Why female founders still face an unequal playing field in European VC. What the skills data reveals

The latest The VC Factor: Skills Edition report, a joint study by Invest Europe (the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors) and the European Investment Fund (EIF), provides fresh, data-driven insights into the European venture capital ecosystem.

In particular, it reveals how gender intersects with access to capital, education, and opportunities for founders. While skills and qualifications matter, the data shows that gender remains a persistent factor shaping entrepreneurial outcomes. 

Female founders are more educated, yet receive less investments

The report stresses the need for a more inclusive European VC ecosystem recognizing the fact that the world of venture capital and startups is still overwhelmingly male, with higher levels of investment flowing to businesses created by predominantly male teams. 

This reality clashes with one of the report’s most striking findings: women founders tend to be more highly educated than their male counterparts, and more often have degrees from prestigious universities. Yet this does not translate into equal funding outcomes. Quite the contrary.

Startups with predominantly female founding teams receive, on average, about 700,000 euros less per investment round than those led mainly by male founders, despite similar or stronger educational credentials.

This disconnect suggests that education alone does not explain the investment gap, and that structural factors in VC decision-making play a role. 

Structural differences in funding patterns

The VC Factor report shows that gender differences in funding aren’t just about individual skills, they reflect broader structural patterns.

Across more than 3,600 seed and early-stage startups tracked from 2011 to 2021, startups led mostly by men have raised, on average, 79% more venture capital than their peers with a balanced or female-majority composition.

As the authors of the report point out, there are several factors that need to be taken into consideration when it comes to this funding gap.

• Team size: male-led teams tend to be larger, with each additional founder adding almost 700,000 euros to the estimated investment.
• Timing for investment: male-led teams often raise their first investment earlier, giving them a cumulative advantage in raising capital.
• Geography and stage: These teams are more often located in VC-rich regions and enter the market at stages when capital is more freely available

On the other hand, female-led startups often have smaller founding teams and access funding later than their male counterparts, patterns which account for some of the investment gap.

But even after adjusting for these factors, 33% of the gap remains because these structural differences still remain. 

The report also shows that teams with mostly male founders continue to capture disproportionately larger shares of VC funding. While exact percentages vary in different datasets, all-male teams receive the bulk of investment volumes overall: 82% of investment compared with all-female teams that received less than 1.8%.

And as the checks get bigger, the gap widens: all-female entrepreneurial teams represent 3% of total investments below 1 million euros, but only 0.88% of investments above 10 million euros.

Representation still falls behind

Underrepresentation extends beyond funding.

Studies on the broader VC ecosystem show that only about 10 % of founders and CEOs receiving VC in Europe are women.

On the investor side, women remain a minority among decision-makers, with only a small share of senior investment roles held by women (only 14% of top roles in VC firms are held by women). 

Biases that feed the gap

Besides the structural gap, two-thirds of the gap remains unexplained by measurable data such as education, region or sector. The report suggests that this “hidden architecture” is driven by intangibles and investor behavior.

There is no evidence of bias in how the ecosystem rewards measurable traits, education and university prestige are valued similarly across genders. 

The gap is instead driven by factors such as soft skills (leadership, people management), industry knowledge, prior entrepreneurial experience, selling and pitching skills and the depth of personal networks.

The report cites studies that suggest investors may underestimate women’s leadership and pitching skills due to persistent, often unconscious, biases.

How can we help bridge the gap

Decision-makers who wish to support women in entrepreneurship can also take specific steps to identify and support more women entrepreneurs who start companies and scale their businesses.

• Curate programs and events to increase access among women founders. More women can benefit from existing programs and events that support entrepreneurs, especially if they are designed to create deeper engagement.
• Provide more support for women who are scaling their businesses, in addition to the existing initiatives that assist with starting or building companies at earlier stages. Helping more women to scale their companies is critical for addressing the gender gap in entrepreneurship.
• Reduce gender-related bias among investors throughout every step of the investment process. Common mechanisms for sourcing, screening, and investing in entrepreneurs reinforce prejudices that exist more broadly within society.
• Connect women founders with strong networks, such as Endeavor Romania, and curated high-quality mentors.

The VC Factor: Skills Edition doesn’t just map the problem, it suggests that skills and talent alone are not enough to close the gender gap. Systemic change in how VC evaluates and funds founders is required.

Ultimately, funding more businesses founded and co-founded by women, as well as teams from broader academic backgrounds, will bring fresh perspectives and approaches, which in turn will identify new pathways to European innovation and growth.

How the money flows in Europe

One of the chapters of the report explores investment flows across Europe and introduces the concept of “clans” of VC hubs, which function as interconnected yet regionally distinct communities: Benelux, British Isles, CEE (including Greece), DACH, France, Iberian Peninsula, Italy/Malta, and the Nordics/Baltics.

The report points to growing cohesiveness in the European VC ecosystem, although notes that the footprint of national and regional ecosystems remains clearly visible.

Some interesting data show that in 2021, 43% of VC investment flowed across clan borders, nearly doubling since 2007 (23%).

At the same time, the British Isles is the most connected region, acting as the preferred partner for five of the eight of these “clans”, including for Central and Eastern Europe. 

You can find all the data in the VC factor: Skills edition report here.