Week of 21 September 2020
More women than ever are starting their own business, but they are still raising less capital than their male counterparts. Why is this so and what can we do to fix it? Let’s take a Deep Dive.

💰 All entrepreneurs face the challenge of raising capital to grow their business, but women seem to be having a harder time. Research has found that globally, businesses started and led by women are less likely to receive funding than male-founded companies. 

💄 Reasons include women being less aware of the financing options available, which is especially true for small-scale business owners in developing countries. Women are also more likely to undersell themselves than men during a pitch. At the same time, investor bias is an issue, as VC firms are mostly led by men who may have their own implicit gender biases. They may also be less familiar with the women-centric products that many female-led businesses are offering.   

📈 The gender funding gap doesn’t align with reality. Reports show that while they are less likely to survive, female-founded businesses are outperforming male-founded businesses in terms of revenue. One study even discovered that companies with at least one woman on board tend to have a higher valuation.  

☁️ The impact of the gender funding gap is more far-reaching than losing out on funding. Having access to venture capital also means access to a valuable network of mentors, potential business partners and customers. But times may be changing. Some say technologies like cloud computing and machine learning are helping to level the playing field, as financial firms can more quickly obtain and analyse the performance data of a business.  


“Whilst entrepreneurship has been flourishing... female entrepreneurs represent only 3 percent of deal flow. While the proportion of women-led startups continues to grow, female entrepreneurs are statistically still playing catch-up.”

— António Simões, regional head of Europe, Santander and former chief executive of HSBC Private Banking




US$300 billion It is estimated that there is a US$300 billion gap in financing for female-owned small businesses worldwide.

⅓ HSBC Private Banking found that more than a third of women entrepreneurs face gender bias when raising capital.

US$935,000 On average, female-founded businesses receive about US$935,000 in investment, which is less than half of the US$2.1 million invested in male-led companies. 

US$0.78 For every US dollar of funding, female-founded startups were found to have generated US$0.78 in revenue, which is more than double what male-founded startups generated.

5% Female entrepreneurs receive an average of 5 percent less funding than their male counterparts globally.


According to a global EY survey, what percentage of female entrepreneurs reported that they had no plans to raise capital?

A. 5 percent
B. 10 percent
C. 20 percent

Scroll to the bottom of the email for the answer.


In Southeast Asia, venture capital is still very much a male-dominated world. Some 73 percent of VCs with presence in this region have no female partners at all, according to a 2020 report by DealStreetAsia.  


5 Stories To Get You Up To Speed
  1. The State Of Female Entrepreneurship in 2020

  2. Why Female Founders Are Tapping Female Investors For Cash
    Financial Times
  3. Why Women-Owned Startups Are A Better Bet
    Boston Consulting Group
  4. Women-Led Unicorns No Longer A Myth, But Venture Capital Needs To Catch Up
    South China Morning Post
  5. How The VC Pitch Process Is Failing Female Entrepreneurs
    Harvard Business Review


The Real Reason Behind The Gap

Research suggests that the types of questions asked to female entrepreneurs could be causing the funding discrepancy, says Dana Kanze, who is an assistant professor of organisational behavior at London Business School.


According to Crunchbase News’ Q2 2019 Diversity Report, the global percentage of funding raised by female-founded startups per quarter didn’t exceed 3 percent. The only exception is when the number reached an unprecedented 22 percent in Q2 2018, after China’s Ant Financial raised US$14 billion in Series C funding. At that time, Ant Financial was run by its female founder, Peng Lei.  



There are hurdles unique to a female entrepreneur’s path to securing capital. Find out about the ways to overcome them with this report by HSBC Private Banking.


An Investor Who Is Making Waves 
Arlan Hamilton
Arlan Hamilton is the founder and managing partner of Backstage Capital, which announced the launch of a US$36 million fund to invest exclusively in businesses by women of colour. Prior to this, the US-based VC exhausted three seed funds, which invested in 100 startups that all had at least one founder who is a woman, person of colour or someone who identifies as LGBTQ. 


An honouree to know

Shannon Kalayanamitr
Formerly the chief marketing officer of e-commerce platform Orami, which she co-founded, Shannon Kalayanamitr is now a partner at Gobi Partners. In 2018, she led the venture capital firm to pledge to invest US$50 million in businesses started by women.   



Did you miss our Deep Dive on The Power Of Saying No? Read it here


Unwanted Attention
The struggle to raise capital is not the only problem female founders face. Many also recount the inappropriate behaviours of investors during meetings.

Case in point: Justin Caldbeck of well-connected VC firm Binary Capital, who was accused of making inappropriate advances towards several female founders and women working in tech in Silicon Valley. 


How To Build An Amazing Brand

That's it for this issue. Have a productive week!

The Deep Dive is a weekly close-up look at an idea, issue or trend that’s shaping Asia’s future. This issue was written by Chong Seow Wei, with editing and production by Samantha Topp and Lee Williamson.

We’d love to know what you think of this issue, and future topics you’d like us to cover. Please send your comments to And if you missed it, don’t forget to check out last week’s Deep Dive, on The Power Of Saying No.

The answer to the quiz is C (20 percent).

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