Firms invested a total of $434 million in Q3—the lowest figure since the second quarter of 2017.
The third quarter total also amounts to a 48% drop in funding from Q2, when female founders received $841 million across 132 deals. The pandemic has dealt a disproportionate blow to female business owners, with 2020 shaping up to be one of the worst investment years since 2017.
In the face of uncertainty, many VCs have stayed closer to their networks. This has closed them off to outsiders, affecting the women and minorities trying to break into their circle.
In the first quarter of 2019, VC funding hit a decade peak of $950 million across 207 deals. The year ended with a total of $3.35 billion invested over 709 deals. So far in 2020, venture capitalists have injected almost $1.9 billion into female-founded companies.
Economic uncertainty has also forced women to hold onto jobs with steady income and health benefits. This causes a vicious cycle: If women feel they can't raise capital successfully, they become more likely to scrap their entrepreneurial plans.
Women founders also had to contend with investors wanting to deploy excess dry powder into existing portfolio companies during the early months of the outbreak.