Female founders are disadvantaged by VCs

According to a study by the German development bank KfW, female founders have a much harder time accessing venture capital than men.

On average, innovative, growth-oriented start-ups run by women receive less venture capital than companies run by men. And when they do receive money, the sums are significantly lower. These are two key findings of a new study by the German promotional bank KfW, which looks at the challenges offemale entrepreneurshipin Germany.

At 83%, the majority of VC deals in Germany are made by all-male start-up teams. Eleven percent go to mixed teams and only five percent to all-female teams. According to KfW, almost nothing has changed in this distribution over the past five years - the difference in deal volume has even increased. For every euro of VC investment in Germany in 2021, 91 cents went to all-male start-up teams, seven cents to mixed teams and just two cents to all-female start-ups.

"It is an uncomfortable truth, but there is a pronounced gender funding gap in the German VC market," says Fritzi Köhler-Geib, Chief Economist at KfW. "In the still male-dominated VC ecosystem, unconscious prejudices and established networks make VC financing significantly more difficult for female founders." As a result, there are fewer incentives for women to found a start-up in the first place. She called for an increase in gender diversity in investment fund teams. This would break down such structures.