2% and Stuck: The Unchanging Reality of VC Funding for Women
Where's the Investment? The Ongoing Underfunding of Female Entrepreneurs
Despite years of discussions about diversity and inclusion, the needle has barely moved for women-led startups seeking funding.
As of 2023, startups founded exclusively by women in the United States raised a mere 2% of the total venture capital invested, a figure that has remained stubbornly stagnant since 2017. This dismal statistic is mirrored in Europe, where women-only founded startups secured just 1.8% of total VC funding in the same year.
Despite the proven potential and performance of female-led businesses, the venture capital world continues to overlook and underfund women entrepreneurs, leaving billions in potential economic growth untapped and perpetuating a cycle of gender disparity in the startup ecosystem.
So let’s break the mould.
In this article, we are examining VC Funding for Female-Founded business!
Here are extensive statistics from reliable sources from 2024 latest reviews:
Venture Capital Funding
In Europe, startups founded solely by women raised just 1.8% of the total capital invested in venture-backed startups in 2023 1.
In the United States, startups founded exclusively by women raised 2% of the total capital invested in VC-backed startups in 2023 1.
Women founders and co-founders in the U.S. secured 22.8% of all VC money in 2023, up from 18.7% in 2022 2.
All-female-founded companies in the U.S. raised $3.2 billion from VCs in 2023, compared to $114 billion raised by all-male-founded companies 2.
In 2023, startups founded exclusively by women in the United States raised only 2% of the total venture capital invested 12. This percentage has remained stagnant, showing little improvement since 2017 4.
All-female-founded companies in the U.S. raised $3.2 billion from VCs in 2023, compared to $114 billion raised by all-male-founded companies1.
The 30-year average for VC funding going to all-female-founded startups has been 2.4%, indicating a persistent gender gap in startup funding 4.
It's worth noting that when including startups with both male and female co-founders, the numbers improve slightly:
Women founders and co-founders in the U.S. secured 22.8% of all VC money in 2023, up from 18.7% in 2022 1.
This broader category raised $34.4 billion in 2023, down from $44.2 billion in 2022 and $61.5 billion in 2021, reflecting an overall market slowdown 1.
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European Statistics
In the European Union, women-driven companies received a record €5 billion in VC funding in the first three quarters of 2018, up from €1.1 billion in 2010 5.
The EU has seen improved compound annual growth rates for venture investment in women-led companies compared to the US and Israel 5.
In 2017, women-led companies in the EU secured 11% of overall VC invested, compared to 2% in the US and 28.3% in Israel 5.
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Global Statistics
Globally, if VCs invested in women at the same rate they invest in men, it could boost the global economy by 3-6% ($5 trillion) 8.
Investment in startups with at least one female founder outperformed all-male founding teams by 63% 8.
Female Entrepreneurs and Startup Founders
The number of female tech founders in Europe remains under 15% 7.
In the top 25 European cities ranked, an average of 25% of tech jobs were held by women 7.
The percentage of women over the total number of founders of Deep Tech startups in Europe has doubled from approximately 7% in 2010 to 14% in 2022 9.
The percentage of Deep Tech startups with at least one woman in the founding team has grown from about 12% in the early part of the last decade to about 23% in the early part of this decade 9.
Performance and Impact
Last year, female founders generated 35% higher return on investment than their male counterparts 8.
Women-led teams are more collaborative, communicative, and open to learning, with half of Americans preferring to work for a female-led company8.
These statistics highlight the persistent gender gap in entrepreneurship and VC funding, while also showcasing the potential and performance of female-led businesses when allowed to thrive.
Top European countries for funding female-founded startups are
Based on the most recent data available, the top European countries for funding female-founded startups are:
United Kingdom: With almost €4 billion invested across nearly 720 deals for women-founded companies in 2023, the UK leads Europe in both deal value and volume 2.
France: Ranking second, France invested €1.7 billion across 276 female-founded companies in 2023 2.
Spain: While specific funding amounts are not provided, Spain is mentioned as the third country in the EU with the highest number of companies founded by women 1.
Sweden: Although not leading in total investment, Sweden stands out with 15% of VC funding going to female-led companies, which is significantly higher than other European countries 3.
It's worth noting that the landscape is evolving, with some countries showing promising trends:
Central Europe and Anglo-Saxon regions dominate funding for women-founded deep tech startups, followed by Northern Europe5.
The Netherlands, Italy, Finland, and Belgium are also among the countries with higher representation of women in deep tech startups8.
Despite these positive indicators, it's important to note that women-founded companies still receive a disproportionately small share of overall venture capital funding in Europe, with only 9-11% of the total VC funding going to women-founded companies 1.
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Additional relevant statistics from the World Economic Forum and other global organizations
In Europe, startups founded solely by women raised just 1.8% of the total venture capital invested in 2023 1.
In the United States, startups founded exclusively by women raised 2% of the total venture capital invested in 2023 1.
Globally, if venture capitalists invested in women at the same rate they invest in men, it could boost the global economy by 3-6% ($5 trillion) 1.
Women started 49% of new businesses in the US in 2021, up from 28% in 2019 2.
Women made up 47% of US entrepreneurs starting businesses in 2022, compared with 29% prior to the COVID-19 pandemic 3.
Globally, the share of founders grew by 45% in 2020 for women and by 32% for men, compared to the previous year 4.
While the search results don't provide specific statistics from the UN, World Bank, Bank of England, or IMF, they do offer some relevant global insights:
In Africa, businesses led by women accounted for only 1.5% of the total funds raised by startups between 2019 and 2023 1.
In Asia Pacific, less than 6% of startups have women founders, according to Google 1.
The Global Entrepreneurship Monitor found that one in three women entrepreneurs in low-income countries were growing their businesses, compared to one in four women globally 1.
These statistics highlight the persistent gender gap in entrepreneurship and venture capital funding globally, while also showing some positive trends in the growth of female entrepreneurship in recent years.
Note: Infographics by Napkin AI and sources checked via Perplexity AI.