SOTA Review

Access to Venture Capital Amongst Female-led Firms.


Associated Themes
  • Finance

While the participation of women in entrepreneurship has increased in recent years, women’s access to venture capital (VC) has not moved at the same pace. The gender gap in VC funding persists, as is also the case in other equity financing markets. Recent studies using socio-psychological perspectives indicate that the gap is associated with gender biases, which affect whether and how women entrepreneurs seek funding and how decision-makers evaluate business opportunities. From the demand side, this relates to some women’s tolerance for risk and their perceptions about external equity capital, which can lead to lower aspirations to seek business growth and to apply for VC funds. From the supply perspective, gendered beliefs about what makes a successful business founder, and lack of female role models may impact negatively on the evaluation of businesses led by women. These barriers may require interventions that go beyond a focus on just improving women’s financial or technical skills.