Ragtrader Editorial: Female-led entities a missed window for venture capital, expert says

Just 4 per cent of the total $3.5 billion in venture capital funding in 2023 went to 100 per cent female-founded business.

This is according to the latest State of Australian Startup Funding report, which found that 26 per cent of the funding went to businesses with at least one female founder, and 70 per cent went to male-founded businesses.

While this is an improvement from previous years with women founder funding having doubled since 2022, global scaling expert and FD Global Connections founder Trena Blair said there is still a significant amount of work to be done to lessen the gap between female founder-led organisations and their counterparts.

Blair is predicting that this is the time for female founded companies to thrive. With investors becoming more risk averse due to the cost-of-living crisis, they are looking for longer-term investments.

“I feel strongly that this is the perfect time for female founders to put their stake in the ground and secure the investments they deserve,” Blair said. “In the current climate, investors are looking for longer-term investments as opposed to shorter-term, and it’s the female founders that have traditionally more frugal business practices that will shine.

“Many female founders are forced to bootstrap, and as a result, are very much aware of where every cent is spent. They are generally focused on building a strategy that’s going to launch them as successfully as possible, via a considered and often conservative approach to their startup business.”

In the report, Folklore Ventures founder and managing partner Alister Coleman said there are modest improvements in the gender diversity space, with participation in deals recovering from 2022 lows to a five-year peak of 12 per cent and 26 per cent by all-female or mixed-gender teams, respectively.

“As our industry grapples with strategies to improve funding for gender-diverse startups, every surveyed investor agrees that this funding tide must rise,” Coleman said.

Read more HERE.