By Dana Denis-Smith.
I am not a ‘list’ person, but there is one list I have been updating religiously since January 2020 – this is a list that tracks every raise by female founders in the legal sector compared to all rounds announced publicly. Finally, in 2022, notable changes appeared on the horizon as not one, but three of the women-founded businesses I have been following over the years have crossed the US$10m raise barrier, even before the year is out.
A good number of the others I have started to come across as suppliers to large corporates and are getting more traction – investing and buying from us are critical steps if women are to scale up, not just start up, in business. I can feel the acceleration and I have no doubt that it is because this issue is in the spotlight and the quality of businesses women run is high and they are finally being valued and rewarded for it.
I started looking into where were all the female founders because, as a founder myself, I was troubled by their absence – in client pitches, in legal conference rooms, from the legal tech news cycle that announced bigger and bigger rounds of fundraising but seldom involved any raise of note involving women. The picture seemed to be the same every time – a group of men announcing they attracted big cash – and I was keen to benchmark female founders against this background of a buoyed legal tech investment market. Were female founders starting businesses and how were they financing those?
In early 2020, when I first considered how much women had raised – especially in legal tech – the answer was 0.8% of the total. This was well below the global averages that tended to land around the 2% mark. In the UK, the picture was dire – a name stood out, Julia Salasky, who founded Crowdjustice and managed to attract US$2m, but no one else had managed to cross the US$1m raise and attracted VC investment – all their businesses were angel backed and, usually, they don’t publicise their round size. The average was about US$150,000, according to what they submitted in an anonymous survey I carried out in March 2020.
None of the businesses with only female founders had raised above the US$10m mark globally either by March 2020, while a few of the bigger raisers – like Haley Altman, who raised US$3.7m for Doxly by 2018 – exited. Most hovered around the US$1m mark still. Odds improved significantly for women who were co-founders with men, but for female-only founder teams, the picture did not look encouraging and many told me in response to a worldwide survey I carried out that they simply self-funded rather than tried to fundraise.
And then, in late 2020, a breakthrough finally came – Priori Legal, a marketplace with two women co-founders raised US$6.3m to accelerate growth. In the middle of the pandemic, the message they sent through wasn’t just that women had started to be noticed and were gaining significant backing from investors, but importantly they spoke up about the experience of being a female founder in the legal sector. “As an enterprise technology company founded by two women, who also happen to have families with young children, we wanted to voice our experience to colour the broader narrative”, they said as they spoke publicly about the fundraising process and their growth to reach Series A.
But, as the saying goes, one swallow does not a summer make! My list was not filling up with any great speed during 2021 as women were starting to raise more, but still not anywhere near the sums we were hearing about in male teams. 2021 saw the largest ever investment into the legal tech sector – US$2.5bn. The top 5 fundraisers being Rocket Lawyer, (US$223m), Verbit (US$157m), Notarize (US$130m), Clio (US$110M) and Icertis, (US$80m). Ironclad raised US$181m in 4 years when its Series D went through in 2021 at US$100m – more than all the money raised by all female founders in law, ever! All these top raisers had one thing in common – they had no women in the founding team.
The pace started to accelerate in May 2022 – Pocketlaw, a four-year-old business with two women co-founders raised its €11m Series A. The fresh capital injection brought the company’s total amount raised to €14m. Julia Salasky’s Legl raised US$18m in May also – finally a female founder raced across the Series B line. And a few days ago, Priori Legal announced its $15 million Series A-1 financing round. This, I must admit, has made my list finally fire up!
This is a lot of change for the better for women who look to scale up their legal businesses, not only because we finally see women in the Series A and beyond breaking through, but because they also showcase just how diverse their products are – from SME services by Pocketlaw, to law firm operations in Legl, and then inhouse support from Priori. They solve problems across the legal market and that is exciting!
Barack Obama said that “although the principle of equality has always been self-evident, it has never been self-executing.” And, if you follow the journey of these female founders into scaling up, it is evident that they understood the maths behind raising, they went through the stages of investment and they build a community of supportive and knowledgeable investors around them along the way. Importantly, some also shared candidly their experience of the good, the bad and the ugly in how female founded businesses are undervalued and underinvested and therefore do not display the ‘hockey stick’ growth trajectory expected to be attractive targets.
If you also happen to be mothers to young kids, as Priori’s Basha Rubin put it recently, then you have less time to build powerful networks in early stage capital funding because ‘a lot of that socialising happens outside of work hours, and we can’t be out building those connections.” These recent raises show other women not only that it can be done, but how to do it.
About the author:
Dana Denis-Smith is an entrepreneur, ex-lawyer and journalist. She founded Obelisk Support to keep City lawyers, especially mothers, working flexibly, around their family or other personal commitments and to provide clients with an affordable and quality legal support solution onshore.
In 2014, she founded a unique history project – first100years – charting the journey of women in law through a video social history, @first100years.