The capital gender gap: How female founders can find funding

Women own more than 40% of America’s small businesses—nearly 13 million companies that employ close to 10 million people and generate more than $1.9 trillion in annual revenue—yet female founders continue to face a persistent capital gap that limits growth, experts say. Linda Fisk, TEDx speaker, international bestselling author and chairwoman of LeadHERship Global, highlighted stark disparities: female-led ventures are significantly less likely to receive venture capital, loan approval rates for women trail men’s by more than 20%, and Black women face particularly steep barriers despite owning 1.5 million businesses that generate about $44 billion a year.

"Nearly 60% say they don't have the same access to capital as male business owners," Fisk said, underscoring fundraising as the top concern among female entrepreneurs even as business formation by women accelerates.

Why the gap persists

Fisk pointed to a complex mix of market and structural issues. A Columbia Business School study cited by Fisk found female-led ventures are 63% less likely to receive venture capital funding, a disparity that exists despite similar exit outcomes: when female-led ventures do receive funding, they are "just as likely to achieve exit outcomes through IPOs or acquisitions," Fisk said. Loan markets show similar bias; Fisk said loan approval rates for female entrepreneurs are more than 20% lower than for men. The funding shortfall is compounded for women of color: Fisk noted that 64% of new women-owned businesses launched last year were started by women of color, yet access to capital for those founders remains limited.

Part of the trend is driven by necessity as well as opportunity. Fisk described a wave of new business formation in which "women started nearly 2,000 net new businesses every single day last year," and many launches are driven by necessity rather than choice. That has contributed to a surge in side hustles—what Fisk calls "sidepreneurs"—with the number of women pursuing side gigs growing at twice the rate of overall female entrepreneurship.

Paths to funding

Fisk urged founders to pursue a range of alternatives to traditional VC and bank loans. Available public and private options she cited include:

• SBA loan programs tailored to women-owned businesses
• Grants through the Department of Commerce's Minority Business Development Agency
• Private grant programs such as the Cartier Women’s Initiative Award, Open Meadows Foundation, and Amber Grants for Women
• Angel and investment groups focused on women founders, including Golden Seeds, Valor Ventures, Funding Sage, Pipeline Angels, Female Founders Fund and Springboard Enterprises

Fisk emphasized that these alternatives can provide critical early capital and connections that help founders scale when traditional sources are closed. She recommended the SBA as a starting point for entrepreneurs seeking guidance and resources.

Despite the obstacles, Fisk offered a hopeful outlook: "In spite of all the obstacles women entrepreneurs face, there has never been a better time in U.S. history to be a woman entrepreneur." She noted that the number of women-owned firms has grown 68% since 2005, a rate "much higher than the national average," and urged founders to tap available avenues for funding and support as they pursue growth.