A message to women founders: you're not lucky to receive investment

The maths isn’t maths-ing when it comes to founder gratitude. So why do we keep acting like it is?

In 2014, 2% of venture capital went to female founders.

In 2024, 2% of venture capital went to female founders.

I know this because I got my start in tech in 2014, working for a VC firm. I had no right to be there - I hadn't set out to work in tech, hadn't planned to spend a decade watching the funding gap for women refuse to move. But here I am, ten years later, watching women founders still being told the problem is the pipeline, still being coached on how to pitch more confidently, still being invited to panels about "breaking barriers" while the barriers stay exactly where they were.

A decade of unconscious bias training. A decade of diversity initiatives. A decade of warm words and cold cheques.

Nothing has changed.

So I want to ask a different question. 

What if we stopped asking VCs to be less biased and started helping women founders understand we hold more cards than we’ve been told?

Risk and carry

Nobody tells you this in pitch training, but when a VC invests in you, they're risking someone else's money. The capital in a venture fund comes from Limited Partners - typically, pension funds, endowments, family offices and wealthy individuals. The VC's job is to deploy that capital and generate significant returns. If they don't, they'll struggle to raise their next fund. That's their risk: not being able to ‘borrow’ more money in the future.

When you accept investment as a founder, you're also risking someone else's money. But you're risking your reputation too. Your financial stability. Your relationships. Your mental health. And - if it fails and you happen to be a woman - your chances of ever raising again.

The toll isn't abstract. It's the 3am anxiety about making payroll. It's the marriage strain when you've remortgaged the house. It's the identity crisis when the thing you've poured yourself into for years doesn't work out. VCs don't carry that home with them*. They close the laptop and move to the next deal.

We carry more risk than they do. But right now, they hold more power. There’s a mismatch I want us to fix. 

VCs are playing a different game

Here's something else that pitch training doesn't cover: venture capital is a portfolio model. VCs know that  most startups fail. They're not hoping to beat the odds - they've built them into the maths. Typically, VCs follow something known as power law distribution** - they’ll allow for something like:

• 4-5 out of 10 investments will fail completely (0x return)

• 3-4 will return roughly 1-2x their investment (essentially treading water)

• 1-2 will return 5-10x+ and these drive the entire fund’s returns

The best performing VCs will beat these odds (and an early investment into the next WhatsApp or Uber returns their fund several times over). But essentially, all VCs expect the minority of their startup/investments to cover the losses from the majority. They spread their bets. This is not a criticism - it's just how the model works.

But as a founder, you don't get nine chances to fail and one chance to succeed. Your company is your only shot. You're being asked to show up with absolute conviction in your single bet, while the person across the table is running a diversified portfolio designed to absorb your potential failure.

The VC model actively benefits from founder overconfidence. They need you to believe you're the one in ten. They need you to work hours that no rational portfolio manager would accept for themselves. They need you to absorb risk that doesn't appear on any term sheet.

The founder mythology - the hustle, the conviction, the "bet on yourself" narrative - isn't neutral. It's functional. It serves VCs with their portfolio model. The emotional intensity founders bring isn't a byproduct of startup culture; it's a subsidy. You're providing labour that doesn't show up in any cap table.

The pattern-matching problem

Some VCs will push back here. They'll tell you they add value. Strategic guidance. Introductions. Operational support. Board-level thinking.

And the best VCs absolutely do. It’s why founders *should* be very careful in selecting which VCs they accept investment from. But this implies choice - and that choice (as I’m about to show you) often comes from a position of privilege. 

But most VCs… okay, let me ask you something: how many VCs have you met that have actually built and scaled a startup themselves?

Some have. And those who have tend to bring genuine insight. (And, in my experience, often manage small funds they’ve raised themselves focused on the niche they know inside out). 

But a significant proportion of the people sitting across from you in pitch meetings went from university to consulting to MBA to venture capital. They've never made payroll with money they raised themselves. They've never had to fire someone they hired. They've never lain awake wondering if the pivot they're about to make will kill the company.

What they do, is pattern-matching. And the patterns they're matching to are other founders they've backed - founders who, statistically, look a lot like most VCs. Male. Often technical. Often from the same handful of universities. Often connected to the same networks.

When a woman walks in with fifteen years of domain expertise in an industry she knows inside out, with customers who are already paying, with a problem she understands at a visceral level because she's lived it - that doesn't match the pattern. So she gets asked questions the pattern-matched founders never gets asked. She gets told she needs a technical cofounder. She gets offered less money on worse terms.

And then the industry wonders why the 2% hasn't moved.

What the research actually shows

A 2025 study from the National Bureau of Economic Research looked at something nobody had examined closely before (surprise surprise): male and female cofounders who built the same startups together. Same company. Same idea. Same outcome. The only variable was gender.¹

After a startup failed, the women co-founders were 30% less likely to get funding for their next venture than the men who'd been involved in the exact same failure. When women did secure funding, they raised 53% less capital than their male cofounders.

And here's where the data is properly damning: male entrepreneurs' deal sizes were 5% larger following unsuccessful exits.

Men are being rewarded for failing. Women are being punished for it.

