In the competitive world of startups and venture capital (VC), female entrepreneurs are making their mark despite significant challenges. Change is on the horizon. While systemic biases have long hindered their access to funding, organisations like ChangeSchool, and targeted initiatives are rewriting this story . This article explores the obstacles female founders face and the meaningful solutions that are shifting the landscape.
The Current Landscape: Progress and Persistent Challenges
Female entrepreneurship is growing, but the funding gap remains substantial. In 2024, companies with at least one female founder secured just 22.7% of total VC deals—down from previous years and the lowest level since 2017. In Europe, women-founded startups received only 2.4% of total VC funding, despite women accounting for almost 40% of startup owners.
Yet, female entrepreneurs continue to innovate and persevere. Many have embraced alternative funding avenues, including bootstrapping, crowdfunding, and angel investments, while the traditional VC landscape evolves. Eleanor Kaye, Executive Director of the Newton Venture Program, encourages female founders to tap into networks of female VCs and social impact investors who prioritise businesses with diverse leadership.
Why Does the Funding Gap Exist?
The funding gap persists due to several interrelated factors:
Bias in Investment Decisions: Investors often assess entrepreneurial traits such as risk-taking and leadership through a traditionally masculine lens, leading to an unconscious preference for male founders.
Lack of Representation: Men hold 91% of decision-making roles in VC firms. This imbalance often results in male-led businesses being perceived as safer investments.
Network Disparities: Male-dominated funding networks exclude many women from informal introductions and relationship-building opportunities critical for securing investments.
AI technology is also playing a role. While it can streamline decision-making, it can perpetuate bias if trained on historically skewed data. Research by the Alan Turing Institute found that female-led AI companies in the UK raised significantly less capital than male-led teams. Without careful intervention, AI risks reinforcing gender disparities.
A Movement for Change: Emerging Solutions
Despite the hurdles, female entrepreneurs, industry leaders, and organisations are taking significant steps to bridge the funding gap.
Targeted Support from Organisations like ChangeSchool
ChangeSchool is at the forefront of this movement, by equipping female entrepreneurs with practical training in investor pitching, market strategy, and business scaling. They foster connections with investors and mentors, building supportive networks that help women overcome systemic barriers.
Through mentorship programmes and networking events, female founders gain valuable guidance from experienced investors and entrepreneurs. This approach doesn’t just help women navigate the existing system—it empowers them to redefine it.
Increasing the Number of Female VCs
Efforts to bring more women into VC decision-making roles are gaining traction. Programmes like the Newton Venture Program are training female professionals to become VCs, diversifying the investment ecosystem. Studies show that female investors are more likely to fund women-led businesses, creating a cycle of opportunity and growth.
Bias-Detection Mechanisms in AI
To prevent AI-driven bias, investors and developers are implementing bias-detection tools that review and correct problematic algorithms. These tools help ensure that female entrepreneurs are evaluated on their business potential rather than outdated gender stereotypes.
The Power of Networks: Why Mentorship and Connection Matter
Community plays a crucial role in bridging funding gaps. For female entrepreneurs who lack traditional access to networks, dedicated initiatives can provide essential support. Eleanor Kaye suggests building diverse networks of mentors—including both men and women. “Having a variety of perspectives can be the difference between hesitation and action,” she shared during a recent ChangeSchool fireside chat.
Networking events are also becoming more inclusive, with platforms like Deal Room helping founders connect with investors who align with their business vision.
Building Momentum: Steps Female Entrepreneurs Can Take Now
While systemic change takes time, there are steps women can take to increase their chances of success:
Tailor the Pitch: Investors have varying priorities.
Founders should research potential investors and tailor their pitches to address what matters most—whether that’s social impact, growth potential, or innovation.
Leverage Alternative Funding:
Crowdfunding, angel investors, and impact investors can provide flexible capital, helping founders scale without the constraints of traditional VC funding.
Join Training and Networking Events:
Organisations like ChangeSchool offer training and strategic connections, leading to valuable introductions and funding opportunities.
A Vision for the Future
The funding gap is a reality, but the future holds promise. With tailored support, practical training, and increased awareness, female entrepreneurs can break down long-standing barriers.
As more women take on decision-making roles and AI systems become fairer, the investment landscape will continue to evolve. The key to sustained progress lies in persistence, collaboration, and innovation.
Female entrepreneurs have the vision, resilience, and talent to lead transformative change. By tackling today’s challenges, they are building a future where women-led innovation is not just recognised—it is celebrated.
ChangeSchool is committed to driving this progress, ensuring that female founders thrive in a more inclusive entrepreneurial environment. Read more on our entrepreneurship programs here