04/18/19: The Value of Investing in Female Founders

By Falon Fatemi, Forbes

The data is all too real and familiar. When it comes to raising capital, males consistently outperform females. According to research by All Raise, only 15% of venture capital funding is allocated to female founders. What’s more troubling, despite a lot of concern and advocacy, we really haven’t done much to address the discrepancy. All Raise’s research confirms that the growth rate of funding injected into female-founded companies has plateaued over the last few years.

The disproportionate level of funding channeled into male-led startups might suggest that these are more lucrative investments. This couldn’t be farther from the truth. The investment landscape is laden with perceived biases that put an iron ceiling on women’s ability to raise money. One 2018 study found that, during investment pitches, female entrepreneurs are more likely to be asked “prevention” questions—questions related to safety and potential risks and losses. In contrast, male entrepreneurs are more likely to be asked “promotion” questions—questions related to their hopes, ambitions, and achievements. This difference in the modus operandi has a measurable impact on the relative funding each gender receives.

Read more here.

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