April 16, 2021

The outsized role of gender in European venture funding

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Previous research shows that start-ups receiving external financing in the form of venture capital grow faster than companies that do not, but the odds of raising venture capital remain a major challenge for an essential group, namely women entrepreneurs.

In this study, we compare how women, men, and mixed founding teams fare depending on the technology sector and founder background factors in Europe. The study is done in collaboration with Catarina Cawén.

Some of the key findings:

  • Female-only founding teams start fewer companies and are less likely to raise venture capital, not only on an absolute basis but also on a relative basis.
  • In most industries, mixed-gender teams have a higher chance of raising venture capital than male-only or female-only teams.
  • Background factors (educational level, prior experience from running a startup, and prior working experience in technology or finance), affect the ability to raise venture capital, but gender seems to play a larger role.
  • The female gender alone reduced the probability of a founder being allocated venture capital by 17%