The Gender Funding Gap in Startups

About this series

In 2023, 4% of all venture capital invested went to startups led by all-women teams. Just 14% went to startups led by mixed teams, and the other 82% went to male founders.

These stats have been reported on widely, and (in our experience) most women in this ecosystem know them by heart.

But do we really understand what they mean?

Of course, they’re a reflection of inequality in startups, and in ability to access capital in particular.

But there’s a complex web of systemic of challenges — societal, structural and discriminatory — that are stymying significant change.

In this content series, we’re pulling some of the threads and trying to unravel and understand where these barriers to women are coming from, and how they amplify and perpetuate each other.

First, we’re setting the scene and trying to understand what’s actually going on. Then, we consider the role of venture capital investors in all of this — what they can change and what, perhaps, is out of their hands.

We also unpack the economic opportunity we could be missing out on as a nation. When we don’t invest in women, how much wealth are we leaving on the table? Can we increase the size of the overall capital pie? Or do we have to redistribute the slices?

From pulling this series together, one thing that’s stood out loud and clear is that there’s no singular solution to the gender funding gap in startups.

Rather, what we need — and what Noga Edelstein, curator and driving force behind this whole editorial endeavour, is advocating for — is a broad, systemic approach to a broad, systemic problem.

Individual programs or incentives might make a dent. But to shift the dial significantly, we need input from governments, industry bodies, ecosystem insiders and advocates.

Real change can only come from collaboration.

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Why?

Through this series, we’re hoping to spark a nuanced, in-depth discussion around the challenges facing women founders, particularly when raising venture funding. We also hope to present a way forward, to consider how we might tackle those challenges through systems change.

Part of that discussion includes talking about other sources of capital, including debt funding. But the purpose here certainly isn’t to promote Tractor funding over anything else.

Our goal is to reframe the discussion and seek solutions; to move the conversation forward.

As Noga Edelstein says:  “I’ve been working on gender equality in the startup ecosystem for over a decade, and while we’ve helped many individual women, we have failed to shift the metrics. 

“This is not just a problem for women, it's a huge missed economic opportunity for Australia. 

“It’s becoming clear that to shift the flows of capital, we need to change our focus from fixing women to fixing the problems that stand in their way. But these problems are complex. Systems change is hard. 

“This series considers the tough question: what would it take to change the game for women entrepreneurs building the companies of the future?”

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A note on intersectionality

This content series is focused on women founders, and within that we include trans women and non-binary and gender-fluid people.

We acknowledge that the challenges facing women founders are doubled for those who are marginalised in other ways, too, including LGBTQIA+ people, Indigenous women, women of colour, disabled women, migrants, and those from underprivileged backgrounds.

Most of the data we’ve drawn from is self-reported by founders, so the stats regarding women refer to anyone who identifies as such.

However, these reports don’t get into gender diverse representation, partly because participation rates are so low, data could become identifiable.

There is also very little data available on racial diversity within funded startups, and none that we could find on disability, or any other diversity metrics.

As we call for systemic change to improve the odds for women founders, we are also calling for intentional inclusion of all women, and indeed, all under-represented people in the ecosystem.