I'll say that again, because I need you to hear this: a man can fail at a startup and walk into his next pitch meeting with more credibility. He comes out with 5% more funding than before his first company failed. A woman fails at the same startup - literally the same company, the same outcome - and she's 30% less likely to get funded at all.

Success doesn't fix it

You might think: fine, the system is unfair to women who fail, but surely if a woman succeeds, she's proved herself?

No.

The same research found that after a successful exit, women were still 27% less likely to secure VC funding for their next venture than their male cofounders. Than the men who'd shared the exact same success. On average, second-time female founders raised $28 million less than their male counterparts.

Let that land for a moment. A woman can build a company alongside a man, exit successfully, and still face worse odds and lower funding when she tries to do it again.

The goalposts don't move closer when you score. They move further away.

The spillover effect

Perhaps the most revealing finding from the same research: when a VC experiences a failure with a woman-founded startup, they don't just penalise that founder. They reduce deal sizes for all women founders they invest in for the next five years.

One woman's failure becomes every woman's problem.

There's no equivalent pattern for male founders. A man can fail, and it's treated as individual experience - character-building, even. A woman fails, and it confirms a bias that gets applied to every woman who walks through that VC's door for half a decade.

Before you shout at me (for I know you’re a data-savvy lot): this isn't statistical updating. If it were, VCs would increase deal sizes for women after experiencing success with a woman-founded company. They don't. The research found no positive spillover from women's successes. Only negative spillover from failures.

There’s literally no way to dress this up as ‘learning’. It’s confirmation bias, pure and simple, dressed up as pattern recognition.

The bit that should make you angry

So, here’s what makes this irrational rather than just unfair.

The National Bureau of Economic Research (NBER) study found that female founders had better success rates with their subsequent startups, despite raising less money.

Read that again.

Women are raising less capital for their second startup than their male co-founders, and STILL deliver better outcomes.

Investors are systematically undervaluing founders who demonstrably perform better.

This isn't just discrimination. It's bad investing. VCs are leaving returns on the table because they can't see past their own pattern-matching (bias). They're so busy looking for founders who fit the template of previous successes - which, due to historical funding patterns, means male founders - that they're missing better bets.

The 2% figure isn't evidence of a ‘pipeline problem’. It's evidence of an allocation problem. Statistically, the money is going to the wrong founders.

A shift is coming

There are signs the landscape is changing - though not because VCs suddenly developed better judgment.

Carta's 2025 Founder Ownership Report found that 35% of all startups incorporated in 2024 were solo-founder led, up from 17% in 2017.² That's more than doubled in less than a decade. The "you need a cofounder" orthodoxy - often code for "you need a technical cofounder", (often code for "you need a man") - is weakening.

Women with deep domain expertise are building companies without waiting for permission. Without waiting for a technical cofounder. Without waiting for a VC to validate their market understanding.

And increasingly, they're proving the model works through revenue, through customers, and through traction that can't be pattern-matched away.

The same is true of some smaller VC funds focused on supporting diverse or previously excluded founder groups. They’re proving that women founders, founders of colour, founders outside of tech hotspots and elite university programmes, all make good bets.

So what now?

I'm not naive enough to think that individual mindset shifts will fix structural discrimination. The system needs to change. LPs need to ask harder questions about where fund money goes. The industry needs accountability that goes beyond diversity reports that nobody reads.

But here's what the last decade has taught us: waiting for VCs to become less biased hasn't worked. The number hasn't moved. And while the industry slowly figures out how to do better - if it ever does - individual women founders are walking into pitch meetings every day, absorbing risk that isn't accurately priced, feeling grateful for opportunities that should be seen as mutually-beneficial.

So let me speak directly to you, if you're a woman founder reading this.

We are not lucky to receive VC investment. If you are raising investment for your tech startup, you are offering someone the chance to profit from your risk, your expertise, your work. The data shows we’re likely to outperform our male counterparts. The data shows we’re doing it while being undercapitalised. The data shows the system is consistently undervaluing us.

That's not your problem to fix by being more grateful. But I do think knowing this, gives us leverage.

We need to start asking different questions in those pitch meetings. 

Not just "will you invest?" but "what do you bring beyond capital?" 

Not just "what are your terms?" but "what's your track record with women founders?” And “Do you support many second-time founders?”?"

If a firm can't answer, that tells us something.

VCs need our outsized conviction, our unsustainable hours, our willingness to bet everything on one outcome - because that's what makes their portfolio model work. Without founders who believe they're exceptional, the whole system falls apart.

As a woman founder, VCs should feel lucky we’re considering letting them invest.

What if we acted like it?

*Sure, ‘not all VCs’. But most.

**Massive thanks to Paul Smith from Founders Circle, for explaining this so clearly.

Footnotes:

¹ Hebert, C., Yimfor, E., & Tookes, H. (2025). Financing the Next VC-Backed Startup: The Role of Gender. NBER Working Paper No. 33943. Available at: https://www.nber.org/papers/w33943

² Carta. (2025). Founder Ownership Report 2025. Available at: https://carta.com/data/founder-ownership/