Women entrepreneurs in emerging markets face a daunting gender finance gap when it comes to growing their start-ups into mainstream businesses. New research shows that despite women leading half the start-ups that participate in accelerators—entities designed to train and support the development of start-ups to become investment ready—they continue to face greatly unequal access to capital.
“Venture Capital and the Gender Financing Gap: The Role of Accelerators”, developed by IFC and the World Bank Group Gender Innovation Lab in partnership with Village Capital and We-Fi, studies the steep differential between financing for male and female-led start-ups post-acceleration and finds perceived risk and investor bias are the most likely causes.
The comprehensive research found that acceleration actually seems to increase the gap in equity fundraising. While acceleration is effective at helping male-led startups raise equity, it has little impact on female founders. As a result, male-led startups increase the amount of equity they raise post-acceleration by 2.6 times as much as startups with a female founder.