture capital cycle, according to Yahoo Finance. It shoots to maintain aggressive investing in both bull and bear markets, consolidating on its long term view of the market. Also, it will look towards investing at all stages. Think: Preseed to late stage, and you will be on track.
A16Z Crypto Stats and Analytics A16Z began investing in crypto in 2013 with a first investment in cryptocurrency exchange platform, Coinbase. A16Z has raised a total of $7.6 billion under its crypto fund, a16z Crypto from 2018 to 2022.
A16Z has invested in a total of 113 companies since inception, with 75 of these being crypto/blockchain startups according to data from blockdata. There has been 4 major fails off these investments including Diem, OpenBazaar, Basis and B17 Clout.
Pie chart highlighting the number of successful and failed crypto investments
Investments from July 2021 to June 2022 During this period, a16z has made investments in 56 startups in the following subsectors: blockchain, gaming, custodial/wallets, staking and trading exchanges, analytics, tokenised carbon credits, NFT, metaverse assets, IOT and hardware.
Of these investments, blockchain startups have swooped up the majority of the cash, trailed by gaming. With each having an equal investment total of 10. Investments in both segments exceeded the $1 billion mark, as blockchain shoots past gaming by over a $100 million.
Comparison between number of investments per sector with cash allocation to each segment
Investments by Country
A16Z invested in crypto startups across 4 major continents. Investment count includes 44 in the US, 2 each in Canada, Vietnam, United Kingdom and Switzerland. It made single investments in India, Phillipines, Australia, France and Singapore.
Relevance of a Venture fund’s strategy As a Web3 startup founder or a prospective one, it is important to know how crypto focused VC firms invest their funds to be strategically stand a chance to be captured into their nets.
As a venture capital firm, understanding and tracking investment trends of the big players could be the the thin line between a sub par outing and a stellar performance.
Visualisations created with Tableau, Data Wrapper, Excel
It’s completely unbelievable the tons of things you can invest in today compared to a couple of decades ago, and let’s not forget how unbelievably easy it is to actually start investing, now more than ever. As a result, there has been an overload of messaging on how to invest and what to invest in. This rush of knowledge may leave you feeling flustered, as you wonder which way to go if you’re a potential newcomer still contemplating how to get started in the world of investing.
This is because the 21st century has produced an ocean of investment opportunities for anyone willing to participate, from stocks, bonds, derivatives, commodities, certificate of deposits, money market accounts, forex trading, mutual funds, crowdfunds, venture funds, peer-to-peer lending, angel investing, cryptocurrencies, tokens, non-fungible tokens (NFTs), initial coin offerings (ICOs), initial public offerings (IPOs), real estate, pyramid schemes, and scams. Yes, you read that right! Scams! The list is endless.
The basis for investing is to multiply wealth, not to lose money you’ve already made through your job or business venture. Hence, it is common sense to keep your money instead of throwing it away at the wrong projects, which makes knowing the right things to do before taking a giant leap into investing important for you and the future of your hard-earned cash.
At the back of your mind may be questions about investing. Some questions may have a straightforward answer, such as: Am I too old to start investing? No, you can begin investing at any age. Do I need a lot of capital to start investing? No, you just need a plan – the right plan for you. Also, you may have questions that don’t have clear-cut answers, such as: Will I lose money if I invest?
Probably, but if you do your homework, you’ll be fine. Such questions, whether straightforward or hazy to answer, need not inundate you. To make you feel confident, providing the right safeguards to help you make the most of this journey is of the essence.
Here are five things to know before investing:
Investing is risky. This is the first and most important thing you need to know before getting started, and it can’t be overemphasized. Investing in anything has a risk factor to it, be it business or the stock market. In business, you take stock of the SWOT analysis before making your decision because you want to know if taking that step will be worthwhile. Understanding the strengths, weaknesses, opportunities, and threats will help you gauge the risk involved if you put your money in the business. You then determine how to mitigate the risks involved in order to be profitable. It is exactly the same with investing. A soaring stock this year may be a tanking stock the next year. Putting your money in an investment may bring you higher returns, lower-than-expected returns, or even no returns, eroding your initial capital.
