Talk is cheap, and so is VC funding for women founders
VCs love to talk about supporting women-led startups. But the numbers reveal that once the startups try to scale, the cheques get smaller.
Another year, another round of statistics showing women founders getting the short end of the funding stick.
The latest State of Australian Startup Funding report told a familiar story: early-stage deal participation for women founders is improving but the share of funding they receive beyond the seed stage continues to lag.
Early-stage progress offers hope, but scaling remains a major hurdle
This time around the report, put together by Cut Through Venture and Folklore Ventures, revealed women’s early-stage participation had reached record highs.
Women-led or mixed-gender founding teams accounted for 42% of angel and pre-seed deals and 29% of seed rounds. This is a significant uptick from 2023 and shows the push to diversify early-stage funding is moving the needle.
But this optimism quickly fades when you look at anything beyond seed rounds.
At the Series A stage, representation fell to 19%, down from 22% in 2023, and it remained stuck at just 16% for Series B+ deals.
This underscores a persistent problem: while progress is being made at the start of the funding lifecycle, women founders continue to face systemic challenges when it comes to accessing growth capital.
And it’s more dire than it seems. In fact, funding for women is getting worse overall.
The report revealed only 15% of the share of overall capital in 2024 went to teams with at least one woman founder. This was down from 18% in 2023 and 20% in 2020.
Just to be clear, that is not all-women founding teams. Funding is down for any startup with a woman founder in the mix.
Big VCs talk the talk, but dollars still aren’t following
Australia’s larger VCs have been vocal about their commitment to funding women founders, but the latest data shows that talk hasn’t translated into sufficient investment beyond the earliest stages.
VCs frequently point to the so-called “pipeline problem” when investment in women is brought up. But as the rising early-stage deal participation shows, the pipeline is no longer the issue.
Instead, structural barriers that prevent women founders from successfully scaling their businesses remain the key bottleneck.
The drop-off in Series A and B+ participation suggests that while early-stage wins are possible, the current funding environment still leaves women founders at a disadvantage when trying to scale.
This disconnect raises questions about how much of the support is real versus performative.
Efforts like Blackbird’s recent mixed-gender funding announcements are encouraging but are simply not enough.
Looking at Blackbird’s own investments in 2024 — two out of the five deals advertised on its website include women founders.
All of these deals were labelled as seed or early-stage investments. However, the two women-founded startups raised $2 million (Clutch Glue) and $1.75 million (Build Club).
Comparatively, the all-male teams raised significantly more – $10.84 million (Atticus) and NZ$4.6 million (Watchful). Veslo was also on this investment list but its raise amount is currently unclear.
It’s worth noting Blackbird was not the only investor in these companies. It’s also not the only VC in Australia that is represented in the report’s numbers.
But the difference in capital is telling when it comes to male versus female teams that were all labelled as ‘seed’ or ‘early’ investment rounds.
Can transparency and community-driven solutions bridge the funding gap?
Initiatives like Equity Clear and Capital X are working to shine a light on the gender funding gap and push for real change.
Soft-launched in late 2023, Equity Clear, co-founded by Scale Investors’ Samar Mcheileh, has over 20 groups — including Blackbird and Airtree — committed to publicly disclosing key investment metrics like the percentage of deals and dollars going to women-led startups.
“What is not measured doesn’t change,” Mcheileh said at the time, emphasising the need for transparency to expose where capital is (or isn’t) flowing.
Complementing this effort is Capital X, which launched in October 2024 as a platform connecting women founders with investors, mentors, and advisory networks.
Both initiatives stress that solving the funding gap isn’t solely a women’s issue—it’s an industry-wide challenge requiring collective action.
Incremental change isn’t enough
While the improvements at the angel, pre-seed, and seed stages are a step in the right direction, they aren’t sufficient on their own to close the funding gap.
Without sustained focus and long-term support from investors, policymakers, and the broader startup ecosystem, women founders will continue to face an uphill battle.
As long as growth capital remains difficult to access, Australia risks stagnating when it comes to gender equity in startups. Programs like Equity Clear and Capital X offer some hope, but their success depends on ongoing engagement and accountability across the industry.
Mcheileh warns in the State of Startup Funding 2024 report that founders should remain cautious of investors who claim to care about diversity but lack genuine follow-through.
“Founders, beware the pink-washing. Not all investment dollars are created equal. Do your investors actually care about the gender gap or are they just very late to a party they ignored for a very long time,” Mcheileh said.
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