In August of 2019, the World Economic Forum published a sobering statistic: If the trends at the time continued, it would take 208 years to close the gender gap in the U.S.
As the leader of a prominent community of women and nonbinary founders, and as a mom to two little girls, the report felt personal. I remember thinking: “Wow. This is really bad.” Never in my wildest dreams would I have guessed that just over a year later, gender equity would get much, much worse.
Seven months ago, our lives were disrupted by the COVID-19 pandemic. Today, we have clear evidence that the brunt of its economic impact in the United States has been borne by women.
Last month, 865,000 women left the workforce—four times more than the equivalent number of men. Venture funding for women-founded companies has historically been abysmal, at less than 3% of all venture capital invested. Last quarter, it dropped to a three-year low. To cap this grim picture, new data by the Female Founders Alliance, the organization I run, suggests that fewer women are starting companies due to the pandemic.
In September, our team surveyed a diverse group of professional women and nonbinary individuals with high likelihood of having entrepreneurial aspirations, including 38% people of color and 5% who use they/them pronouns. Before the pandemic, 87% were somewhat or highly likely to start a company. Six months later, 51% of them have delayed or scrapped these plans.
The primary reason for this change is financial instability: 48% of those who changed their plans did so because they need steady paychecks; another 20% rely on steady corporate benefits, including health insurance. As one respondent told us, “I am feeling very unstable monetarily about the future. I’m approaching 32 and wanted to start a company with a friend in NYC, buy a small house, and maybe plan for a family with my partner. Now I’m going to focus on my contract job and forget the company, stay in our apartment, NOT plan for kids, and see how things pan out over the next year.”
The paltry fundraising landscape for women founders also creates a catch-22: Would-be startup founders who have full-time jobs have trouble fundraising, but without funding, they can’t quit their jobs to work on their startup full-time. This was true before the pandemic, affecting women of color even more. And it’s worse now. “I’m struggling to get my startup to a level worth investment as a side gig,” said a would-be founder in Richmond, Virginia. “It feels risky to quit my job without funding. It is a chicken-and-egg scenario and extremely irresponsible considering I am the ‘breadwinner’ in my family.”
The impact of the pandemic on childcare and schooling has exacerbated these problems for moms. Seventy percent of respondents with school-age children are now responsible for managing remote learning, and a fifth of respondents have lost all or most of their childcare. And even though most respondents are still employed (84%) and living with