Female founders in Africa are facing an uphill battle to secure venture capital, with the funding gap widening despite well-intentioned initiatives aimed at boosting investor readiness. In 2024, women-founded startups in Africa received a mere 1% of total VC funding, marking a five-year low. This stark reality was discussed at a recent roundtable, "Accelerating Investment into Women-Led Businesses," organized by Spurt! and the UK-Nigeria Tech Hub, where investment experts and entrepreneurs gathered to identify the root causes of this persistent problem.

According to the participants, the issue lies not in getting women "investor-ready," but rather in the systemic bias that pervades the venture capital ecosystem. Temilade Denton, an Environmental, Social, and Governance expert at Alithea Capital, highlighted the cognitive dissonance that reinforces outdated stereotypes, even among gender-lens investors who claim to address bias. She cited instances of women undergoing due diligence facing highly biased, sometimes absurd, questions, such as whether a female general partner was too fashionably dressed to be taken seriously as an impact investor in Africa.

Beyond individual biases, structural issues in the due diligence process disproportionately exclude women. Investment support experts from various firms, including the Lagos State Employment Trust Fund, Leap Africa, and the Innovation Fund, explored the question of when discrimination enters the due diligence process. They noted that a man's pitch deck is often more polished than a woman's, not because women are less prepared, but because men typically have greater access to early funding, mentorship, and professional networks that help refine their materials.

Some participants suggested that removing demographic biases, such as those related to gender, educational background, or personal networks, could help create a more level playing ground. They proposed affirmative action measures, such as offering tax incentives to firms that actively work towards achieving gender balance in their investment portfolios. By rewarding inclusivity, such policies could encourage investors to adopt fairer funding practices and challenge entrenched biases in venture capital allocation.

However, female founders also have a part to play in bridging the funding gap. They often face skepticism when they do not follow up with investors after receiving feedback, which may stem from confidence gaps, limited access to advisory support, or a reluctance to navigate repeated rejection. Initiatives such as the Lagos State Employment Trust Fund, which provides technical assistance to help women implement due diligence recommendations, can improve their chances of securing investment. Nevertheless, many female entrepreneurs still struggle to access the advisory services and financial expertise needed to compete on equal footing.

As investors work to reduce their biases, women must take proactive steps to increase their visibility, showcase their growth trajectories, and build strong professional networks. Amaka Opara, founding partner of Weave Capital, emphasized the importance of this approach, stating that it's the only way to get capital in a world where investors aren't looking for them.

The struggle of female founders in Africa to secure venture capital is a complex issue that requires a multifaceted solution. By acknowledging the systemic bias and working to address it, investors, policymakers, and entrepreneurs can create a more inclusive and equitable funding ecosystem that supports the growth of women-led businesses.