Why Venture Capital Needs to Back Female Founders

By / / 2 minutes of reading

For the past 30 years, just 2.4% of venture capital funding has gone to businesses founded by all-female teams. That figure is almost identical to what it was in 2018, when it stood at 2.3%. Progress, it seems, has stalled.

Working in interim recruitment within a male-dominated industry, we see the issue up close. Talented individuals are routinely passed over, not because they lack ability, but because they don’t fit the expected mould. It’s not a question of merit. It’s a question of bias.

Research from Harvard Kennedy School’s Women and Public Policy Program lays bare the structural barriers that female founders face. Despite delivering equal performance outcomes, women-led ventures receive only a quarter of the funding they seek. In contrast, male-led ventures receive half.

Apart from the need to address basic inequity, there are plenty of reasons to tackle the gender chasm in venture capital. The biggest is the chance to unlock economic gains. – Henadi Al Saleh

This isn’t about capability. It’s about pattern-matching, biased pitch evaluations, and exclusion from the networks where decisions are made.

What’s more, the data shows that diversity delivers results. Venture capital firms with just ten percent more female investing partners see a 1.5 percent increase in fund returns and nearly ten percent more profitable exits. So why are we still failing to invest in equity? Why don’t we back more female founders?

Why Back Female Founders?

Unconscious bias training alone won’t fix this. We need to address the deeper, systemic issues that shape the industry. That means:

  • Creating standardised pitch processes to ensure fairness
  • Tracking diversity metrics to measure progress
  • Holding investors accountable for their funding decisions

Everyone has a part to play. Whether you’re hiring, investing, or mentoring, you can help reshape the ecosystem. Advocate for inclusive practices, amplify underrepresented voices, and push for transparency in how decisions are made. – Emily Denney

Innovation thrives when we open the door to all kinds of talent. It’s time to stop leaving potential on the side-lines and start building a venture capital landscape that reflects the world we live in.

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