Amidst a Tumultuous Climate, Don’t Leave Women Founders Behind
By Jessica Haselton, Director, Education Innovation Ventures
March 22, 2023
The Silicon Valley Bank closure and its aftershocks have affected start-ups, social enterprises and nonprofits alike, including many in our Education Innovation Ventures portfolio, but the largest bank failure since 2008 will arguably be felt most by women entrepreneurs as well as entrepreneurs of color.
When it comes to financing their businesses, women and entrepreneurs of color have historically received – and continue to receive – fewer small business loans than their male counterparts. And when they are approved for debt financing, they receive higher interest rates and smaller amounts.
Similarly, equity investments in women-led companies have declined, dropping from 2.4% to 1.9% percent in 2022, tracking with research showing that female-led ventures are 63 percent less likely than male-led ventures to secure capital. While trends are moving in the right direction for Black and Latinx women, they still receive less than 1% of all venture capital investment.
When the status quo is upheld, fewer and fewer ideas get the opportunity to flourish, even as market conditions shift, resulting in a perpetuation of inequity that is difficult to change. While not perfect, Silicon Valley Bank was known for providing debt and other forms of capital to venture-backed start-ups led by women and people of color. Now with the bank’s failure, access to capital and venture debt will likely become even more difficult to come by.
Times like these offer a reminder to those of us in the investor community that we must step up and prioritize investing in women-led ventures.
For the past five years, Education Innovation Ventures has focused on driving capital to ventures focused on improving postsecondary education and economic mobility for underserved communities, while intentionally cultivating a diverse and inclusive body of leaders.
We have had the privilege of partnering with some of the boldest and most innovative women entrepreneurs making an impact on education and future of work. These leaders are often taking on some of the world’s biggest, most intractable and complex problems. We are proud to support them and their success:
- While mentoring and volunteering for a decade at local high schools, sisters Michelle and Grace Cho recognized a growing gap between school and career, especially for students from low-resourced neighborhoods. They developed a set of online resources and workshops for students to help increase exposure to and exploration of college and career opportunities. Today, Gladeo is the career navigation and exploration tool of choice for Los Angeles County and was recently recognized by the Department of Education as a finalist in its inaugural Future Finder Challenge, reimagining and advancing career navigation for adult learners.
- When Jessica Rothenberg-Aalami realized that one in three adults lack the digital, literacy and health skills needed to thrive, the Silicon Valley native and entrepreneur of over 20 years developed a mobile learning platform to bridge education, digital literacy and opportunity. Today, her technology, Cell-Ed, is used in over 40 countries, and was recently made available by the State of California to help upskill home and health aides and other care economy workers throughout the state.
- After a long stint designing and building enterprise education solutions, Katy Kappler and her team leveraged lessons learned to design a virtual community platform that gives students access to information, people and resources needed to feel a sense of belonging, connection and success in college. Students who engage with her platform, InScribe, during their enrollment process were found to be twice as likely to matriculate as their peers.
- Navigating college on their own as international students in the US, sisters Claudia and Carolina Recchi struggled to navigate campus life and access needed resources, prompting them to found EdSights, an adaptive artificial intelligence tool using SMS text messaging to increase persistence for students in college. To date, the sisters have supported over one million students across the US.
We are grateful to these partners and the many more doing such important work: Jennifer Kushell, founder of Exploring Your Potential; Lateesha Thomas, co-founder of Onramp; Alexandra Bernadotte, founder of Beyond 12; Stephanie VanPutten, founder of Blendoor; and Jean Hammond and Tetyana Astashkina, fund managers of the venture impact fund LearnLaunch, You can learn more about their work and our other Education Innovation Ventures portfolio companies here.
During Women's History Month ― and beyond ― let’s celebrate the important contributions of women entrepreneurs and the impact they make in their communities. By investing in companies with diverse leadership at their earliest stages, we can help make the financial ecosystem more equitable, and ultimately more resilient, for all.