An analysis of the underlying reasons for the gender funding gap in the context of start up financing based on data From The German start up association

Abstract

A qualitative and quantitative research design is used to identify the underlying reasons for the existing gender funding gap by analyzing gender differences among founders and investors. The evaluated dataset has been collected by the German Startup Association in 2022. The findings indicate that the funding gap narrows for female-founded startups showing the following characteristics: having a co-founder, exit and exponential growth ambitions, a preference for external capital, and a startup in a VC-typical industry. However, the funding gap does not fully diminish, leading to the conclusion that VC investment decisions are driven by biases and lack female as decisions-makers.