The world of entrepreneurship is often hailed as a bastion of innovation and limitless potential. Yet, for female founders across Europe, this promise remains riddled with systemic barriers, particularly when it comes to securing funding. Despite growing awareness and incremental improvements, the gender funding gap persists, leaving significant potential unrealised. 

State of Play: Female Founders in Europe

The numbers tell a stark story. Female-founded companies in Europe received a meager 2.8% of venture capital funding in 2023, a figure that underscores the entrenched gender disparities in the startup ecosystem. 

This issue is not confined to a single country; it’s a pan-European challenge. In France, women make up 28% of founders but secure just 4% of funding. In Germany, the figure is even bleaker, with female-led startups attracting only 3% of venture capital. 

Meanwhile, in the UK, funding for female founders remains below 10%, despite nearly equal representation in entrepreneurship between men and women.

While the overall number of female founders is growing, with women now accounting for 20-30% of new startups across Europe, the funding disparity remains stubbornly wide. The gap is not merely a statistical concern; it reflects missed opportunities for innovation and economic growth.

Reimaginez is a purpose-driven company that focuses on transforming the way organizations and individuals approach leadership, entrepreneurship, and innovation. 

The company specializes in advising visionary leaders, founders, and executives to create thriving, high-performance company cultures aligned with their values. 

As its founder Therese Gedda observes, the most hidden potential in tech is women. “Unlocking this potential could yield transformative benefits across industries—from life sciences to finance—bringing unparalleled impact, profit, and value to humanity,” she says.

Trends: Progress Amidst Challenges

The trends present a mixed picture. On the one hand, there are encouraging signs of progress. For instance, 2024 witnessed significant investment rounds for female-founded companies such as Sweep, a French startup helping firms reduce their carbon footprint, which raised a $100 million round. 

Additionally, the European Business Angel Network (EBAN) reports that female angel investors now represent 24% of all angel investors in Europe, up from 20% in 2021. Programs like Fund F, a €20 million initiative supporting female founders, aim to address these imbalances by fostering more female investors and backing women-led startups.

However, these bright spots are overshadowed by the broader stagnation in funding. As of Q2 2024, female founders still received less than 3% of total VC funding, with stark regional disparities. 

While Sweden stands out with 15% of VC funding going to female-led companies, countries like France and Germany continue to lag far behind. The incremental progress highlights a deeper systemic issue that requires a more concerted and multifaceted approach.

The role of initiatives such as Thousand Faces

Organisations such as Thousand Faces are stepping up to tackle this disparity head-on. Dedicated to empowering impact-driven female founders, Thousand Faces provides funding and a supportive network to help women build sustainable, meaningful organizations. Central to its mission is addressing the root cause of underfunding: the lack of female investors.

Thousand Faces’ Impact Angel Investing Program, launched in 2024, is a 12-week initiative designed to train more women to become angel investors. The program includes real deal flow from female-founded startups, allowing participants to learn by doing and directly fund these businesses. This hands-on approach not only equips women with the skills and confidence to invest but also creates a virtuous cycle of support for female entrepreneurs.

The ultimate goal of Thousand Faces is ambitious yet necessary: to build a community of female investors who actively fund and champion women-led businesses. By addressing the funding gap at its source, initiatives like this can create long-term, systemic change.

Its founder Moojan Asghari lays out the challenge:

Current trends reflect both optimism and frustration. There are positive changes, but they are far from enough to close the gender funding gap. 

Initiatives such as the UK Women’s Task Force and government-backed funding programs have brought attention to the underrepresentation of female founders. Additionally, 2024 saw some big rounds of investment for female-founded companies. 

Thousand Faces’ ultimate goal is to build a community of female investors who actively fund and support women’s businesses, closing the funding gap at its root.

Why Investing in Women Makes Sense

The case for investing in female founders extends beyond social equity; it’s also a sound business decision. Research consistently shows that diverse teams outperform homogeneous ones, leading to better decision-making and stronger financial performance. Companies with female leadership are more likely to prioritize sustainability, employee well-being, and long-term growth, aligning with the values of modern consumers and investors.

Moreover, the untapped potential of female founders represents a vast opportunity for innovation. As Reimanigez’s Gedda highlights, entrepreneurship is limitless. Women-led startups are pioneering breakthroughs across industries, from climate tech to health care. Yet, these ventures often struggle to access the capital needed to scale, limiting their impact.

Men Can Help

The path to gender equity in entrepreneurship is not solely the responsibility of women. Men play a crucial role as allies and advocates. Men can support female founders by being an advocate for diversity across their networks, by offering guidance, resources and opportunities to female entrepreneurs through mentorship and sponsorship programs and ensuring investment decisions are free from bias and actively seek out diverse founding teams.

According to Asghari, Thousand Faces, male allies are an integral part of the solution. The organisation’s angel investing program includes a dedicated seat for a male participant, underscoring the importance of collaborative efforts. Additionally, male mentors and lecturers in the program demonstrate that gender diversity in investing is not just socially valuable but also financially smart.

The Broader Ecosystem: Steps Forward

Addressing the funding gap for female founders requires a holistic approach. Policymakers, investors, and industry leaders must work together to dismantle systemic barriers and create a more inclusive ecosystem. Key steps include:

• Expanding Funding Options: Traditional venture capital is not the only path to success. Alternative funding models like bootstrapping, customer funding, joint ventures, and strategic partnerships can provide vital support for women-led startups

• Policy Interventions: Governments can play a pivotal role by implementing policies that incentivize diversity in funding, such as tax breaks for investments in female-founded companies

• Visibility and Representation: Highlighting the successes of female founders and investors can inspire the next generation and challenge stereotypes

• Data Transparency: Collecting and publishing data on gender disparities in funding can hold stakeholders accountable and drive progress

Realising the Potential of Female Founders

The underfunding of female founders in Europe is not just a gender issue; it’s an economic and social missed opportunity. By addressing the so-called glass ceiling that holds women back, Europe can unlock a wave of innovation and impact that benefits everyone.

The journey toward equity is challenging, but the rewards—a thriving, inclusive entrepreneurial ecosystem—are well worth the effort. The time to act is now. By investing in female founders, Europe can lead the way in building a more equitable and innovative future.