For as much as women like to think that in these modern times they have shattered the glass ceiling when you actually crunch the numbers, women entrepreneurs still face struggles that their male counterparts do not have to worry about. All things considered, the list is long, but the most pressing of these issues is women’s need for capital, and the disparate ways in which female-led companies are funded. Whether it is a case of “boys will be boys”, or simply doing things the way they have always been done, the tide needs to shift to give women the change and the capital they need and deserve in order to bring their entrepreneurial dreams to fruition.
The story is rather bleak. Despite the fact that there is more funding going to all-women entrepreneurial teams than in years past, there is still a disparity between female-led businesses receiving fewer investment and lending opportunities than their male counterparts. According to Forbes Magazine, women-led startups received just 2.3% of venture capital funding in 2022. This paltry amount is even more appalling than the fact that only 12% of decision-makers at venture capital firms are women.
So what are women doing to get the funding they need? Common knowledge says that women will tend to have better outcomes if they look for investments from female venture capitalists, as “female VCs are twice as likely as their male counterparts to fund women-run businesses.” However, this tactic can also backfire, as female-to-female investments can lead to the presumption that the money was given solely because of gender, rather than skill or business plan. This can make subsequent funding difficult to obtain.
Although women helping women seems like a positive situation at first glance, research published in Organization Science, which examined 2,136 startups tracked by the Crunchbase database (a data source for startups and investment activity), says otherwise. “In fact, women-founded businesses that received funding from female VCs were two times less likely to raise…