Every professional investment firm is mandated by licensing authorities and regulatory bodies to issue this warning to all aspiring investors prior to their making an investing decision, as part of their service provision. Despite this, being knowledgeable about what you want to invest in is a start to assuaging potential risks. You will then be looking to start investing based on your risk appetite.
A few questions you will need to ask yourself could include: How risk tolerant am I? Will I feel terrible and stop investing if I lose my capital? Can I survive comfortably without this capital I’m about to invest? How much returns can I make from this investment? What do I plan to do with the returns I make? With this backdrop, it is good that you take note that investing is business, and should be approached as so in order to make success of it.
Investing isn’t a get-rich-quick scheme. The second thing you need to know before investing is that real-time investing isn’t a get-rich-quick scheme. Investing is a process. However, you have the opportunity to decide what you want your own investment process to look like. Do you want long-term investments that will provide an egg nest for you in retirement or do you want short-term investments that you can earn from on a rolling basis, quarterly or annually or even weekly? This is your choice, and your goal will be to seek knowledge of opportunities that give you exactly what you want out of investing. A good place to start learning is the Security and Exchange Commission’s office of investment education and advocacy. You may decide to have a mix of both long- and short-term investments across different portfolios or investment vehicles – the choice will be absolutely up to you. Examples of investing you can do for the long term could include stocks, bonds, real estate, cash, etc., while short-term investments like high-yield savings, treasury bills, and bonds can be traded for cash between 3-12 months, with maximum holding capacity of five years.
Real-time investing isn’t a get-rich-quick scheme. Investing is a process.
Investing is in grades. Every veritable opportunity to grow your capital may be termed an investment, but not all investments are born equal. So, what you need to understand is that there are different levels to investing. The question is how much can you allot to investments after saving money to sustain your current lifestyle? What investment opportunities can this amount of money get you into? In his ground-breaking book on investing, Rich Dad Poor Dad, Robert Kiyosaki described his inability to make certain types of investments because of cash limitations. For example, you may need to hold cash assets of up to $250,000 with a licensed broker to stand a chance to invest in an IPO according to Bankrate, and you may need as little as $10 to start investing in currencies with an online forex broker. Investing in mutual funds may require between $1,000 to $5,000 according to Investopedia. The question is, which grade of investing can your money start you off with?
Investing support pillars are important. You can start investing on your own after gathering enough information that fits your needs. Notwithstanding, having investing support pillars may prove to be the thin line between success and failure. These pillars can include fund managers and investment advisors. A good advisor will provide guidance on the selection of the right options for you, or create a diversified portfolio to enable proper risk management. Professional support will steer you away from pitfalls, and keep you within the limits of the law in terms of rules guiding investing in your country like tax remittances, restrictions on retail investing, etc. Other investing support pillars can include experienced friends and family members who are willing to furnish you with mentoring and advice.
A good advisor will provide guidance on the selection of the right options for you, or create a diversified portfolio to enable proper risk management.
Investing opportunities will expand. The fifth and final thing you need to know is that opportunities for investing will continue to expand with new knowledge and the introduction of nascent technologies. This will give rise to avenues for all kinds of fads. While some will stand the test of time, a lot will fizzle out or cause losses to investors. A common acronym in investing circles is FOMO (fear of missing out), meaning the frenzy caused by the herd mentality of a large number of people chasing an investing opportunity. The bottom line is, with proper investing advice, you can better navigate such scenarios even if it captures your entire community positively or negatively. Expanding your knowledge of investing will help you have the right mindset to approach new opportunities, seek professional advice, and take advantage of opportunities in the best way possible.
Embracing these five tips can go a long way towards giving you the needed edge to succeed as an investor.
To wrap this up, here are the five takeaways of things you need to know before investing:
Investing is risky; it’s a business. Treat it like one by evaluating your risks.
Investing isn’t a get-rich quick scheme. Investing is a process – enjoy the journey.
Investing is in grades. Investing is zeroed down to what you have and finding what is suitable to invest in with that amount.
Investing support pillars are important. Investing with professionals and mentors will provide a safety net for you.
Investing opportunities will expand. Investing avenues will always abound, so keep gaining knowledge, and don’t FOMO.
With these 5 things you now know, how ready are you to start investing?
babeonideas 