Start-ups with female founders receive less funding – that is a well-known fact. But what does this actually mean for innovation? Spoiler: We are missing out on groundbreaking ideas!
Money decides who shapes the future
The figures speak for themselves: in 2023, only 1.9% of all venture capital in Europe went to purely female-led start-ups, while 87% went to male founding teams. The situation is similar in Germany – even though studies show that companies run by women are often just as or even more successful than their male counterparts. (You can find more figures on this here: Gender gap in the German startup ecosystem). This unequal distribution has far-reaching consequences: When investors invest almost exclusively in male-led startups, the innovation landscape becomes one-sided.
Diversity brings better solutions – and higher profits
Innovative products are created when problems are viewed from different angles. However, when capital flows almost exclusively in one direction, many pioneering ideas fall by the wayside.
Fact check:
- Diverse teams achieve higher profits: A McKinsey study shows that companies with a high level of gender diversity are 25% more likely to be more profitable than average.
- Female-led start-ups are more successful: An analysis by BCG found that female founders start with 50% less capital on average – but generate more revenue per dollar invested than male-led companies.
- Diverse perspectives improve innovation: Research shows that diverse teams are 35% more likely to develop innovative solutions than homogeneous teams.
If only one group decides, blind spots arise
Because investors are predominantly male, they often prefer business models that they can relate to from the reality of their own lives. As a result, many female-driven innovations remain underfunded or do not even emerge.
Examples of missed opportunities:
- MedTech & HealthTech: For a long time, most medical studies were only carried out with male test subjects. To this day, many health apps, medications and diagnoses are not adapted to female bodies – sometimes with life-threatening consequences.
- AI & algorithms: Artificial intelligence is often trained with data sets that are male-dominated. This leads to AI systems discriminating against women – be it in application procedures, credit allocation or facial recognition.
- Financial products: Female founders not only have less access to capital, but also to financial products that take their specific challenges into account, e.g. fluctuating income patterns or longer career breaks.
Those who invest shape the future
The distribution of capital is not just an economic issue – it determines which products and technologies shape our society. If women receive less funding, not only are valuable business ideas lost, but also economic potential.
But there is hope:
- More and more funds are focusing on female founders – including Auxxo Female Catalyst Fund, Encourage Ventures and Unconventional Ventures.
- Large investors are increasingly recognizing that diversity is not a charity project, but a real business opportunity.
- Networks such as Female Founders or Global Invest Her help female founders to gain access to capital and support.
Time for a change of perspective
The gender investment gap is not just a problem for female founders – it affects us all. If we want to promote innovations that really shape the future, we need to break down outdated structures and invest more diversely.