Addressing the Gender Gap in Entrepreneurship: Insights from Professor Gerges-Yammine

Despite evidence of strong returns, women-led ventures face consistent barriers in securing venture capital funding. Professor Rand Gerges-Yammine reveals how gender bias impacts female founders and offers solutions to promote equity.

According to the World Economic Forum, a mere 2% of all venture capital funding was awarded to women-led startups in 2023. Despite evidence that female-led startups generate twice the revenue per dollar invested compared to their male-led counterparts, women entrepreneurs still face significant obstacles in securing venture capital funding.

In the 2024 edition of the Impact Papers, Dr. Rand Gerges-Yammine, Assistant Professor in Entrepreneurship at ESCP, shared an extensive analysis of gender dynamics in entrepreneurial ecosystems. "The allocation of venture capital fundamentally shapes our collective economy," says Prof. Gerges-Yammine, whose research includes ethnographic studies at investment funds and interviews with women entrepreneurs across Europe.

The widening gender funding gap in venture capital

The data shows a troubling trend. According to a 2022 study by French NGO SISTA spanning France, the UK, Sweden, Germany, and Spain, women-led startups receive four times less funding than their male counterparts—a sharp decline from 2.4 times less between 2008 and 2019. Only two women-founded startups successfully raised more than €50 million, compared to 215 male-founded startups achieving the same milestone.

Studies across the venture capital landscape also reveal:

• Women represent only 5–15% of the venture capital workforce in the European Union, primarily in junior positions.
• Women-led startups secure only 25% of the funding they request, while men secure 52%.
• Even in women-dominated industries, female founders raise significantly less than male counterparts.
• Gender bias affects market evaluation across all sectors.

Why do women entrepreneurs struggle to secure funding

The root causes of the gender funding gap are multifaceted, driven by unconscious bias, the underrepresentation of women in venture capital leadership, and cultural stereotypes about the qualities that define an entrepreneur. These factors contribute significantly to the growing disparity in funding outcomes – a dual loss, as women-led startups not only deliver higher returns on investment but are also more likely to prioritise societal impact and sustainability.

Closing the funding gap for women-led startups

Prof. Gerges-Yammine recommends a three-pronged approach to confront the systemic inequities of the venture capital ecosystem:

• Implementing mandatory quotas in investment firms, following France's successful Copé-Zimmermann law which achieved 46% women representation on corporate boards;
• Transforming the ecosystem by diversifying the venture capital workforce;
• Raising awareness through mandatory unconscious bias training and standardised pitch evaluation criteria within venture capital firms.

Closing the gender funding gap will only be achievable through more deliberate efforts to foster inclusivity. According to a Paris-based senior investor interviewed for Prof. Gerges-Yammine’s study, “Creating a more inclusive environment for female investors is essential for closing the funding gap and promoting a more diverse entrepreneurial ecosystem.”

Read Professor Gerges-Yammine’s impact paper or watch the full interview for further insights on bridging the gender funding gap.