Access to capital: Women entrepreneurs still struggle for VC funding The venture capital ecosystem continues to focus on startups across technology sectors, but it is also becoming more consolidated, like so many other industries. The number of active VC firms in the United States has dropped from 8,315 in 2021 to 6,175 in 2024. Yet one unfortunate reality has been consistent for decades: women- and minority-led entrepreneurs still struggle to access VC funding. Even though women-led startups consistently show lower failure rates and stronger capital efficiency, startups with only female-only founders received less than 2% of VC funding in 2023. According to the Founders Forum Group, women business owners captured a disproportionately small share of worldwide VC funding, representing not only an equity issue but missed economic opportunities estimated at more than $5 trillion worldwide. Sadly, this imbalance is nothing new. As far back as 2000, USA Networks founder and cable industry pioneer Kay Koplovitz helped launch Springboard Enterprises, a nonprofit series of investment forums designed to bolster female entrepreneurs and improve their connection to venture capitalists. At the time, she had been stunned to learn that in 1997, “only 1.5 percent of the $20 billion of venture capital raised had gone to women-run businesses.” Even during the record investment boom of 2021, when VC funding reached historic highs, female founders in the U.S. secured just 2% of venture capital, a five-year low. How is it that the numbers barely moved, despite years of awareness and advocacy? Why the Gender Gap persists Women entrepreneurs continue to build successful companies, yet the capital allocated to them remains disproportionately small. This gap is not the result of a single factor; rather, it reflects several structural and behavioral dynamics embedded in the VC world. First, access to venture capital still runs through networks that historically excluded women. As Sharon Hadary, the executive director of the Center for Women’s Business Research once described it, the lack of funding reflects “a total disconnect” between the maledominated financial world and female executives. Equity markets operate heavily through referrals, she noted, and women were largely absent from those referral networks. Venture capital remains overwhelmingly male and deals often move through relationships and communities where women are underrepresented. Some things haven’t changed. Second, women entrepreneurs are often evaluated differently Research shows that female founders are more likely to be asked more negative, risk-focused questions, such as: “What will you do if growth stalls?” or “How will you retain existing customers?” Male founders, by contrast, are more often asked growth-oriented questions, assuming success, including: “How big can this become?” or “How will you capitalize on current momentum?” These subtle differences shape investor perceptions and influence funding outcomes. Ironically, the data suggests investors may be overlooking strong opportunities. Studies have found that startups with female founders can generate higher revenue per dollar invested. Finally, broader economic conditions have reinforced the disparity. Inflation and market uncertainty have increased reliance on insider-led funding rounds, where existing investors support people they already know. Again, the skew toward men in these circles disproportionately benefits founders already embedded in those networks. Today’s repeat-founder pipeline tends to reinforce those same unbalanced demographics. AI’s investment gives—with limits Artificial intelligence is now reshaping the venture landscape as well. In 2025, a record $73.6 billion was directed toward female-founded AI startups. Yet this number is deceiving since a large portion went to only two companies (Anthropic and Scale AI). Venture capital remains highly consolidated, similar to many industries, with the majority of dollars concentrated in a few rather than across the ecosystem. Many major VC companies are increasingly focused on AI infrastructure and biotechnology. But women and minority founders are more commonly represented in such sectors as consumer products, healthcare, and sustainability; these industries historically receive a smaller share of venture funding. Since 2023, AI companies working on IT infrastructure and hosting have attracted the largest share of venture investment, reaching $47.4 billion in 2024 and $109.3 billion in 2025, more than two-thirds as much as all other industries combined. Yet the rise of AI also creates new opportunities. Women are using modern AI platforms and no-code tools to bootstrap companies faster and more efficiently, reducing reliance on the “old-school” network. Entrepreneurs can now automate operations, reach customers more directly, and build products without large teams or heavy capital requirements. In other words, innovation itself can help level the playing field. Expanding the pathways to capital While venture capital remains difficult to access, female founders are increasingly exploring alternative paths to growth. 16 enterprising Women FINANCE by Tasneem Dohadwala
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