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What’s Hot & Cool? #17: Men Funding Women

It’s about time.

What’s happening? Talk on the startup gender gap isn’t new and the stats are harrowing. Women own a third of all businesses in the U.S. and only earned a mere 3% of all venture capital between 2011 and 2013. But this isn’t a pity party. Lots of women-led startups got the money they needed to succeed through alternative methods, like crowdfunding campaigns, and ascended to millionaire status. As a result, men (who are consequently the majority of venture capitalists) are starting to look positively toward funding women and minority-founded startups.

Why should you care? If you’re a VC, think of all the female-led startups that took off without seed funding. That’s a blossoming business share that you as an angel investor lost out on. Not to mention women are highly effective at fund recruitment. Companies with women as co-founders tend to raise more money than those without, and startups value higher with women on the team, according to this report. Investing in women is lucrative.

Who’s leading? Lucas Point Ventures founder Adam Quinton, an investor known for funding against the grain, is decidedly funding women and minority-led businesses, not because it’s “the right thing to do” but because it makes business sense. He told Forbes: “I want to make money. It would be nice to make money and make the world a better place, … but I’m just doing it to make money.” And supporting diverse teams has led to big gains. Some of his projects include: The Muse, Glassbreakers, Venuebook, Pinks and GreensRapt Media, Hire an Esquire, and Validately.

What can you do? If you’re a VC, do your research to understand why the startup gender gap exists. Knowledge can prevent you from making habitual assumptions that can lead to mistakes — like tossing out good business ideas with potential. If you’re a woman founder looking for capital, consider pitching to this list of investors fishing for female-led startups. Backstage Capital is another great company to check out.