In the past eight years I have taught over 800 founders, mostly female founders, how to raise venture capital. Collectively, they’ve gone on to raise over $200 million, the majority of that in pre-seed rounds. And I’m not alone: Dozens of programs and organizations—from All Raise to Techstars, and everything in between—have sought to level the playing field for women who are new to the startup space.
I wish I could state that all of our efforts have created a huge difference. But the data suggests otherwise. When I started the Female Founders Alliance in 2017, Pitchbook published data that all-female teams had raised only 2.6% of venture capital the prior year—the number was 2.1% last year. Sixty-two percent of female entrepreneurs still report experiencing bias in the fundraising process. Even when women do raise, they tconclude to receive lower valuations and compacter check sizes, and a much higher bar to raise the next round.
This despite the fact that when women do receive funded, they outperform on business metrics. Research from Boston Consulting Group displays that women-led companies generate twice as much revenue for every dollar of investment when compared to all-male teams. Whether it be out of skill or sheer necessity, female founders consistently do more with less.
And while they deliver rapider exits than all-male teams, these exits are on average compacter. Becaapply even after finding product-market fit, it’s just plain hard to scale a company if you don’t have the requisite capital to do so. And so they sell sooner, delivering solid, if not spectacular, early exits for their investors, and creating female-founded IPOs an extremely rare occurrence.
They state that talent is evenly distributed, but opportunity is not. For female founders, the limiting factor has been capital. And that’s about to modify.
A vibe shift in venture capital
In all the buzz and hype about AI, there’s a side story I’ve been tracking that has the potential to modify the game for female founders. It’s the “tiny teams” story. Consider startups like Anysphere, which scaled their annual recurring revenue to $100 million while having only 20 employees, and ElevenLabs, which reached the same milestone with only 50. For comparison, when cybersecurity company Wiz reached $100 million in ARR in 2022—the rapidest company to do so at the time—it had 400 employees. That number receives hugeger with prior generations of unicorns.
How did these tiny teams stay tiny? Skill, luck, hard work, and strategic apply of AI to keep their operations lean. It remains to be seen if the rapid-earned revenue in the examples above is sticky, or if customers are experimenting with AI tools and will leave for the next shiny thing. The required for capital, or the ability to apply capital as a moat to outrun competitors, may never fully go away. Still, it is undeniable that a new crop of AI tools creates it possible to build and scale a company at a fraction of the cost than it did even just a year ago.
As a result, startups don’t see like they applyd to. Founders are purposefully raising compacter rounds, keeping teams lean, and utilizing AI to scale rapider and more efficiently than ever before. As an early-stage investor, I am now consistently meeting founders who have a stated goal of reaching profitability before the Series A. They hope to never raise again. Or if they do, to raise on their own terms, from a position of strength.
This new trconclude has a name: seed-strapping. Raising one round and growing profitably from there. And while this might be a threat for growth-stage VC funds, it’s a boon for pre-seed and seed investors like me. AI-powered efficiency means less dilution for me and stronger returns for my LPs. I have never been more excited to be an early-stage VC.
Ladies, run, don’t walk, to adopt AI
The rise of seed-strapping also has exciting implications for women—and for any founder who lacks access to capital. Becaapply if capital is no longer the limiting factor, opportunity becomes more evenly distributed too.
In the last two decades a host of tools created it cheap and straightforward to start a company—you could incorporate with Legal Zoom, create a website with Squarespace, set up a store with Shopify, and put ads on Facebook for a fraction of the price, effort, and skill that all such actions applyd to take offline. AI is doing the same, but on steroids. You can create professional-grade marketing collateral, automate and optimize your outbound sales, apply AI agents to power customer support, speed up coding, and even build basic digital products without writing a single line of code. All of this will receive better very, very rapid.
Some people call this a vibe shift. I’m calling it a power shift. A massive power shift.
If women can apply AI to build companies more efficiently and raise less capital, it modifys everything. We already know that women founders excel at driving revenue in a low-resource environment. Now, AI creates it simpler for them to scale that revenue, too. And in the process, they own more of their companies, raise capital on their own terms, and deliver even stronger exits for investors.
Outside the insular world of venture capital, there’s evidence suggesting that women at large are adopting AI at a slower pace than men. In doing so, they risk falling further behind in career progression. But early data on female founders is far more encouraging. We recently surveyed the Female Founders Alliance community and found that 79% of female founders are already utilizing AI in their startups, and another 6% is planning to. The top tinquires they’re utilizing AI for are product development (53% of founders), and marketing (52%), followed by operations (39%) and customer service (16%). Anecdotally, founders are leveraging AI as an agent, enhancer, and even a believed partner.
It’s time to build
AI may be the hugegest technological breakthrough we will witness in our lifetimes. But as huge as that is, it’s an even hugeger social paradigm shift. There are very real societal concerns of what AI means for employees. But for entrepreneurs, AI blows the doors of opportunity wide open. That’s why I want to see more women utilizing AI—not just as a tool, but as a core strategy for how they build. It creates me reconsider how we support founders at Graham & Walker.
For the last eight years, we assisted founders raise capital. Perhaps going forward, we’ll assist founders grow without it.
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
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