Investing in female entrepreneurship and leadership benefits everyone

08/03/2025 • 4 minute read

Judith Sanders

Around the world, women continue to launch businesses at record pace. Yet the capital flowing into those ventures has barely shifted. Despite decades of industry conversations about equality, the pattern has remained stubbornly unchanged: women continue to receive only a sliver of available investment funding and remain markedly absent from senior leadership roles. This gap is often framed as a social issue, but it is equally an economic one. Companies led by women, whether start-ups or publicly listed firms, deliver strong financial returns, build resilient organisations and contribute to broader economic growth. Despite this, the flow of capital and leadership opportunities still favours their male peers.

A persistent funding gap

The gender gap in venture funding remains one of the most persistent imbalances in the investment landscape. Over the past decades, the share of capital going to female‑only founders has stayed extremely low, typically just 1–3% of global VC dollars, with virtually no meaningful progress over time.¹

Access to debt tells a similar story. Female entrepreneurs have a 10% lower chance of loan approval than men with comparable profiles,² and even when they do secure financing, they often face less favourable terms, including higher interest rates, stricter collateral requirements and lower credit limits.³

These finance barriers limit how fast women‑led businesses can grow and push many founders to rely on personal savings or alternative financing. The result is missed opportunities for innovation and economic growth.

“If performance alone determined the allocation of capital, the gender gap in financing would have disappeared a long time ago. ”

Judith Sanders, Sustainable Investment Strategist

Female founders deliver higher returns

If performance alone determined capital allocation, the gender funding gap would have vanished long ago. But the reality points to a mismatch between outcomes and capital flows.

Research indicates that women-founded companies generate more than twice the revenue per dollar invested compared with male-founded firms,⁴ and women-led companies tend to exit faster.⁵ Underfunding such outperforming companies and founders results in missed opportunities that could contribute to broader economic growth and competitiveness. These discrepancies restrict the growth potential of women‑led businesses and increase their dependence on personal funds or alternative financing.

Female leadership remains underrepresented

These experiences in the startup world mirror long-standing patterns in the corporate arena. Women are present at every step of the corporate ladder, but their representation steadily declines the closer one moves to executive and board roles. Globally, women represent over 40% of the workforce but only 28% of leaders. In fields that drive economic competitiveness, technology, engineering, science, the share of women in leadership drops to 14%.⁶

Yet again, the discrepancy cannot be explained by underperformance. Companies with strong female representation at the top are about 25% more likely to achieve above-average profitability.⁷ Firms with even one woman on the board show higher returns on equity than those without.⁸

Examples of companies at the forefront of gender equality include L’Oréal, Veolia and Banco Santander. These organisations are at the forefront of promoting gender balance in leadership and workforce, equal pay and work–life balance.

When women lead, society gains

The benefits of investing in women extend well beyond the boardroom: equal access to funding for women founders could add as much as five 5 trillion dollars to the global economy.⁹ Female entrepreneurs invest above average in health, education and local infrastructure, strengthening social cohesion and raising living standards.¹⁰They hire more women, helping to narrow gender employment gaps and support more inclusive growth. Many also achieve higher environmental, social and governance (ESG) scores than male‑led firms, including stronger performance on governance and environmental practices.¹¹And they are more likely to foster inclusive cultures where employees feel responsible for adhering to rules, reducing incidents of fraud and abuse, and thereby increasing trust in businesses.¹²

Conclusion

Mounting research points to a consistent pattern: companies led by women are frequently associated with strong financial performance, healthier organisational cultures and broader economic benefits. These findings do not constitute guarantees, investment outcomes always depend on market conditions, business fundamentals and strategic execution.

But the persistent underinvestment in women-led companies suggests a structural inefficiency in how capital is allocated. Addressing this imbalance offers investors an opportunity to expand their opportunity set, strengthen decision-making environments and support more sustainable growth.

Judith Sanders
Investment Strategist

¹PitchBook, US VC Female Founders Dashboard
² Bellucci, A., Borisov, A., & Zazzaro, A. (2020). Does gender matter in bank credit access? Evidence from small business lending. Journal of Banking & Finance
³ European Investment Bank. (2025). Debt financing for gender equality in the European Union: 2025 mapping study, OECD,
Financing SMEs and Entrepreneurs; EIB Investment Report
⁴ Boston Consulting Group (BCG), Why Women-Owned Startups Are a Better Bet
⁵ 2019 PitchBook-All Raise All In: Women in the VC Ecosystem - PitchBook
6 Why gender-balanced leadership matters in uncertain times | World Economic Forum
⁷ McKinsey, Diversity Wins (2020)
⁸ Credit Suisse, The CS Gender 3000
⁹Boost the Global Economy: Support Women Entrepreneurs | BCG
¹⁰The Missing Entrepreneurs 2022: Policies for Inclusive Entrepreneurship (OECD Publishing)
Global Entrepreneurship Monitor: Women’s Entrepreneurship Report 2021/2022 (GEM Consortium)
¹¹ European Investment Bank. (2022). Support for female entrepreneurs: Survey evidence for why it makes sense
¹² Diversity and inclusion, The reality Gap (Deloitte), The Diversity and Inclusion Revolution (Deloitte)