Unicorns, Brilliance Bias, and Hope


It’s been ten years since Cowboy Ventures founder Aileen Lee coined the term “unicorn” to describe startups with a $1 billion valuation.

TechCrunch says the pace at which startups achieve billion-dollar valuations accelerated through 2020 and 2021, but today, unicorns are rare, with late-stage capital scarcer than it was a few years ago.

That got me thinking about what it all means for women founders, especially given Miller Center’s focus on supporting women’s economic power.

PitchBook recently released its 2023 US All In and European All In: Female Founders in the VC Ecosystem. It examines how female founders and investors are stacking up in the broader VC industry. Here are some of their findings.

  • Female co-founders (whose co-founders are male) made significant strides in 2023 by securing a record-high proportion of VC capital in the United States at 20.7 percent of total US funding and near-record levels in Europe, but there continues to be a wide gap between investment in female-founding teams and male-founding teams. For female founders, that number was just 2 percent, the lowest since 2016.
  • Angel investment into female-founded companies fell by more than half in the US, and in Europe, angel investment saw the lowest total deal value since 2018.
  • Fewer than 20 percent of US decision-makers and just over 15 percent of European decision-makers at venture firms are women, as the General Partner landscape continues to be male-dominated.

As the Financial Times puts it, “Some 85 percent of the writers of cheques for VC investment are men, according to the non-profit group All Raise and Crunchbase.” They also noted, “One source of hope for female entrepreneurs is greater representation of women within VC firms. 35% of junior-level investment positions were female in 2022, up from 25 percent in 2016. As they rise up the ranks, they might be more inclined to back the female-led unicorns of the future.”

That can’t be the only solution.

Promising Research & Training Underway

Systemic changes in investment decisions are a critical way forward in narrowing the wide gap between funding women founders and their male counterparts, and it starts with addressing bias. Under a three-year grant from Chevron, Miller Center is working with Santa Clara University professor Dr. Maya Ackerman, who is conducting research and developing novel training methods for understanding and overcoming entrenched biases in the start-up ecosystem.

Dr. Ackerman has identified “Brilliance Bias” — the implicit association of higher intellectual abilities with men — as the main driver behind the gender capital gap. Most people implicitly assume that someone intellectually brilliant or a “genius” is male. The problem is that investors often don’t invest in female CEOs because their mental map of a “brilliant business leader” is based on men.

According to her research and analysis, there are major differences in the leadership styles of male and female unicorn CEOs. She notes that women unicorn CEOs demonstrate “connective” leadership — empathy, humility, high-content thinking, and collaboration. These competencies, which are more commonly found in female leaders than male leaders, are associated with success in those businesses.

Dr. Ackerman contends that investors need to learn to recognize and value connective leadership in founders. “We all have implicit bias and need to be willing to tolerate the discomfort of discovering our own biases so that we can do better. At scale, if people holding the money in venture capital are willing to do that work, we’re going to see a huge difference in funding women-led start-ups,” she said.

Another study undertaken by two academic researchers from NYU Stern School of Business and University of Glasgow’s Adam Smith Business School, along with Village Capital, looked at gender bias in financing by focusing on the investor evaluation process. As reporter Anne Field commented in her Forbes story, “They focused on the evaluation process, especially the well-documented tendency for potential investors to zero in on matters related to risk when assessing women entrepreneurs as opposed to questions about growth potential when examining male founders.”

The bottom line? When investors use consistent assessments to treat men and women equally, women fare much better than they do otherwise.

Investing in Women-Founded & Women-Led Social Enterprises

So, what is Miller Center doing now while we wait for these systemic changes to take hold? We are intentionally supporting and investing in women entrepreneurs. Over 60% of the social enterprises we worked with in 2023 are women-led. Among graduates from our accelerator program alone in the last two years, an astounding 92% are women-led. And when I see the impact that these social enterprises are making in the world, it gives me hope.

Among our social enterprise community, women-led organizations are narrowing the funding gap, raising an average of $1.5 million within three years of completing one of our programs, compared to $2.8 million for non-women-led. Their impact tells an even better story, with women-led organizations improving an average of 410,000 lives compared with 390,000 lives for their men-led counterparts.

We created Miller Center Capital, a funding vehicle designed to unlock and catalyze capital for social enterprises in the Miller Center community, many of which are women-founded and/or women-led. Here are some of the women-led social enterprises that we have funded and the impact those investments are having:

  • Nazava, cofounded by Lieselotte Heederik, is based in Indonesia. The company manufactures and sells low-cost water filters there and in Kenya and has begun distributing its products in Ukraine and 10 other countries. By providing safe drinking water, Nazava tackles health, poverty, and climate change, while also reducing plastic waste. While Nazava has a long track record in Indonesia, they are just starting operations in Kenya and focusing on a new business model there. The lack of track record with this new model in a new geography led many other investors to overestimate the risk there. Because of our long relationship, we have a deeper understanding of Nazava’s strong execution ability, and therefore saw the risk as manageable. Our early loan demonstrated confidence, unlocking $300K in follow-on funding — a 4x multiplier.
  • Be Girl, founded by Colombian industrial designer Diana Sierra in Africa and now operating globally, is a women-led global social enterprise that brings expertise in menstrual health and hygieneto emerging countries, focusing on Africa and the MENA region. Be Girl specializes in supporting NGOs, UN agencies, and governments in their sexual and reproductive health (SRH), gender, youth, and WASH initiatives, offering access to high-quality reusable menstrual care products and educational training services designed to promote positive social and behavioral change and reduce stigma around menstruation. In late 2023, Be Girl secured their most significant order to date — a multimillion-dollar contract with the Ministry of Education of Angola and UNFPA, the United Nations Sexual and Reproductive Health Agency, to develop the National Menstrual Health Curriculum for the country of Angola and reach 200,000 girls with menstrual hygiene kits that offer two years of sustained protection — a remarkable milestone and breakthrough that needed supply chain financing. Miller Center provided a $100K investment for purchase order financing and catalyzed an additional $322K from other investors. In 2024, Be Girl achieved its most profitable quarter in history and is poised to quadruple sales from 2022.
  • Mtindo, cofounded by Susan Namirimu and Morgan Ginn, is a vocational training and design studio in Uganda that helps local women gain job skills in the apparel industry. It offers employment opportunities for women by working with brands locally and globally to bring their products to life. By the end of 2023, Mtindo was growing rapidly but needed capital to meet demand. Miller Center Capital invested in Mtindo by providing a $10,000 revolving short-term loan facility to fund working capital expenses such as cloth, buttons, and zippers, allowing Mtindo to capitalize on their aggressive sales efforts. As a revolving loan, the company can draw down and recycle the funds over and over again. In less than three months, Mtindo has already repaid the loan once and been approved for and drawn down double the credit limit of $20,000 based on growing orders.

Let’s all work toward a much shorter runway to fairly fund women-founded and led enterprises. After all, as a Boston Consulting Group survey reported, “Businesses founded by women ultimately deliver higher revenue — more than twice as much per dollar invested — than those founded by men, making women-owned companies better investments for financial backers.”

It makes its own business case.


Photo Credits:

  • Mtindo cofounder and CEO Susan Namirimu (right) with fellow cofounder and board chair Morgan Ginn
  • Nazava cofounder Lieselotte Heederik (center) with team in Indonesia. © Sandro di Carlo Darsa
  • Be Girl founder Diana Sierra (center) with her team at Mozambique Fashion Week