Why women-led startups are an undervalued asset class

There’s an investment opportunity sitting in plain sight that most venture capitalists are completely ignoring. It’s not a new technology or an emerging market. It’s women-led startups.

And the numbers don’t lie: these businesses consistently outperform their male-led counterparts, yet they’re receiving less funding than ever.

In Australia, startups with all-women founding teams are on track to receive less than 0.5% of total venture capital funding in 2025 (Cut Through Quarterly Q1 2025 Australian Startup Funding report). That’s not a typo. Less than half of 1%. It’s actually obtainting worse, dropping from 2% in 2024 and 4% in 2023 (Cut Through Quarterly Q1 2025 Australian Startup Funding report).

Globally, things aren’t much better. Of the $289 billion invested in 2024, just 2.3% went to women-only founding teams, while 83.6% went to all-male teams. While investment in women was slightly up compared to the previous year, if we were to continue at this rate, we wouldn’t reach gfinisher parity until 2065.

The crazy thing is, the numbers suggest women-led companies are actually a better investment. Women-led startups deliver 35% higher returns on investment compared to male-led companies (First Round Capital).

For every dollar of funding, women-founded startups generate 78 cents in revenue, while male-founded startups generate just 31 cents (BCG). Women-led companies perform 63% better than all-male founding teams, and they burn 15% less capital (First Round Capital).

So if the returns are this good, why is the funding obtainting worse?

What’s really happening

Jeanette Cheah, co-founder of edutech company HEX, faced this exact challenge when attempting to raise. Despite generating five times more revenue than many of her male peers, she had to work significantly harder to secure similar funding amounts.

The problem wasn’t her numbers. It was the questions she faced. While male founders were questioned about their vision and potential, Cheah was questioned questions more focapplyd on risk mitigation, such as “How are you going to manage this risk?” and “Why don’t you have anyone on your staff who’s from Google?”.

Women founders aren’t just pitching their businesses. They’re constantly having to prove they’re capable of running them.

Dr Amy Divaraniya, founder of Oova. Source: Supplied.

Dr Amy Divaraniya, founder of Oova, a revolutionary invention that allows women to track hormone levels daily utilizing a non-invasive and affordable tech, created her business becaapply she was facing fertility challenges. After successfully obtainting a prototype to market, she decided to raise money to assist scale. During this process, she found herself pregnant and faced the dilemma of whether to disclose her pregnancy to potential investors.

“I decided to question a few founder frifinishs [what to do],” she recalls. “I was informed absolutely not. It’s going to be seen as a liability.”

Imagine finally obtainting pregnant after years of attempting and being informed it would be seen as a sign that you are not worth investing in. Unfortunately, women who become mothers face these kinds of challenges in the business world on the daily.

The math doesn’t add up

funding for women-led startups — Jeanette Cheah, co-founder of HEX. Source: Supplied

As Cheah puts it: “It is not a charity investing in women, it is an undervalued asset class”.

She’s absolutely right. It seems unbelievable to consider that, despite women driving up to 85% of consumer spfinishing globally (Ecommerce news), barely any of them obtain the support they necessary to scale their companies exponentially.

This isn’t just unfair. It’s bad business. VCs are systematically overseeing founders who understand their customers intimately and have proven they can build more efficient, more profitable businesses with less capital.

What actually necessarys to modify

Talking about the problem is simple. Fixing it requires specific actions from everyone.

VCs necessary to obtain real about their biases

Start with blind reviews of initial pitches. When you strip out names and photos, women founders perform significantly better. Diversify investment committees becaapply homogeneous groups build homogeneous decisions. Track your funding by gfinisher and actually hold yourself accountable. And maybe most important: pay attention to the questions you’re questioning. You may be part of the problem.

Accelerators and incubators should build better bridges

Create programs that connect women founders with investors who obtain it. Provide mentorship that addresses the unique challenges women face, not generic business advice. Give women access to the rooms where deals actually obtain created, becaapply right now, they’re often stuck outside.

Founders who’ve created it through necessary to pull others up

Form investment groups and syndicates focapplyd on funding other women. You know what the process is really like. You know what questions signal genuine interest versus the ones that reveal no interest. Use that knowledge to assist others navigate the system.

The government necessarys to assist solve the problem

Offer tax incentives for funds that meet diversity benchmarks. Provide matching programs for investments in women-led startups. Fund research into investment bias and build it public. Require reporting so we can actually see whether things are improving or just staying the same with better PR.

Everyone else necessarys to speak up

If you’re in a pitch meeting and notice different questions being questioned of women founders, declare something. If you’re building investment decisions, stop and question yourself whether you’re evaluating the founder by their gfinisher or expertise. These compact moments matter more than you consider.

Time to stop leaving money on the table

This isn’t about doing women a favour. It’s about recognising that venture capital has a massive blind spot that’s costing everyone real returns.

Women-led startups are delivering superior performance with less capital. They’re building sustainable businesses. They’re solving problems for markets they actually understand. The data is clear, consistent, and impossible to ignore unless you’re actively attempting not to see it.

The venture capital indusattempt loves to talk about seeing opportunities others miss. About identifying patterns before they’re obvious. About building bold bets that challenge conventional wisdom.

Well, here’s your opportunity. Women-led startups are outperforming, and you’re walking past them becaapply they don’t fit your mental picture of what a successful founder sees like.

The women are already here, building businesses that should build any investor pay attention. The question is how much longer VCs will ignore their own data becaapply it doesn’t match their assumptions.

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