How lack of female funding alters the startup landscape

A recent survey conducted by Pink Salt Ventures, a UK venture capital firm exclusively focused on funding female founders, sheds light on the differential treatment experienced by male and female entrepreneurs in the investment landscape. 

The survey highlights various challenges faced by female founders, emphasising the need for investor-side reform. 

Pink Salt Ventures collaborated with Dr. Dana Kanze, an expert on gender bias in venture capital, and leveraged her expertise in compiling the survey data. Dr. Kanze is renowned for her TED talk on the inadequacies of female funding.

Survey highlights

The survey findings underscore the glaring disparities faced by female founders in their interactions with investors.

An overwhelming 97% of respondents acknowledged the existence of a fundamental difference in how investors treat male and female founders. The awareness of differential treatment can act as a disincentive for aspiring female entrepreneurs. This can manifest in less women applying to business awards and programs, and seeking venture capital. 

The perception that they will face biased treatment and limited funding prospects may discourage talented women from pursuing entrepreneurial ventures. This not only hampers the personal growth and empowerment of women but also deprives the business ecosystem of their valuable contributions.

Approximately 83% of respondents identified the absence of female decision-makers as the most significant barrier to funding, particularly during the post-seed stage of fundraising. 

By excluding female decision-makers, the investment community is missing out on the valuable insights and expertise that women bring to the table. Female founders often focus on addressing unmet needs or underserved markets, bringing fresh perspectives and innovative solutions.

A significant 76% of respondents believe there is a lack of awareness among investors regarding what constitutes a backable business. This knowledge gap may hinder female founders’ access to funding, as their business models and growth potential may be underestimated or overlooked.

And finally, among the surveyed entrepreneurs, 82% identified as first-time founders, while only 18% identified as serial entrepreneurs. 

88% of serial entrepreneurs started their entrepreneurial journey with a team, while only 58% of first-time founders did. 

This highlights the importance of support structures such as joint venture partners or mentorship opportunities for first-time female founders, who may face additional challenges due to their limited prior entrepreneurial experience.

A call for change

Pink Salt Ventures states: “This is a wake-up call for investors to take action to ensure female founders have the same opportunities as males. 

There is a huge opportunity to drive growth in the industry by backing underfunded talent. 

Generationally speaking, the pipeline of female entrepreneurial talent only continues to grow, and our research shows what the ecosystem needs and is asking for: more dedicated capital, networks and access to scale their companies.”

Conclusion

The research shines a spotlight on the disparities faced by female founders in the realm of venture capital funding.

The overwhelming consensus among respondents underscores the urgent need for change within the investment community.