Female founders are disadvantaged by VCs

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

On average, women-led innovative, growth-oriented start-ups receive less venture capital than companies led 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 development bank KfW, which looks at the challenges of "female entrepreneurship" in Germany.

At 83 percent, the majority of VC deals in Germany are for all-male startup teams. Eleven percent go to mixed teams and only five percent to all-female teams. According to KfW, there has been virtually no change in this distribution over the past five years - and the difference in deal volume has even increased. Of every euro of VC investment in Germany in 2021, 91 cents went to all-male founding teams, seven cents to mixed teams and just two cents to all-female startups.

"It's 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 biases and evolved networks make VC funding much more difficult for female founders." As a result, she said, there are fewer incentives for women to found a startup in the first place. She called for increasing gender diversity in investment fund teams. That way, she said, such structures could be broken up.