Persistent gender disparity in startup funding shows urgent need for change

I don’t know about you, but my summer was spent hanging out with my family on the beach and devouring as many books as I could. I hit a new record with five in January, and all of them scored well (so a good summer was had). The only one that scored 10/10 was Caroline Criado Perez’s Invisible Women, a compelling exploration of how our world, built largely by and for men, perpetuates systematic discrimination against women.

Perez sheds light on the gender data gap, an insidious knowledge void that fuels biases and creates a pervasive but unnoticed prejudice affecting women’s lives in various aspects — from the size of mobile phones being too large for the average female hand to PPE gear being designed exclusively for men. The reality is that most aspects of our lives are designed by men, for men. And yet women make up +50% of the population.

Perez’s profound insights resonate deeply, particularly when considering the staggering statistics that underscore the gender disparities in entrepreneurship. Research by Boston Consulting Group in 2018 revealed a stark reality: women business owners receive less than half the investment of their male counterparts, yet they generate more than twice the revenue. This disconcerting contradiction sheds light on the urgent need for a radical shift in the investment landscape.

The most recent State of Australian Startup Funding report (thank you Cut Through Ventures and Folklore) went live on Tuesday. The report provides a nuanced perspective on the progress and persistent challenges faced by women entrepreneurs. While deal participation by all-women or mixed-gender teams reached a five-year peak, and the proportion of capital for mixed-gender teams improved, the gender funding gap remains substantial. The median deal size for all-women founding teams plummeted to $700,000, a fraction of the $2.5 million in 2021. This stark difference highlights the systemic barriers that hinder the growth of women-led startups. Nicola Hazell’s assertion in the report that the pace of change in Australia’s startup ecosystem remains glacial is a stark reminder of the uphill battle that women entrepreneurs face.

Once again the numbers show that on average, women-led startups raise less capital than men-only-led companies across every stage of funding. And women just can’t seem to grow companies and successfully raise in later rounds. As the report highlighted, there is a scarcity of large-scale deals secured by all-women teams — all-women founding teams have only completed three $50 million+ funding rounds and seven $20 million+ rounds. These figures represent just 2.5% of all $50 million+ rounds and 2.1% of $20 million+ rounds during this period. Something is still wrong. Something needs to change.

Caroline Criado Perez suggests one change that I am all for, and this is it: “We must increase female representation in all spheres of life. Because as more women move into positions of power or influence, there’s another pattern that is becoming even more apparent: women simply don’t forget that women exist as easily as men often seem to”.

Now is a pivotal moment for change. The convergence of factors highlighted by F5 Collective’s CEO — Tracey Warren — in the report provides a unique window to pave the way for a more equitable landscape for women founders. In this landscape, funds like F5 Collective emerge as catalysts for systemic generational change. Our commitment to funding 1,000 women founders across APAC by 2030 is real. On top of this, we will create an enabling environment for women entrepreneurs by securing dedicated corporate support and alliances (a big focus for me), advocating for enhanced policies (yes policy change!), and building the right support around our founders. We believe that this model showcases a bold and transformative approach to closing the gender funding gap.

As a woman investor and now the CCO of F5 Collective, I am resolute in my commitment to championing this cause and to bringing the F5 mission to life. We will close the gender funding gap and reduce inequality by funding and supporting women founders across APAC. It’s time to break the invisible visible chains of gender bias and create a future where every entrepreneur, regardless of gender, has an equal opportunity to thrive. We are on a mission to turn the stats around… who is with us?

Bree Kirkham is the CCO of F5 Collective.