Female-founded companies secured $38.8 billion in venture funding in 2024, marking a 27% increase from the previous year. However, this rise came amid a 13.1% drop in deal count, illustrating a broader trend of capital being concentrated among fewer, more established female-led startups. The gender gap widened further as all-male-founded companies experienced a higher 33.2% growth in deal value with a smaller 7% decline in deal count, underscoring the continued funding disparity.
Lisa Wu, Partner at Norwest Venture Partners, pointed out the critical need for investors to take a more proactive approach to supporting female founders.
"As investors, we have the power to reverse this funding trend by actively seeking out and investing in female-led companies and by hiring more female investors."
She emphasized that female-led businesses not only fill crucial market gaps but also drive significant economic value, with women expected to control 75% of discretionary spending worldwide in the next five years.
Early-stage financing remains the most significant hurdle for female founders, with only 20.5% of first financings going to women-led startups in 2024, down from 26.5% in 2020. This drop is concerning as it suggests fewer opportunities for new female entrepreneurs to enter and scale within the VC ecosystem.
Becki DeGraw, Partner at Wilson Sonsini, addressed these concerns, stating,
"Early-stage financing for female founders has sharply declined, which makes it even more critical for investors to identify and support diverse entrepreneurial talent from the outset."
Despite these headwinds, there are some promising developments. The number of venture-growth deals for female-founded companies increased for the second consecutive year, signaling a potential shift toward stronger late-stage support.
One factor that could drive long-term improvement is increasing the presence of female decision-makers within VC firms. However, women made up only 17.3% of decision-makers at firms with at least $50 million in assets under management (AUM), and firms with a majority-female leadership remain rare. While representation at smaller firms (under $50 million AUM) was slightly higher at 19.5%, the report highlights the slow progress in shifting the power dynamics within the investment community.
Despite persistent challenges, 2024 saw a record number of 13 female-founded startups achieving unicorn status—companies valued at over $1 billion—bringing the collective post-money valuation of female-led unicorns to over $300 billion. This represents a 15.3% year-over-year increase, fueled by advancements in business software, AI, and healthcare.
Moreover, female-led companies represented 24.3% of total U.S. VC exits, a historic high, signaling greater investor confidence in women-led ventures. While exit values were down due to broader market conditions, the rising number of successful exits could bolster future investments in female-founded companies.
Kristen Craft, VP at Fidelity Private Shares, emphasized the need for continued investor engagement:
“The fact that women-led companies generate more revenue per dollar invested than their male counterparts should be a clear signal to investors that backing female entrepreneurs is not just an equity play—it’s smart business.”
To address ongoing disparities, industry leaders suggest a multi-pronged approach that includes increasing the number of female investors, fostering stronger networks for female founders, and ensuring capital efficiency for long-term sustainability.
Wu advised female founders to stay focused on fundamentals:
"Building a high-quality business with strong financial fundamentals and a clear founder-market fit is crucial. Investors will take notice when female entrepreneurs showcase sustainable, high-growth business models.”
Additionally, alternative funding mechanisms, such as angel investment networks and dedicated female-focused funds, could help bridge the gap. However, female-led funds have deployed just $2.3 billion since 2020—less than 1% of total VC investment during the same period.
As the industry looks ahead to 2025, stakeholders must take deliberate action to address structural inequities in venture financing. While some progress is evident, the path to true gender parity remains long, requiring concerted efforts from investors, policymakers, and business leaders alike.
