As more digital health companies get funded with eyebrow-raising amounts of capital, female founders are still dealing with a challenging landscape.
“Being a female founder and CEO is a high bar to clear,” says Feyi Olopade Ayodele, CEO and founder of CancerIQ, a cancer-focused precision health tech company that just raised $14 million in Series B funding. “There are a number of ideas out there worth funding from female founders and sometimes it feels like [the message is] the person who should be solving this problem should look more like a traditional CEO and founder, aka a white male who has done this several times before.”
Ayodele, who started CancerIQ with her mother, Dr. Olufunmilayo (Funmi) Olopade, said that at every milestone of her career and tenure with CancerIQ, she’s had to continuously prove why she’s the right CEO to move the company forward. She’s used a data-driven approach to show investors how her company is improving outcomes for its health system customers, which helps show she is the right person for the job.
“If you want to buck the trend, you have to outdo every competitor with metrics,” Olopade said. “Even if someone doubts me as a woman or a black person, the numbers don’t lie.”
Challenges in funding
Funding remains a significant issue for female founders. Digital Health Business & Technology examined the top 20 venture capital funding deals of Q1 2022 as of March 28 and found that only one company (Wheel) was led by a female CEO. Only two of the top 10 digital health funding deals in 2021 were for female-led companies. According to a report from Rock Health, 62% of digital health companies founded by men are venture-backed versus 40% of companies founded by women. On the flip side, 38% of women founders have had to bootstrap finance their companies with minimum resources their companies versus only 14% of men.
Kristen Valdes, CEO of b.Well Connected Health, said challenges remain for female founders searching for funding. “Despite the fact that women are the primary decisionmakers and consumers in the healthcare market, female founders represent a shrinking amount of funding dollars. It’s such a small part of the overall funding landscape. We’re still not getting it right,” she said.
Across the venture capital landscape, according to data from PitchBook, in the record-breaking funding year of 2021, only 2% of the money went to companies with female only founders, 15.6% went to companies with male and female founders, and 82.4% went to companies with only male founders.
Valdes is encouraged that the problem is being talked about more frequently. She credits several firms taking steps to address the problem and said to out-grow any potential inherent bias, need to be more intentional and equitable in their selection process.
“If you look at the questions that are asked of male founders, it’s often about upside. Where can this company grow to? How are you thinking about valuations and exit? When women are asked questions, it’s often about downside risk. What are you going to do if this happens? The conversation is already detrimental based on who you are talking to,” Valdes said.
Diverse leadership teams
The problem in funding connects with the overall lack of gender equity in healthcare leadership. A recent study in JAMA Network Open found that women hold only 15% of the CEO positions in both health systems and health insurance companies, despite the fact that 65% of the healthcare workforce is female. In senior executive roles, women on average filled between 20-30% of the roles. The two exceptions were marketing/communications officer and human resources officer, where women represented more than 50% of the executives at health systems and insurance companies.
Bettina Hein, CEO of juli, an AI-enabled personal health platform, is a serial entrepreneur who sold her first company to Nuance for $125 million. Hein, who is a judge on the Swiss TV version of “Shark Tank,” is very cognizant of the lack of opportunities for female founders in the tech world from her experiences in entrepreneurship.
“When I started and built my first company in Switzerland, I didn’t know a single other female tech entrepreneur in the entire country,” Hein said. “I came to Massachusetts and there were more, but in ad tech, where I was the CEO of my second company, there were only two other CEOs. That’s an embarrassment.”
At juli, Hein is trying to engender a culture more welcoming to females and people of color to try and deal with these challenges. More than 50% of the company’s employees are female or a person of color, along with similar representation on the executive team and within the advisory board. Hein and fellow co-founders, Bettina Duehrkoop, Joris Straatman and Dr. Joseph Hayes, are recruiting a diverse array of employees.
“I didn’t want a bro-grammer shop,” Hein said. “I never had them because as a female CEO, you don’t have the right pheromones. My companies have always been a home for older, LGBTQ and female developers.”
Ayodele has similarly built up a leadership and employee base that is more equitable in both gender and race to better represent the people they serve. In her experience, diverse employees and executives are also more likely to flock to companies where equity in leadership is a reality. She would like to see more investors not just give female digital health founders more opportunities but to get involved with the building up of such companies.
“My series A investors really became part of my management team,” Ayodele said. “They were great coaches. They really helped me with recruiting and became an extension of me hadn’t been through certain stages of company growth on my own. To level the playing field, there’s not only a need for cash but for their experience to surround these founders.”