Backed by Data, Not Bias: The Case for Funding Female Founders
In 2023, startups with all-female founding teams received just 2% of total venture capital funding globally, despite clear evidence that female-led companies often outperform their male-led counterparts in key business metrics.[1] The gender gap in startup financing isn't just a diversity issue, it's a business inefficiency. For Small and Medium-sized Enterprises (SMEs), especially those led by women, understanding the dynamics behind this disparity is key to building resilience and driving change.
The Funding Disparity:
Despite increasing attention to gender equity, female founders continue to face significant funding hurdles. Compared to all-male teams, women-led businesses:
- Receive significantly less funding at both early and growth stages.
- Are more likely to be asked risk-averse questions by investors. [2]
- Often lack access to the same financial networks and mentorship channels.
Studies show that female founders are more likely to bootstrap their businesses or rely on personal savings. These barriers slow growth and limit access to essential resources.
The Business Case for Investing in Women
The underfunding of female founders isn’t just unjust, it’s economically shortsighted:
- Startups founded and co-founded by women generate 10% more cumulative revenue over five years.[3]
- Women-led companies deliver higher returns per dollar invested (78 cents of revenue per dollar invested, as opposed to just 31 cents for those led by men).
- Diverse leadership teams drive innovation and are better aligned with today’s diverse consumer base.
In other words, backing female founders is a sound business strategy with proven returns.
Real-World Examples of Female Founders Breaking Barriers
Whitney Wolfe Herd – Bumble (USA)
After leaving Tinder, Wolfe Herd launched Bumble with a mission to put women first in the dating world. She took the company public in 2021, becoming the youngest self-made female billionaire in the U.S. at the time of Bumble’s IPO.[4]
Anne Boden – Starling Bank (UK)
Founder of Starling Bank, Anne Boden built one of the UK’s top digital challenger banks. While facing resistance from traditional investors early on, she scaled the company to over three million customer accounts and profitability by 2022.[5]
Melanie Perkins – Canva (Australia)
Melanie Perkins co-founded Canva after facing multiple rejections from investors early in her entrepreneurial journey. She grew it from a bootstrapped startup into a global design leader. Today, Canva is valued at over $40 billion and is celebrated for its inclusive leadership, with gender balance embedded across the executive team[6]
What Female Founders Can Do
While structural barriers persist, female founders can proactively increase their chances of success:
- Tap into Women-Focused Funds: Explore platforms like All Raise, Female Founders Fund, and Coralus (formerly known as SheEO) that prioritize gender-diverse investments.
- Perfect Your Pitch: Tailor pitch decks with strong financials and growth metrics. Anticipate investor concerns and respond with data.
- Seek Alternative Funding: Consider grants, crowdfunding, and non-dilutive options like revenue-based financing.
- Build Advisory Networks: Connect with mentors and advisors who understand the fundraising landscape and can open doors.
At Creativa, we are focused on technical market research, strategic planning, and capital advisory; and can help bridge the knowledge and access gap female founders often face.
Rethinking Capital, Rewriting the Norm
The gender funding gap won’t close overnight, but we can accelerate progress with intentional action. Supporting women-led businesses isn’t just about fairness, it’s about unlocking untapped innovation and value.
As financial advisors to growing companies, we encourage female founders to reach out for support on funding strategy, growth planning, and financial analysis. The future is diverse, and it’s already underway.
Sources:
[1] https://www.weforum.org/stories/2024/03/women-startups-vc-funding/
[2] https://www.cems.org/news-events/news/investigating-gender-gap-early-stage-funding
[3] https://web-assets.bcg.com/img-src/BCG-Why-Women-Owned-Startups-Are-a-Better-Bet-May-2018-NL_tcm9-193585.pdf
[4] https://www.forbes.com/profile/whitney-wolfe-herd/
[5] https://www.mckinsey.com/industries/financial-services/our-insights/the-journey-of-building-a-neobank-from-the-ground-up
[6] https://fortune.com/longform/melanie-perkins-canva-founder-ceo-interview/
