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Would more women joining the ranks of venture financing help to address the lack of funding faced by female-led early-stage companies?
“Bottom line is, if you have more women in venture, you will have more female founders funded,” argues Kinga Stanislawska, co-founder of Experior VC and of European Women in VC, a community of female investors.
Fewer women in venture capital leads to less funding for female entrepreneurs, experts say. “Women are two times more likely to invest in female founders,” notes Sophie Winwood, operating partner at Foxe Capital, an early-stage fintech fund, and chief executive of Unlock VC, a global community for women.
The underrepresentation of women in venture capital matters to the overall industry too because having different perspectives helps to spot opportunities. Investors need to understand the problem that a business wants to solve in order to gauge the potential opportunity. That can be easier if they have lived experience, says Sutian Dong, a founding partner at VC firm Multitudes and co-founder of Global Women in VC, an international network.
Katelin Holloway, a founding partner at venture capital firm Seven Seven Six, says: “Entire categories of innovation get overlooked,” citing sectors from women’s health and caregiving to consumer products. “These are massive markets that were underfunded for decades because the people controlling capital didn’t personally experience the pain points.”
In Europe, according to data provider PitchBook, women with male co-founders won 27.8 per cent of capital invested, falling to less than 1 per cent for women-only founder teams in 2024. In the US, the figures were 23.6 per cent and just under 2 per cent respectively.
Some recent and modest growth aside, the proportion of women working in venture capital lags behind that of men. This year nearly a third (31 per cent) of UK professionals in the industry are women, according to a new report from Level 20, a not-for-profit organisation, and the British Private Equity and Venture Capital Association.
The report, Diversity in UK Private Equity and Venture Capital 2025, also found that the proportion of women in venture capital tails off according to seniority. Some 40 per cent of junior roles in the sector in the UK are filled by women, dropping to 36 per cent for mid-level roles, and 23 per cent of senior investment professionals.
In Europe, in 2024, Level 20 found that some 28 per cent of investment professionals in venture capital (outside the UK and Netherlands) were women. In Europe too the proportion of women drops in line with seniority. Last year, some 38 per cent of junior level roles in venture capital in Europe were held by women, dropping to 33 per cent at mid-level, and 19 per cent of senior investment professionals.
Data from New-York based All Raise, a non-profit focused on tech sector backers and founders, suggests gains have been made in the US. In 2018 it found that 9 per cent of people working in venture capital at partner level and above were women; by late 2024 that had risen to 17.5 per cent.
If women miss out on senior level jobs in the industry, they have less of a say on which businesses to fund and on assets the firm is managing. Indeed, a 2022 report by European Women in VC found that female general partners in Europe had responsibility for just 9 per cent of assets under management.
It is hard to pinpoint why women are absent from the top in venture capital firms, says Winwood. One hurdle she cites is that venture finance is very network-based: “Anyone who’s outside of it really struggles to get in.”
There is also an aspect of “you can’t be what you can’t see”, says Winwood. And the market conditions affecting all venture capitalists — including difficulties raising capital and fewer opportunities to exit companies — are exacerbating this, she argues, as people at the top are waiting for an upturn.
On the one hand, venture capital firms tend to have smaller headcounts than, say, private equity, which results in “more flexible hierarchies”, says Level 20. On the other hand, that can also make career progress opaque. “Not every VC firm has a clear path to promotion — and a path to promotion is not always possible,” says Paige Hendrix Buckner, chief executive of All Raise.
One option for women feeling stuck is to set up their own fund, allowing them to focus on areas they are interested in and where they see most potential.
That was the aim of Anu Duggal, who started Female Founders Fund, a New-York based early-stage venture fund that invests in tech companies set up by women, in 2014. There is more to backing a business than “just being on an [investment committee]”, she says.
But setting up a fund is tough, says Dong, and raising capital is more challenging “the more unproven you are or the more unlike the norm you are”. But she adds: “Of course, that’s where I believe the real alpha [the ability to make above-average returns] lies . . . Where you can see opportunities that other people don’t.” Ultimately, says Dong, “diversity of thought is a huge competitive advantage in finding deals that no one else might see the potential of, ahead of everyone else.”
Winwood too argues that new perspectives lead to better returns, adding: “It is important to think of this as an industry-wide opportunity rather than to support an underserved section of the industry.”
