In 2025, female founders are 31% less likely to secure early-stage funding than their male peers. The disparity doesn’t stop there: if they are successful, they’ll receive around 30% less capital than male founders on average. Based on a survey of 200 UK entrepreneurs and 200 UK business investors, The Investment Reset Report highlights a persistent and concerning gender investment gap.

The report finds that funding processes for businesses remain worryingly subjective and male-dominated. Nearly one-third of investors – the vast majority of them men – still view initiatives to equalise funding as an “unnecessary restraint”, resisting changes that would level the playing field.

The message is clear: the problem isn’t women’s lack of talent or ambition, but a lack of access and opportunity in an imbalanced system.

Not a talent problem – an access problem

The underfunding of women-led startups has nothing to do with a shortage of great ideas or capable founders. It’s increasingly evident that this is an access problem. When female entrepreneurs do get funded, they often outperform. Case in point: women-led businesses are more likely to turn a profit in their first month of operation compared to those led by men (26% vs 21%). They achieve this despite starting out with significantly less capital (women begin with roughly £19.5k on average versus £35k for men).

It’s amplified by the fact that, if women were given more opportunities to start and scaleup businesses at the rate which men do, an estimated £250 billion of new value could be added to the UK economy. These numbers debunk myths that female-led startups are somehow a riskier bet.

Cultural biases and investor blind spots

The number of investors that fail to recognise – or choose to ignore – the bias in the system is one of the report’s most troubling findings. An alarming 71% of investors in the survey did not support unconscious bias training for their firms, opting to believe the status quo is meritocratic. In fact, many place the onus on women to adapt to bias rather than eliminating it: over a third of male investors (34%) in the study insisted the solution is simply “more pitch training” for female founders, whereas just 21% advocated training investors to counter their own biases. When the default mindset is that women need to change their approach, it perpetuates a cycle where processes remain subjective and exclusionary.

With women comprising under 18% of senior investors, decisions are predominantly made in rooms where few women have a seat at the table. Male investors are seven times more likely to have majority male-founder portfolios than female-majority ones, a skew that can’t be explained by merit alone. Many male VCs admit to relying on gut instinct and “chemistry” – criteria that often translate into unconsciously favouring people who look and think like themselves.

The case for more female investors

Women investors can play a critical role in closing the gap, proving twice as likely to invest in companies founded by women. This isn’t about charitable preferences; it’s about recognising opportunities that others might overlook.

Female VCs often bring different networks, evaluate businesses with a broader perspective, and are less bound by the pattern-matching that hinders their male colleagues. Yet, as it stands, they remain heavily outnumbered. Only 18% of senior investment professionals are women, meaning venture capital and angel networks are still overwhelmingly male domains.

Male allies in investment can also make a conscious difference. By seeking out and championing high-potential women-led startups, male investors can help open doors that have been closed for too long. Who writes the checks matters, and a more inclusive investor pool leads to a more inclusive portfolio.

Mentorship, networks, and initiatives like NWEW

Another recurring theme in NWEW’s findings is that women often lack the networks and mentorship that many male founders benefit from. Female founders are almost twice as likely as men to report that women entrepreneurs “don’t know where to find support or lack networks” in the startup scene. This highlights the conservative nature of the startup world. Without access to insider knowledge, influential networks, and experienced mentors, even brilliant entrepreneurs can be left navigating funding rounds and growth hurdles alone.

Initiatives like National Women’s Enterprise Week exist to bridge these gaps. NWEW’s accelerator programme, for example, offers female founders mentorship from investors and pitch coaches, networking opportunities, and direct introductions to venture capitalists and angels. Such programs give women entrepreneurs a chance to hone pitches on a level playing field and build relationships in the investment community. Women tend to value advice and guidance but often don’t know where to find it.

Creating opportunities for women to meet mentors and peers closes the networking gap. Similarly, industry groups, women-led angel investor networks, and founder incubators break the isolation that many women face in entrepreneurship. Through focused support, this helps to balance a system that has long shut women out.

Time to reset the system

Ultimately, closing the gender funding gap requires systemic reform. This includes hiring more women and other underrepresented groups into decision-making roles at investment firms. Programmes that actively reach out to female founders can also make a big difference, identifying high-potential women-led startups that traditional channels miss and preparing them to scale. Investors should also establish mentorship schemes to advise female entrepreneurs and expand their networks.

Firms should set gender diversity targets for their portfolios if they genuinely care about success. Those who have already done so are reaping benefits – the majority (56%) of investors who set gender investment targets reported improved profitability as a result.

Changing entrenched industry norms won’t happen overnight, but the case for resetting the system couldn’t be more compelling. We know that empowering women entrepreneurs yields better profits, faster growth, and broader innovation, and that bias and exclusion are holding them back. So why aren’t we doing something about it? Together, we can transform these bold statistics into bold action, ensuring that the next brilliant female founder isn’t an exception, but the norm.

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