As we celebrate Women’s History Month, it is important to address the obstacles female founders continuing to face in securing capital. At FundingHope we find it unacceptable that only 2% of VC funding in the U.S. goes to female founders. We are committed to bridging the gap between impact investments and women founders dedicated to growing sustainable businesses. Investing in women founders is vital to achieving UN Sustainable Development Goal targets. Women founders are more capital-efficient as they bring in 20 percent more revenue than their male counterparts with half of the money, according to the Kauffman Foundation.
Investors who don’t make a conscious effort to invest in women founders, are likely missing out on a significant opportunity for a positive return on investment, as well as making a real impact investment that touches on numerous UN Sustainable Development Goals. Research shows that companies with gender-diverse leadership teams, led by women founders perform better financially and are more innovative than companies with less diversity. By not investing in women founders, investors may be limiting their potential for financial success.
Additionally, lower levels of investment in women founders perpetuates gender inequality and reinforces the idea that women are not as capable or deserving of funding as men. This can discourage women from pursuing entrepreneurship and limit their access to resources and opportunities.
Furthermore, the lack of investment in women founders also contributes to the gender pay gap and the underrepresentation of women in leadership positions. Investing in women founders can help address these issues and promote greater gender equity in the business world.
Overall, not investing in women founders can result in missed opportunities for economic development and innovation in rural and disadvantaged communities, perpetuate gender inequality, and contribute to future generations of women experiencing a lack of hope. The lack of investment into women-founded startups is a missed opportunity worth trillions of dollars. Crunchbase data has shown that in terms of funding to women founders, 2020 was among the worst years on record. On a global level, only 9% of all funds deployed to technology startups went to founding teams that included at least one woman. Solo woman founders and all-women teams raised just 2% of all VC dollars, Join the movement at FundingHope and help bridge the gap between women founders and sustainable finance.