All-female founding teams got 1% of VC funding in 2024. One percent. That's actually worse than the 2.2% they got back in 2017. We've had a literal decade of panels and think pieces and "commitment to diversity" statements from every major VC firm, and the number went down.
Before you tell me about how companies with "at least one woman founder" are doing better at around 23% of funding, let's be real about what that number actually means.
Mixed-gender teams are great (truly, diverse teams perform better), but we're essentially celebrating the fact that women can get funding if they bring a man along. That's not progress. That's a work-around.
Bringing a male co-founder shouldn't be the price of admission to venture capital.
Giving Girl Math a Whole New Meaning
Women-led startups generate 78 cents in revenue for every dollar invested, while male-led startups generate just 31 cents. Let me say that again in case you're skimming: more than twice the return on investment.
Female founders also burn 15% less capital ($270,000 per month versus $320,000 for the overall startup average), achieve 24.3% of total VC exits (a historic high), and have consistently lower failure rates. So we're not just talking about equity or fairness or doing the right thing (although we should be). We're talking about investors literally leaving money on the table because they can't see past their pattern recognition bias.
Yes, I know some of you are already typing "but what about the pipeline problem" so I'm going to stop you right there. In 2024, 13 female-founded companies reached unicorn status (companies valued over $1 billion), including Writer, Physical Intelligence, and World Labs. The talent is there. The ideas are there. The performance is there. What's missing is the capital.
What's missing isn't the founders. It's the capital and the willingness to write the checks.
Why This Keeps Happening
The answer is both simple and infuriating: only 17.3% of decision-makers at VC firms with at least $50 million in assets under management are women. When 82% of the people writing checks are men, they tend to fund founders who look like past successes, which were also mostly men. It's not a conspiracy, it's just how pattern recognition works in human brains.
Studies have shown that male investors ask women about potential losses while asking men about potential gains during pitch meetings. Women founders report getting more technical pushback and having their expertise questioned more aggressively. Jo Lawson, CEO of LUUM, spent 13 months closing a $30 million Series A for her robotic lash extension startup because she had to keep proving that this was a real category to rooms without women decision-makers. Thirteen months of proving that women spend money on their appearance. The absurdity speaks for itself.
The early-stage problem is getting worse, not better. Only 20.5% of first financings went to companies with at least one female founder in 2024, down from 26.5% in 2020. That's a five-year low in a market that's supposed to be getting more progressive.
When women can't get in the door at the seed stage, they can't build the track record that gets them to Series A and beyond. The pipeline problem is real, but it's not a supply issue; it's an access issue that compounds at every subsequent funding round.
The compounding disadvantage effect: can't scale what you can't start.
The Anti-DEI Backlash Is Making Things Worse
The broader market context makes all of this harder. The number of active VC firms dropped from 8,315 in 2021 to 6,175 in 2024; that's a 26% decline in just three years. When there's less money overall and everyone's getting more risk-averse, underrepresented founders get hit first and hardest. Capital is concentrating among fewer, larger firms that can afford to stick with their existing playbooks.
Add in the current political moment, and you've got VCs actively backing away from anything that could be perceived as "diversity investing," as if backing founders who generate better returns is somehow political. The Fearless Fund, a VC fund dedicated to investing in startups founded by women of color, was legally blocked from issuing grants only to Black women-owned businesses. Girls in Tech shut down in June 2024. Organizations specifically dedicated to helping female founders are disappearing while the funding gap stays exactly where it's been for nearly a decade.
Female-focused funds have deployed just $2.3 billion since 2020, less than 1% of total VC investment during that period. Meanwhile, emerging fund managers (who tend to be more diverse) are at their lowest rate in a decade because institutional investors want "safer" bets during economic uncertainty. So the very mechanisms that were slowly improving representation are being systematically dismantled while everyone nods along about the importance of supporting women founders.
When institutional investors choose "safe" over "better returns," everyone loses.
What Actually Changes This
I'm not naive enough to think one blog post is going to fix a structural problem that's been baked into venture capital since its inception, but here's what we know actually works based on the data, not the feel-good propaganda.
The clearest intervention is getting more women into check-writing positions. Research consistently shows that female investors are more likely to invest in female founders, and when you change who's in the room making investment decisions, you change what gets funded.
Organizations like All Raise have shifted their entire focus to this specifically because representation at the GP level is one of the few interventions that actually moves the needle. The problem is that women make up only 17.3% of decision-makers at VC firms with at least $50 million in assets under management, and progression through the VC career ladder takes years. This isn't a quick fix, it's a generational shift that requires sustained commitment.
Female founders don't have the luxury of being lazy about any of this. When the system is working against you, you can't hand-wave about TAM without traction or pivot stories without showing exactly how you'll execute. Focus on the metrics that can't be disputed: revenue growth, customer acquisition cost, retention rates, unit economics, burn rate. Make your business so undeniably strong that investors have to confront their own bias when they pass on you. This shouldn't be your burden to carry, but pretending the burden doesn't exist doesn't make it go away.
The alternative funding landscape is shifting in ways that matter. Angel investment by women is growing, with more than 30% of angel-funded companies now led by women, a significant increase from just 3% two decades ago. Revenue-based financing, strategic partnerships, and building to profitability without massive venture rounds are all viable paths that give you more control and less dilution.
Sometimes the best move is to build a sustainable business that doesn't depend on a system that wasn't designed for you. The trade-off is slower growth and less access to the billion-dollar exits, but you keep ownership and control over your company's direction. That's not settling, that's strategy.
The Part Where I Tell You What This Really Means
The 2% problem (or now the 1% problem, because we're literally going backwards) isn't going away because people keep talking about it at conferences. It's going away when the people with capital decide that maximizing returns matters more than maintaining comfortable patterns. It's going away when women founders build companies so successful that ignoring female-led startups becomes an obvious strategic mistake that costs investors real money and real opportunities.
We're not asking for charity. We're pointing out a massive market inefficiency where one group consistently generates more than 2x the revenue per dollar invested and represents trillions in unrealized economic value, but gets 1% of the capital because investors can't see past their pattern recognition bias. If closing this gap could boost global GDP by 3-6%, we're not talking about a fairness issue anymore. We're talking about economic malpractice at scale.
The founders who are navigating this right now already know what I'm saying is true. You're building with less, proving more, and watching companies with worse metrics and no revenue raise 10x what you're asking for because the founder went to the right school or worked at the right company.
That exhaustion you're feeling isn't burnout from working hard, it's the tax of operating in a system that makes you overcome structural disadvantage just to get in the room, and then questions whether you belong there once you arrive.
So keep building. Keep pushing for the fundamentals that can't be argued with. Find the investors (especially the women) who actually look at data instead of pattern-matching to their portfolio. When you make it through (because many of you will), remember what it took to get there. Fund the next generation of women who are going to be sitting in pitch meetings in 2034 wondering why this number is still stuck at 2%, or 1%, or whatever number we're pretending is acceptable by then.
Because if we don't fix this ourselves, nobody else is going to do it for us. The data has been screaming the same thing for a decade. At some point, we have to stop waiting for the system to care and start building around it instead.
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