Female co-founders generate 78% more revenue per invested capital compared to male counterparts, but surprisingly, they garner only around 20% of venture capital. This stark disparity highlights the persistent gender inequality engrained deeply in the entrepreneurial setting.
These hard-working women surpass their male counterparts in performance yet face continuous challenges in securing funding. This situation illuminates an unmistakable bias against women founders in the financial and startup sectors.
Another shocking statistic reveals that only 2% of venture capital funds are granted to companies solely owned by women. This figure doesn’t yet consider businesses with at least one female co-founder. Such statistics underscore the need for urgent measures to bridge this funding gap.
Equality in the corporate world should be promoted to ensure that women-led corporations get equal opportunities for funding as those led by men.
In the midst of these challenges, some women-led firms like Canva, under Melanie Perkins’ leadership, have broken through.
Persisting funding gap for female founders
Canva, valued at a whopping 26 billion dollars, is the highest valued venture capital-supported company headed by a woman. Melanie’s excellent leadership not only challenges societal norms but also revamps the scope of graphic design platforms.
All-women venture capitals like Forerunner Ventures, Cowboy Ventures, Acrew Capital, and Mary Meeker’s Bond fund have ensured that a female entrepreneur’s chances of acquiring funding increase when a woman is part of the investment team. They emphasize the importance of female representation in investment decisions and motivate other venture capitals to diversify their investment teams. They also provide more opportunities for women entrepreneurs, setting a precedent for the future generation.
A positive development shows that VC firms with at least a 10% representation of women offer 1.5% steeper fund returns and generate 9.7% more fruitful exits. This demonstrates the beneficial influence of gender diversity in venture capital firms.
However, only 11% of investment partners are women, signaling the urgent need to enhance gender diversity. In 2023, some progress was made with the promotion of 23 women to partners in VC firms, but the journey towards gender parity in this field is far from over.
