Women Can Fund a Better Future—Here’s How

Women make up 51% of the population but only receive 2.8% of available venture capital funding worldwide—leaving a financing gap for women entrepreneurs of about $300 billion. 

Because of the systemic barriers that have enabled disappointing statistics like these to hold true, this reality isn’t all that surprising, but one that desperately needs to be rectified.

Women drive 85% of all consumer spending, so when ventures led by men disproportionately receive a majority of the critical funding needed to grow and scale businesses, we end up with fewer products and services that reflect the needs and wants of women—leaving a market that’s full of potential but greatly underserved. As women are also more likely to lead ventures that prioritize social and environmental progress, a lack of funding puts us all behind in building a better future.

A significant part of the problem stems from a lack of representation in women investors, who are twice as likely to invest in women-led startups, and would add $3.22 trillion in additional capital if they were to invest at the same rate as men.

We need more women investors 

As women investors are more likely to support ventures that are led by women, they play a critical role in building a reality where up to 433 million jobs could be created worldwide, and up to $2.3 trillion could be added to the global gross domestic product by closing the gender gap in entrepreneurship. 

But we don’t have to look that far ahead to see the immense value women investors bring to the table. 

Venture capital firms that increased their proportion of women partners by 10% saw an increase of 1.5% in overall returns each year, and for every dollar of investment raised, women-run startups generated 78 cents in revenue, whereas male-run startups generated only 31 cents.

Meanwhile, women are also leading the charge in investing in organizations that prioritize social and environmental goals.

Why aren’t women investing as frequently as men?

The disparity of investment rates between women and men is due to several factors, including:

Wage Disparities: On average, women are still earning less than men, which hinders their ability to participate in investment opportunities. At the same time, women also feel they need to have access to high levels of income in order to invest—causing them to postpone or avoid it entirely. 

Risk Awareness: Women tend to view investing more holistically and are more aware of the risks that come with it. This can cause them to take more time to make investing decisions, and less likely to take part in opportunities that might provide short-term wins but don’t necessarily meet their long-term goals.

Lack of Representation and Engagement: Globally, only 28% of women feel confident about investing, and only 33% see themselves as investors. This stems from a lack of women role models and mentors in the investment world, which contributes to a gap in investing engagement.

Let’s fix this

Movement51 (M51), The51’s sister company, is addressing the disparity in investment risk awareness, representation, and engagement through specialized programming for both investors and founders.

The Financial Feminism Investment Lab (FFIL) dives into everything you need to know to start investing with confidence—no matter where you’re starting from.

Jump on the mailing list to hear about the upcoming cohort if you’re interested in capacity building and learning from some of the brightest industry experts around inclusive investing.

M51 also offers one-day bootcamp courses for aspiring investors to build their knowledge foundation—often hosted in-person in cities across Canada. If you’re interested in taking part when one is coming your way, you can sign up for the waitlist to be the first to know.

And for even more resources (both on-demand recordings and live sessions), check out M51’s “How To” webinar series.

Looking forward

It’s estimated that the gender gap in economic participation will take another 265 years to close if the world sticks to its current rate of progress. 

We’re sure you’ll agree with us in saying that’s far too long to wait. 

The good news is that we’re already starting to see positive shifts. 

In 2018, just 44% of women invested outside of their retirement accounts. Today, 67% are exploring investments outside of retirement. Younger women are also participating more frequently, with 71% of Gen Z and 63% of millennials now investing.

To reach our potential, we’ll need to continue to address the investment disparity between women and men while helping to increase funding access to women-led ventures.

We’re honoured to be joined by a community of 29,500+ who have joined us on our mission to connect investors and founders who demand better.

Be part of moving the needle by staying on top of upcoming plans or being part of The51 Founder Community to foster connections, access our partner resource hub and tailored education, and surround yourself with others dedicated to building the financial feminist future.