Entrepreneurship is often described as the backbone of innovation, job creation, and economic growth. Yet, a clear gender divide becomes evident when we look closely at how resources are distributed to promote entrepreneurial ventures. Despite demonstrating innovation and resilience, women entrepreneurs continue to face systemic barriers in accessing venture capital (VC). Women-led startups attract only a fraction of investment compared to male-founded ventures across the globe, including in India.
Glaring Global Funding Gaps
The funding disparity is striking. According to Crunchbase (2024), women-led startups secured less than 2% of total global venture capital funding. Forbes (2023) further reported that female-only founding teams received under 3% of investments, while the Funders Forum (2024) revealed that just 2.3% of the $289 billion invested in 2024 went to female-only teams.
What makes this situation even more paradoxical is that women entrepreneurs often deliver stronger returns on investment (World Economic Forum, 2024). These numbers highlight how deeply ingrained biases affect decision-making in high-stakes financial environments. If women-led businesses have proven profitability and resilience, then the lack of funding is clearly the outcome of structural inequities rather than entrepreneurial shortcomings.
India’s Context
India’s startup ecosystem has grown rapidly, yet the gender funding gap remains stark. A Bain & Company report (2021) revealed that women-founded startups received only 5% of total venture funding in India between 2017 and 2020.
Even though initiatives like the Stand-Up India Scheme and government-backed credit support for women entrepreneurs exist, private venture capital investment remains largely skewed. While female founders are often asked questions about risk management and financial caution, the male founders are more likely to be asked about growth potential (Harvard Business Review, 2023).
One could interpret that this difference in questioning reflects an implicit stereotype that women are “risk-averse” leaders. And this eventually translates into limited investor confidence. As someone raised in India, I see this as a reflection of cultural conditioning where women are often encouraged to give importance to stability over risk. This mindset filters into the investment ecosystem as well where women-led ventures are evaluated not on their ideas but on gendered assumptions.
Structural Challenges Behind the Funding Gap
As already mentioned, one of the most cited explanations for the funding gap is investor bias. Research shows that male entrepreneurs are funded based on potential, while women are often judged on proven performance (Harvard Kennedy School, 2022).
Another major barrier is the lack of access to informal VC networks. That’s because these are dominated by male investors and mentors. The scarcity of female decision-makers within VC firms further exacerbates the cycle. Only around 12% of decision-makers in global VC are women (Crunchbase, 2024).
These barriers are immensely frustrating. They reveal how much success in entrepreneurship depends not only on hard work or ideas but also on access to the right networks and perceptions. As a young woman desirous of making a career in business, it is disheartening to know that my gender could matter more than my strategy or innovation.
Pathways for Change
Despite the daunting picture, change is possible. Dedicated women-focused venture funds like the Female Founders Fund have already started building ecosystems where female-led ventures can thrive. Governments, too, are experimenting with gender-lens investment, launching SME financing programs that directly target women founders. In the UK, a new government-backed initiative, the Women Backing Women fund, aims to become one of the world’s largest pools of capital for female-powered businesses—deployed by female investors, who are statistically twice as likely to fund female-led or mixed-gender ventures. (The Times, 2023).
Furthermore, mentorship and accelerator initiatives are helping women entrepreneurs build credibility and networks on par with their male counterparts (arXiv, 2025). This collective effort is vital for building a robust support system that operates outside traditional, male-dominated circles. Initiatives such as the Cherie Blair Foundation’s Mentoring Women in Business Programme are showing significant impact, with 99% of mentees in 2024 gaining business skills and 94% progressing toward their objectives. These informal networks can become powerful engines of growth, offering not just funding but also invaluable advice and emotional support.
True transformation, however, requires more than policies; it needs a cultural shift. Investors must actively challenge the stereotype that women are inherently risk-averse. It is both a matter of social responsibility and a smart business decision. As research consistently shows, diverse teams often lead to more innovative and profitable outcomes. A 2023 McKinsey study found that companies in the top quartile for gender diversity were 39% more profitable than those with less diversity. Boards and decision-makers should realise that investing in women-led startups is a strategic move that can unlock new markets and generate superior returns.
VC firms should incorporate diversity training to address implicit bias. Media and academic institutions should spotlight successful women entrepreneurs to normalise their presence in high-growth industries. It is heartening to see gender-lens investing, an investment strategy that considers gender-based factors to advance equality, becoming a growing field and showing promising results (The GIIN, 2024).
Why This Matters to Me
From my perspective as a young woman about to enter the professional world, this issue resonates deeply. I want to imagine a future where my gender does not determine the size of the investment I receive, or the confidence investors have in my vision. Bridging the gap requires a shift in mindset, stronger representation of women in decision-making roles, and an ecosystem that rewards innovation regardless of gender. If societies truly wish to unlock inclusive growth, investing in women entrepreneurs is not an option; it is a necessity.
