Innovation and Inclusion: Women Changing the Face of VC

Women in venture capital and female founders continue to face significant barriers, even as conversations around diversity and inclusion grow louder. The 2024 annual report from European Women in VC, reveals that annual investment in startups (co-)founded by women has increased by more than 10x over the past decade. 2023 was the third-highest year on record for VC investment in European women (co-)founded startups. However, startups (co-) founded by women still only raise 10% of total VC funding in Europe. Despite their critical contributions to innovation and entrepreneurship, the funding landscape remains starkly unequal.

In TempoCap’s portfolio, 67% of companies had mixed-gender leadership teams in 2023. Although not a perfect comparison, as we do not track founding teams, but executive teams instead, this appears to indicate a better balance than the industry figures noted above. This is an improvement from 2022, when 65% of portfolio companies had mixed-gender leadership. Nevertheless, there is still a great deal to be done to move towards gender equality.

The underrepresentation is not limited to founders. Female investors remain a minority in VC firms, which perpetuates a cycle of missed opportunities for diverse founders. EWVC’s 2024 survey uncovers that just 9% of European VC AUM is held by female GPs. Yet, the survey suggested that an increase of 10% points in female presence on decision-making level in VC is correlated with a 1.3%-point increase in IRR. While TempoCap does have meaningful female representation, we remain some way from gender equality at the GP-level.

This October and November, I had the privilege of participating in two impactful events: the WVC:E (Women in Venture Capital: Europe) Summit and Playfair Capital’s Female Founders Office Hours (FFOH). Both initiatives celebrated female investors and founders, tackled the barriers they face, and explored actionable solutions for building a more equitable ecosystem.

Amplifying Women in VC at WVC:E Summit

At the WVC:E Summit, over 350 female attendees gathered for discussions that ranged from scaling startups to board diversity. As part of the event, I moderated a panel titled “Unlocking Liquidity: The Low Down on the Secondaries Market” alongside the brilliant Kaidi Ruusalepp (Venture Wave Capital) and Jemma Bruton (Salica Investments). Together, we delved into the growing significance of secondary transactions as a vital tool for providing liquidity to both founders and investors in an increasingly mature venture ecosystem. The conversation highlighted the transformative potential of secondary markets to unlock value while addressing the challenges and opportunities they present.

This panel was particularly meaningful for me as it was my first time moderating in the VC space. The supportive and collaborative atmosphere at WVC:E made the experience all the more rewarding. It was inspiring to connect with so many talented women, and the event reinforced the value of creating spaces that empower and amplify their voices in the ecosystem.

Driving Change Through Playfair’s Female Founders Office Hours

In November, Playfair Capital’s Female Founders Office Hours brought a different but equally impactful perspective. Since 2019, this initiative has connected over 2,500 women-led startups with 200+ investors, facilitating over 10,000 personalised mentoring and pitch meetings. Founders who have participated in FFOH have collectively raised more than £1.4 billion.

Being part of FFOH was a reminder of the diversity and ambition of female founders. Each meeting showcased a new story, a novel idea, or a bold solution, from revolutionary healthtech platforms to scalable green energy solutions. The personalised feedback and access to investors that FFOH offers is an invaluable resource for many women founders, supporting them in refining their pitches, building confidence, and navigating the challenges of securing funding in a competitive ecosystem.

A Dual Focus: Female Founders and VCs

Both events highlighted not only the immense talent and drive of female founders but also the systemic challenges they face. Securing capital remains one of the most significant barriers for women-led startups. Initiatives like FFOH are making an impact, but the scale of the problem requires broader structural change.

Representation in decision-making roles within VC firms is also a crucial factor. With fewer women in investor roles, the industry lacks the diversity needed to challenge biases and champion innovative solutions from female-led teams. This creates a cyclical problem where women founders struggle to find advocates who understand their perspectives.

Reflections and a Path Forward

Despite these challenges, there is an undeniable sense of momentum. The WVC:E Summit emphasised actionable solutions, while FFOH demonstrated the tangible impact of mentorship and direct investor access. Together, these initiatives are proof that change is possible when the ecosystem actively works to include and support women.

The journey toward gender equity in venture capital and startups is far from complete, but the work being done is creating meaningful progress. Events like the WVC:E Summit and programs like FFOH are critical in ensuring that female founders not only survive but thrive in a competitive and often inequitable industry.

As part of the venture ecosystem, it’s our responsibility to sustain this momentum. This means advocating for equitable funding practices, supporting programs that connect female founders with investors, and pushing for diversity within our own organisations. More than that, it means recognising and addressing the systemic biases that hold women back, from the early stages of fundraising to the boardroom.

Both the WVC:E Summit and FFOH reminded me of the incredible potential of female founders to transform industries. Their ideas are bold, their leadership inspiring, and their resilience unwavering. By continuing to champion their efforts and breaking down the barriers they face, we can build a venture capital ecosystem that is not only more equitable but also more innovative and dynamic.

Diversity encompasses far more than simply increasing the representation of women. Extensive research reveals that venture capitalists are more inclined to choose startups whose founding teams share their social identity, whether it be ethnicity, gender, or educational background. Building a truly vibrant, diverse, and inclusive ecosystem requires ongoing commitment, collaboration, and concrete action. The rewards, however, are undeniable: a thriving venture capital landscape where all founders and investors have the opportunity to succeed. Indeed, two recent Sifted articles published this year (linked below) highlight that there is still significant progress to be made and important discussions to be had.

At TempoCap, we are dedicated to being part of this transformation.

Written by Marie-Sophie Ausch, Analyst at TempoCap.

Sifted Articles:

https://sifted.eu/articles/venture-capital-similarity-bias-brnd

https://sifted.eu/articles/women-vc-tax