Companies started or co-started by women got, on average, $935,000 in funding. That’s less than half of the $2.1 million funding received by companies started only by men.
Even though there’s this difference, companies with women founders did better over five years. They made 10% more money, totaling $730,000, compared to $662,000 for companies started only by men.
When we look at how well companies turn their investment into money, those started or co-started by women are way better. For every dollar they got in funding, they made 78 cents. But companies started only by men made just 31 cents for every dollar they got.
Source: Why Women-Owned Startups Are a Better Bet, Boston Consulting Group
The investment gap is a real issue, and it’s even bigger than initially thought. However, according to the report there are strategies to address it.
- By recognizing the biases that disadvantage women, venture capital firms and investors can make fairer funding decisions.
- Accelerator programs play a role by providing mentorship, resources, and networking opportunities.
- Women founders, while advocating for long-term changes, can also navigate the existing system strategically.
Fixing the inherent unfairness in investment decisions will take time, but these recommendations are a good starting point.