The Gender Investment Gap

As a female founder in the agriculture industry, a sector with predominantly more male representation than female, I’ve been exposed to stereotypes and discrimination and consistently encountered additional challenges to my male counterparts. More needs to be done to break the bias and act for equality, supporting female founders in the same ways as male founders.

Numerous reports indicate that access to venture capital funding is historically much more difficult for female founders, and with the broader venture capital industry facing serious challenges throughout 2022, female founders are once again being disproportionately affected.


Analysis from PitchBook in its 2021 All In Report found that during the onset of the Covid-19 pandemic, female founders received fewer investments than their male counterparts. As part of its latest All In Report, PitchBook reports that up to Q3 2022, this year is already the second biggest for venture capital-backed female founders in terms of deal value. However, there are still several unnecessary challenges faced by founders looking to raise money as a female.

In early-stage companies, female founders have median valuations at least 8% lower than male founders, and this increases to 30% when looking at median-stage companies as of 30 September 2022.  As well as this, year-to-date deal value allocated to female-founded companies was less than 3% of the total deal value allocated to male-founded companies, proving there is still a very long way to go to close the valuation gap between female and male-founded companies.

The funding gap

A study by Innovation Finance Advisory prepared for The European Commission presented evidence of a persistent funding gap between male and female entrepreneurs, with female-led start-ups not being funded on an equivalent basis to male-led start-ups. The combination of a lack of female representation in founders and investors, a gender investment bias and risk aversion create a challenging environment for female founders to succeed. At every investment stage, the consistent underrepresentation of women in investment decision-making roles at venture capital firms is at the source of the funding gap. Action is needed to break the vicious cycle of unconscious biases created between female entrepreneurs and the investor community.

The Investing in Women Code Annual Report 2022 from the British Business Bank highlights how the challenges faced by female founders is not only impacting their funding journey but their willingness to apply for financing. During 2021, only 12% of all pitch decks received by venture capital investment companies signed up to the Code were from female founders, compared to 64% from male founders. In addition to this, of those pitch decks received from female founders, only 9% received funding compared to 66% of their all-male counterparts whom also applied for larger amounts of financing, with the average approved loan amount 52% higher than for females.

Female to female follow-on funding

In addition to the challenges faced by female founders at their initial funding rounds, research published in Organization Science found female founded firms that receive funding from female venture capitalists face more difficulty in future fundraising rounds than those funded by male venture capitalists. However, male founders were likely to raise future funding regardless of the venture capitalist gender at first round.

Better investments

The Boston Consulting Group (BCG) published its 2018 research report on why women-owned start-ups are a better bet in partnership with MassChallenge which again highlights the “gender investment gap”, even pre-pandemic. As well as showing a clear gender gap in new business funding, the research also highlights the higher revenue streams delivered by female founders making them better investments.

Female founded companies delivered more than twice as much per dollar invested than male founded companies, evidencing that females in leadership roles outperform males, and yet they still don’t have access to the same levels of funding. In its review of five years investment and data revenue, the BCG found the average investment in female founded companies was $935,000 compared to an average of $2.1 million in male founders. Despite this, for every dollar invested in female founded companies they generated 78 cents and their male counterparts generated only 31 cents.

Driving change

Ultimately, the people who have the greatest power to drive change are those providing the funding, the venture capital and private equity firms. For too long the issue of diversity in the venture space has not been addressed but with more than $500 billion investment capital available across the global venture capital industry and 15,652 deals completed in the first half of 2022, now is the time for a new approach.

As a female founder, I will keep fighting for equal investment opportunities and fair treatment from investors to mitigate the impact of gender bias on the success of future businesses.  

Angela de Manzanos Guinot

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