The funding landscape for female founders has taken a concerning turn, with 2024 figures revealing a significant decline in investments. According to recent data, female CEOs raised a mere $48 million, a staggering four times less than the previous year and the lowest figure since 2019. In contrast, their male counterparts secured a substantial $2.2 billion, highlighting a persistent and troubling funding gap.

This disparity is not a new phenomenon, but rather a symptom of systemic challenges that female entrepreneurs face in accessing capital. Lexi Novitske, General Partner at Norrsken22, a growth fund that invests in African startups, and Precious John-Adeyemi, Investment Analyst at Norrsken22, shared their insights on the barriers female founders encounter when seeking funding.

One significant hurdle is networking, with female founders often connecting within their own circles, while the investment world remains largely male-dominated. Additionally, women tend to start businesses in sectors that venture capitalists perceive as less scalable or profitable, making it more challenging to secure funding. Limited access to networks also hinders women's ability to establish relationships crucial for business growth.

However, there are signs of progress. More women are leading funds and joining investment teams, which helps to tilt the bias in a more positive direction. The rise of female-focused VC funds, accelerators, and grant programs has also contributed to increased recognition of the funding gap. Norrsken22, for instance, is proactive in tracking the number of female-led startups that come through their pipeline.

When evaluating startups, venture capital firms typically look for strong fundamentals, such as unit economics, traction, market size, and scalability. While these factors are not inherently missing in female-led startups, biases in the investment process can lead to different perceptions. Addressing these biases is crucial for creating a more equitable investment landscape that fully recognizes and unlocks the potential of female founders.

To increase their chances of securing funding, female founders should prioritize strong revenue growth, healthy unit economics, and a clear path to scalability. They should also focus on leveraging AI to drive efficiency, automation, and transformation in legacy industries, as this is an area of significant interest for investors.

Resources such as angel networks, female-founder-focused communities, and broader founder networks can provide valuable support and connections for women entrepreneurs. These platforms offer a space for knowledge-sharing, mentorship, and investment opportunities, increasing the chances of securing funding.

The funding gap for female founders is a pressing issue that requires attention and action. By acknowledging the systemic challenges and biases, and working to address them, we can create a more inclusive and equitable investment landscape that unlocks the full potential of women-led startups.