Women-founded startups raised 500 million (AUD) in funding from 2017 to 2021, but accounted for just 4.4% of investments. What do the numbers mean and why does it happen?

Women have it tough in business—there’s no arguing that. After all, just 44 of CEOs in Fortune 500 companies are women. Meanwhile, there are 239 VC-backed companies worth over a billion dollars around the world. But of those businesses, less than 25 have women founders.

Even the few women-founded startups that exist still face an uphill battle. In Australia, companies with at least 1 woman founder secured $5.8 billion in funding from 2017 to 2021. But only 4% of funding went to startups with women-only founders. That means that of the total $25 billion VC investments, women-only teams received just $1 billion in funds.

Women-led startups are out there and can raise a significant amount of money, but they’re still getting a minimal slice of the pie. And it begs the question—why is that happening? And perhaps more importantly, what can we do to address this problem? 

What are the Numbers on Women-Led Startups and Funding?

There exist a handful of “unicorns”—companies funded by venture capital, which are valued at over $1 billion—with women founders. Globally, there are 24, with Didi, Grab, and Cloudflare having some of the highest valuations. But when you consider that there are 200+ VC-backed companies valued higher than a billion, that number suddenly becomes surprisingly small.

In Australia, the stats are similar. Out of all the completed deals in 2021, only 8% were with startups with all-women founding teams. In terms of absolute dollars, just 5% went to women-founded companies. The number goes higher when it comes to mixed teams; 31% of total venture capital deals were with startups with at least 1 woman founder.

Of those startup companies, over $800 million of absolute money went to just two companies—Canva and Airwallex. Just three other startups with women founders raised more than $50 million. In total, those 5 companies accounted for about 40% of total funding that went to women-led startups.

It’s a little disheartening, especially when you take note that those numbers are down from the previous year. And when you scale it up to a longer period of time, the bigger picture isn’t much better.

In terms of private funding, the total amount of private investments from 2017 to 2021 amounted to $10.9 billion. But women-only startups received only 4.4% of that investment. The stats are slightly better for companies with a mixed-gender founding team, accounting for 35.5% of VC investments.

On the other hand, in terms of public funding, both mixed-gender teams and women-only teams secured just 7.4% of total funds in the same time period.

Part of the problem starts from the meeting point. There’s been some improvement following dedicated office hours for women founders, but the percentage of founder meetings sits at just 23%. But only 7% of engagements progress to the third meetings.

But the fact that mixed-gender and male-only founding teams receive a much larger percentage of funding than women-only teams is reflective of deeper issues. There is plenty of inherent bias in the startup industry, with many factors involved regarding fewer investments in women-led firms.

How Industry Biases are Affecting VC Funding

On the Electric Ladies podcast, Jenny Kassan notes that “venture capitalists have a very particular way that they like to invest.” In other words, Venture capitalists prefer investing in companies that have accelerated growth, with a plan for a liquidity event in the future. These companies position themselves as attractive acquisition targets for even larger companies.

By contrast, women-led startups focus more on sustainability and stability. They’d rather maximise the benefits for their stakeholders while growing at a steady pace, versus growth at any cost. This means that they’re not attractive prospects for VC investment.

There are also underlying prejudices and systemic hurdles that prevent women-led startups from connecting with and gaining the attention of VC firms. Some of these obstacles include:


  • Selection bias: Women founders feel like they have to be pitch-ready for the initial contact when firms may be happy to talk at an earlier stage.
  • Systemic lack of access: Women-led groups may have a hard time getting meetings since VC firms source leads primarily from other VCs, news articles, and online research—all of which can be already biased against women.
  • Lack of diversity in VC firms: In 2020, just 12.4% of decision-makers at VC firms were women. Of the 351 total firms, 213 did not have any female decision-makers at all.


It’s clear from this that the industry itself is systemically built in a way that makes it difficult for women-led groups to gain funding. If women can’t even get first or second meetings, they can’t pitch their startup and therefore can’t get funding. For those who do make it past the first meeting, they face decision panels that do not reflect their identities, or that already view them from a sexist perspective.

Regarding systemic obstacles, venture investor Del Johnson theorised that the majority of male brokers keep out women-led startups that do not follow traditional patriarchal views. Meanwhile, serial entrepreneur Gentry Lane believes the problem is simple—systemic misogyny. 

Take Jessica Ruhfus’ experience, for example. She’s the founder of Collabosaurus, a brand collaboration platform. Ruhfus was actively seeking VCl backing between 2016 to 2018, but faced a swathe of prejudice. According to her, investors would ask “when she’s planning on having children” or tell her to “ham up the fact that she was a woman under 30” since it was her only selling point.

Meanwhile, Jax Garrett—founder of GGWP Academy, an eSports content startup—also faced plenty of sexism. Investors would tell her she needed a male co-founder in order to succeed, and that she was simply a “mum with an idea.” She was also pushed towards specialist funds that specifically back women entrepreneurs.

There’s also the issue of virtue signalling, in which VC firms will host events that “help” underrepresented founders but won’t actually fund them. They gain points for showing support without actually financially and socially supporting these minority groups.

How We Can Start Investing in Women Entrepreneurs

The good news it that the landscape is changing. Back in 1995, no companies led by women received VC backing. Today, VC firms are starting to make changes. Startmate, for example, started the Small Bets fund dedicated to early-stage companies with minority founders.

Square Peg has also been improving representation and diversity internally, while engaging in meetings with women founders more and increasing investments. The onus is definitely on VC firms to overcome their internal biases and reach out to women-led startups, who may not have the connections or ability to meet them halfway.

The economic effects of investing in women are well-documented. In fact, the estimate is that supporting women as entrepreneurs would add $5 trillion to the global economy. Meanwhile, startups founded or co-founded by women perform better over time; they generate 10% more in cumulative revenue over a 5-year period.

There are other options, of course—equity crowdfunding, for example, lets like-minded people back your endeavours. There are also revenue-sharing groups such as Shebacks.me. But for those who prefer more traditional VC funding, the industry needs to start changing faster.

Women entrepreneurship can change the world, even beyond the boost to global GDP. There’s a wealth of new ideas, products, and services that we’re missing out on because venture investors are reluctant to change their perspectives on women-led startups. Closing that gender gap in VC funding could redefine the startup market—and ultimately, redefine the global future.

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