The VC funding gender gap is getting worse

Mary Boryslawska had never felt so aware of her gender until she founded a company. Despite being a Forbes 30 Under 30, she's been mistaken for a plus-one at VC dinners. At conferences, she’s been asked by investors who she plans to sleep with that night. She was even advised to appoint a male co-founder if she wanted to be taken seriously when fundraising.

"The stuff I’ve heard and seen [in VC] is a lot worse than any job I've ever had,” says Boryslawska, the CEO and co-founder of Enzum, a European battery-storage startup. Even hailing from the male-dominated world of machine learning, raising capital has felt like entering a boys’ club of a different magnitude.

Despite research suggesting that businesses created by women are less likely to fail, the gender funding gap not only persists, but it’s worsening, according to new data from PitchBook. At the same time, Silicon Valley has drifted from its liberal push for inclusivity: In February, Meta CEO Mark Zuckerberg said that companies need more “masculine energy.” This political juncture could make closing the gap an even more unwieldy task.

The gender funding gap

Women have made gradual inroads into Corporate America over the past decade. But VC — where cutting-edge ideas battle to become tomorrow’s unicorns — is struggling to keep up with the times.

To put things into perspective, this year, 11% of Fortune 500 CEOs are women; two decades ago, there were none. Globally, about 19% of C-suite positions in financial services are expected to be held by women this year, up from 13.7% a decade ago, according to Deloitte.

But just 0.7% of VC funding in the U.S. has gone to companies founded exclusively by women this year, PitchBook's June report found. That’s down from 2% last year and is the lowest percentage since record keeping began in 2013. Moreover, the percentage of deals going to startups with at least one woman founder has fallen from 27.8% in 2021 to 23.4% this year. Last year’s deal count for this group was the lowest since 2018. And this year is off to an even worse start: During the first quarter, deal count was at its lowest level since 2013.

“I am shocked by just how little we've moved forward," Whitney Wolfe Herd, founder and CEO of dating app Bumble, said during a podcast interview last month. She described meeting countless young women snubbed by investors: “They don’t just have an excellent deck or an excellent pitch — they have real numbers. They have sales...And they just can’t get anyone to take a meeting with them,” she said. By contrast, young male founders will recount the millions they’ve raised based purely on “an idea,” she added.

Echoing this, Boryslawska says countless male friends of hers have closed rounds with less traction and less product than her own company. Likewise, she feels demoralized upon browsing the websites of her competitors racing through Series B and C raises, to see a team of men and one woman — in marketing or PR. While she acknowledges there are many reasons why a startup closes a deal, “I know in my gut that the sexism is there,” she says.

Explaining the gap

A few studies offer insight into why the VC funding gap is growing.

First, 93% of VCs are men. For example, Enzum is in the midst of closing a deal, and throughout months of meetings, Boryslawska said she has yet to meet a woman. “Not a single one,” she says.

A 2020 study found that VC's gender imbalance is itself a cause of the funding gap. That’s because the disparity reinforces gender biases. A lab experiment by INSEAD found that two identical pitches — differing only by founder and VC gender — resulted in women-founded startups backed by women being judged less competent and viewed as token rather than merit-based.

“I feel like people may think we’re a diversity investment,” says Boryslawska, echoing the findings.

A 2021 study, meanwhile, found that male VCs question female founders more about “risk,” versus focusing on “growth” with male founders — leading to more conservative deals.

One of those perceived risks is an assumption that women will be too occupied with children.

“Investors genuinely are afraid that we are going to go on maternity leave,” Boryslawska says. Founders tend to be young — the median age at which founders start billion-dollar businesses is 34, according to Super Founders: What Data Reveals About Billion-Dollar Startups by Ali Tamaseb.

But Zuckerberg, Jack Dorsey, and Bill Gates were all in their 20s when they founded their empires — origin stories they are praised for. Youth may be perceived as a superpower for men — but a limiting factor for women.

A particularly egregious example of how motherhood is held against women founders occurred earlier this month. The creator of an artificial intelligence startup was refused entry to London Tech Week because she had a baby with her — despite the event’s organizers describing it as a space aiming to “amplify the voices of women in technology.”

'The woman founder'

One proposed solution to the gap has been grants for female entrepreneurs. But in the U.S., schemes are drying up.

President Donald Trump’s crusade erupted in January with an executive order that defunds federal diversity, equity, and inclusion initiatives. This led the National Science Foundation (NSF) — a government agency that supports research in science and engineering — to flag the words “women” and “gender” in research proposals, triggering funding reviews. Of the scientists who’ve had their NSF grants cut as a result of the order, 58% are women, according to Science Adviser. Likewise, Women’s Business Centers (WBCs) — a nonprofit that supports 150,000 female entrepreneurs — has had its federal funding eliminated entirely.

The federal war on “woke” has also reached the historically liberal corridors of Palo Alto. The 2024 U.S. presidential election signaled the cultural shift: Tech billionaires gave $273.2 million to Trump’s campaign — triple the amount donated to Kamala Harris. CEOs including OpenAI’s Sam Altman, Meta’s Zuckerberg, and Amazon’s Jeff Bezos each donated $1 million to the inauguration.

But this has also meant getting in line ideologically: Alphabet, Meta, and Amazon are among the growing list of tech firms that have disbanded DEI programs this year.

Elsewhere, even when DEI schemes do exist, stigma continues to undermine their efficacy. Take WomenTechEU, an initiative funded by the European Union for women leading deep-tech startups, as an example. Enzum applied for funding last year but the application was rejected. The evaluator’s feedback referred to Boryslawska as “the woman founder” and cited the absence of a male founder as one of the reasons for rejection, said Boryslawska. After lodging a complaint, Enzum was informed it'd been given another startup’s notes by mistake. Then, the same text was re-uploaded — this time with the gendered lines omitted.

“The response was outrageous,” Boryslawska added.

When asked if she would listen to the advice given to her and appoint a male co-founder for a easier ride with investors, she replied:

“No, I think I’d rather go down."