4 ways female founders can gain more access to funding

We can all agree: one of the main goals of any founder is to fund their dreams of changing the world and making it a better place - female founders too. We can also agree that investors want to invest in the companies that are going to yield the best financial returns.

It seems obvious then that we would be able to match these two complementary goals together and fund thousands of business ideas from female founders. But the data shows us a very different reality. 

In 2022, companies founded solely by women garnered 2% of the total capital invested in venture-backed startups in the US. Female entrepreneurs receive only about 2% of all venture funding, despite owning 38% of the businesses in the country.

The statistic below is especially alarming: when there was a male co-founder, VC capital shot up to 15%. What the what?!

Sad but true: women who venture into entrepreneurship are not poised to get a fair deal.

There’s a lot of inherent bias when it comes to investing in a female founder. I’d go so far as to say that the bias run rampant. And this bias within the VC industry is preventing capital from being allocated to the best investment opportunities.

So how can we root out this bias and present ourselves in the most effective way?

Having more open, candid conversations is the first step to creating an equal playing field. But until we can change the world on a macro level, there are some things women can do now — on a micro level — to help boost their chances of accessing capital.

1. Understand investor biases and gender stereotypes

In one sample, male-led startups raised 5X more funding than female-led ones. We thought when more females became investors or lead VC firms we’d start to solve this problem.  However, statistics still show pervasive gender stereotypes and major gaps in access to funding.

Why is that?

Part of the reason is the traits (and subsequent biases) that are socially ascribed to males and females. 

For example, we think of men being more ambitious, logical, direct, assertive, self-confident, and individualistic. We have a tendency to attribute all of these traits to success, or successful and effective leadership.

When it comes to women, typical traits are more warm, affectionate, expressive, helpful.