IWD 2025: Female founders should receive more Venture Capital funding

Globally female founders receive only two percent of VC funding, despite controlling 85 per cent of consumer spend. Sadly, it's no surprise that generating an AI image of a "successful entrepreneur" will result in a picture of a man.

This phenomenon can be attributed to several factors, such as ingrained systemic barriers and biases in risk perceptions and investment choices. However, the landscape is changing, and not least because female-founded businesses are returning, on average, 35 per cent higher returns on investment.

Enterprise Ireland, the global trade agency of the Irish government, is actively working to close the funding gap through targeted initiatives that specifically support Irish female entrepreneurs.

Why do female founders receive less funding?

So why, in 2025, do female founders still receive less funding than their male counterparts? Despite increasing numbers of women launching successful startups, investment remains disproportionately skewed toward male-led companies.

According to a 2024 Forbes article on 'Why Women Get Less Than 3 per cent of VC Funding – And What We Can Do About It':

• Male investors tend to fund businesses that align with their experiences or interests, consciously or unconsciously reinforcing a male-dominated startup culture.
• Female VCs are twice as likely to invest in female founders, yet only 18% of decision-makers in VC firms are women.
• Female-led businesses are often seen as riskier investments, despite delivering 35% higher returns on investment compared to male-led ventures. This false perception makes it difficult for them to secure funding.

Systemic Barriers

However, systemic barriers, not just the VC industry's failure to invest in women, are a big part of the problem. These include:

• Risk aversion: social studies indicate that women tend to be more risk-averse, which can impact their fundraising approach, both in putting their hands up and in how much they request.
• The confidence gap: Cultural biases frequently condition women to undervalue their ideas, which makes them less assertive when seeking funding.
• Lack of role models: the phrase "if she can't see it, she can't be it" is used often in sport but is just as important in the entrepreneurial space. Navigating traditionally male-dominated networks can be particularly challenging for women, especially when these paths are less travelled by their peers. These networks often hold the keys to crucial opportunities like securing funding, connecting with influential contacts, and accessing valuable insights from experienced individuals. 

Additional Challenges

In addition to the challenges mentioned above, there are even more obstacles in the way of a successful pitch from a female entrepreneur.

• Lack of female investors: with only 18 per cent of VC decision-makers being women, the investment community remains predominantly male. Female VCs will be more likely to invest in female founders if they're given the opportunity to do so.
• Unpaid labour disparity: According to the World Economic Forum (WEF), women spend 55 per cent of their time on unpaid labour (such as childcare), compared to 19 per cent for men. This disparity creates added financial and time constraints.
• Pitching bias: An Academy of Management study revealed that if men and women make the exact same pitch, men are asked more questions emphasising possible benefits, and women are asked more questions that emphasise risks. According to the study, 'every additional prevention-focused question significantly hinders the entrepreneur's ability to raise capital, fully mediating gender's effect on funding'. A HBR analysis of the study noted that entrepreneurs responding to questions focused on benefits have been seen to raise up to six times more than those asked the risk questions.

Helping to change the landscape

At Enterprise Ireland, we're dedicated to propelling Ireland's economy by cultivating a diverse entrepreneurial ecosystem. Increasing opportunities for women entrepreneurs and women in management is a strong focus for Enterprise Ireland, and this work is underpinned by our Action Plan for Women in Business that was launched in 2020. 
Since that time:

• Irish VCs, including Enterprise Ireland, have invested €100 million in women-led startups in 2023.
• In 2023, 31% of the startups supported by Enterprise Ireland had a woman in the founding team.
• Ireland ranks third in Europe for VC deal count involving at least one female founder.

Enterprise Ireland's efforts are already delivering results, with successful female-led businesses thriving. In the Australian market, they include:

Easydry, the B Corp certified company revolutionising textiles with sustainable, disposable solutions that eliminate the need for cotton and traditional laundry, has expanded to more than 25 countries and multiple industries, like hairdressing, beauty, hospitality, healthcare, and fitness, under the guidance of founder Anne Butterly.

Swoop who is revolutionising how SMEs access funding and grow through tailor-made financial solutions was founded by CEO Andrea Reynolds and run in Australia by Cynthia de Vera. Since launching in 2018, they have helped thousands of businesses find millions of dollars in funding across the world and took the top spot in the Deloitte 2023 Technology Fast 50 awards.

We all look forward to the day when women will be called "founders" or "entrepreneurs", as opposed to "female founders" and "female entrepreneurs", and no special initiatives will be needed to encourage them to apply for funding or start a business. In the meantime, we advise founders and leaders to look for the grants, funds, and additional resources aimed at helping female entrepreneurs access capital in their region.