Here's what VCs are looking for in women entrepreneurs — and why its different for men

Technical.ly

04-03-2025

Startups founded by women face significant hurdles in raising venture capital in the US, but local VC experts say there are strategies they can use to level the playing field.
Female founders should know they're more likely to be asked questions about risk mitigation and potential losses than male counterparts, according to investors at an Innovation Works panel last week. It's part of the systemic issues that can limit the success of female-founded startups.
'Try to flip the question,' said Meredith Meyer Grelli, a former founder and director of Project Olympus, a Carnegie Mellon University incubator program. 'You address their immediate concern and then you quickly move to how you're going to move forward in a positive growth manner.'
VCs are more likely to ask men questions about their startup's potential for gains, while women are asked about the potential for losses, according to multiple studies published in the Harvard Business Review. This bias has been found across both male and female VCs and can have substantial funding consequences for startups, according to the research.
Plus, female-only founded startups raised just 2% of VC funding last year, according to research from PitchBook. That's dramatically lower than startups cofounded by both men and women, which raised around 20% of VC funding last year.
Female founders should also know that male founders are more likely to focus their pitches on their potential and future capabilities, while women often highlight their past accomplishments and achievements, said Lindsay Fairman, a former founder and venture partner at local investment firm BlueTree Venture Capital. This gender gap in self-promotion could be a contributing factor to a lack of funding going to female-founded startups.
'A lot of really smart women that I work with try to package their idea in a way that they think is going to be more palatable or more believable to investors,' Grelli said, 'so they don't go for the big swing and, in fact, that can make them harder to invest in.'
Instead, women shouldn't be afraid to take on bigger, more challenging startup ideas, panelists said, while the community also works to break down barriers to entrepreneurship and build strong female coalitions that drive systemic change.
Don't just network, build genuine connections that pay off later
It's a common saying that deals are made on the golf course, but women aren't always invited to traditional networking opportunities, the panel experts said.
To make more long-standing, genuine relationships connections, creating peer groups is essential, Grelli said.
'Create your own PayPal Mafia of other like-minded people who are going after something hard, who are trying to build something,' Grelli said. 'It might not happen as immediately as the cigar night where you get invited by the partner of a large venture capital firm, but it will help you.'
For example, Grelli said she's organized a cookbook club for a decade and every woman in that group today is either leading or in a position of power at their organization. This approach can be 'playing the long game' but it does pay off, she said.
Also, creating those relationships with people that aren't 'business first' can sometimes be a benefit, Fairman said.
'There's a lot of environments where you're going to be able to get support from people around you by not kicking off with your elevator pitch,' Fairman said, 'but by really just getting to know the person across the table.'
Change starts with encouraging women and girls to 'bet on yourself'
The gender gap in VC funding could be somewhat attributed to the lower number of female founders. In 2024, women represented just 14% of all startup founders, a slight decline from the previous year, according to a 2024 annual equity report from the research and fund management company Carta.
What's preventing women from being a larger proportion of founders? Systemic barriers could be to blame, said Rezzan Kose, a former entrepreneur and venture partner at local investment firm 412 Venture Fund. For example, a persistent gender gap in STEM education could be contributing to the problem, she said.
Later in life, women may face difficulties starting a company because of the unequal division of unpaid labor in the home, Fairman added.
Women aged 18 to 24 spend about eight hours per week on household work compared to about four hours for men, according to research from the Gender Equity Policy Institute. This gender gap in free time widens as people enter their mid-twenties, especially if they choose to become parents, as women do almost three times more childcare than men.
Women often 'reduce their big vision' because they have more responsibilities outside of work, Fairman said, and this is not something that's always taken into account when founders try to seek investment.
Confronting that barrier starts all the way back while girls are still in school.
'I just gave a talk yesterday at a high school and it was for an entrepreneurship club…there were 45 kids in the room and two of them were girls,' Grelli said. 'I think we still do not tell girls that it's okay to bet on yourself.'