Female entrepreneurs and investors are building power networks to confront the male-dominated venture capital world that has historically excluded them from billion-dollar opportunities.
Just 2 percent of venture capital funding went to female-founded companies in 2023, the lowest figure since 2016, according to Pitchbook data. This represents a significant retreat from small gains made during the tech funding boom of the late 2010s.
“Women should feel empowered to start their own companies without raising venture capital,” said Jessica Rovello, CEO of Arkadium. “If the rules are stacked against you, change the game. Michael Bloomberg owns 88 percent of Bloomberg LP; I can’t imagine the next billionaire woman media mogul will get to that level by being beholden to some group of investors.”
The problem stems from the industry’s homogeneous leadership. Women make up only 9 percent of venture capital firm investment decision-makers, and 74 percent of venture firms had no female investment partners as of 2017. Without women in positions to evaluate pitches, unconscious bias often leads male investors to dismiss female entrepreneurs.
“The problem with venture capitalists not funding women-owned companies is rooted in the fact that so few VC firms have women senior partners,” said Rovello. She emphasized that female partners need to be “included in the pitch meetings and decision-making process.”
Rather than trying to break into established networks, women are creating their own paths forward. In India, Mydala founder Anisha Singh launched She Capital, an early-stage venture fund focused on female entrepreneurs. The fund concentrates on Pre-Series A and Series A startups in the consumer services tech space, with plans to invest in 12 to 14 female-led early-stage businesses.
Similarly, a group of women in education technology formed ElleCap, a network of women investors who gather to scale impact for their companies and entrepreneurs. “Networks are ‘a huge part’ of being successful in securing investment,” said one of the organizers, who noted that through connections made in the group, she has “secured deals, connected portfolio companies to growth investors, and received valuable advice and support.”
These female-focused networks may be onto something financially sound. First Round Capital studied 300 of their own investments and found that “female founders outperform their male-only founder teams by 63 percent,” a data point the VC firm called “meaningfully significant.”
High-profile success stories are also helping to shift perceptions. Female-founded companies like Birchbox, with its million global subscribers and $125 million in estimated annual revenue, demonstrate the market opportunity investors miss when overlooking women entrepreneurs.
Melinda Gates has made addressing this gap a priority through her organization Pivotal Ventures. “If they’re not seeing the latest innovative, disruptive technology because they don’t understand it or they don’t understand some things that women are spending money on, I think they’re not making great investments,” Gates has said.
The movement extends beyond America’s borders. The annual EU-Startups list of Europe’s most influential women in startups and venture capital highlights leaders like Eva-Valerie Gfrerer, who founded Berlin-based Morphais to “put the focus on the founder to build world-class companies.” Other notable names include Lina Chong, Partner at HV Capital specializing in SaaS and Web 3.0, and Roberta Lucca, Co-founder of BAFTA-winning Bossa Studios and an angel investor.
For emerging female entrepreneurs, the path remains challenging but increasingly navigable. Emily Best of the crowdfunding platform Seed & Spark offers a simple message for male investors: “Acknowledge that our physical differences may require different treatment.”
Women founders also advise looking beyond traditional venture capital. “Definitely go to female-focused funds and angel groups,” recommends Alyson Weeks, “but don’t feel like those are your only options if you’re a woman.”
As more women secure funding and build successful companies, they create a virtuous cycle for the next generation. Investor Masha Drokova summarizes the philosophy driving this movement: “Having more female investors will lead to more female founders.”