Women-Owned Businesses Are Growing, Yet The Investment Gap Persists

Even as the share of women-owned businesses grows, gender gaps remain. Per LendingTree, the average revenue of a women-owned business is $1.7 million, compared to $4.1 million for male-owned businesses. Women also own a significantly smaller share of U.S. businesses overall, at 22.9% compared to 61.3% for men. Wells Fargo's "2025 Impact of Women-Owned Businesses Report" further illustrates this, finding that women-owned businesses account for only 9.6% of employment and 6.2% of revenues nationally.

Yet these gaps aren’t a reflection of women’s capabilities as entrepreneurs. Research consistently shows women-led startups outperforming those led by men. According to research from Boston Consulting Group (BCG) in collaboration with accelerator network MassChallenge, startups founded and cofounded by women generated 10% more in cumulative revenue over five years than those founded by men. Women-founded startups also converted investment into revenue more effectively, generating 78 cents for every dollar of funding compared to just 31 cents for male-founded startups.

The more likely culprit of revenue and ownership disparities is a lack of equitable investment opportunities for women compared to men. BCG's research found that women-founded and cofounded businesses averaged $935,000 in funding, less than half the $2.1 million average invested in companies founded by men. PitchBook data also shows that deal count among women-only founding teams has remained mostly flat for the past six years, with women-only teams receiving 6% of deals in 2020, 6.8% in 2023, and 6.2% so far in 2026.

And this investment gap extends beyond formal venture capital. The Global Entrepreneurship Monitor's (GEM) "2024/2025 Women's Entrepreneurship Report" found that around 65% of informal investments globally went to men, and over 75% of men invested in other men. In the U.S., women make up only about 11% of investing partners at VC firms, and nearly 75% of U.S. VC firms have no women investing partners at all, according to research from the Women and Public Policy Program at Harvard Kennedy School. Indeed, the disparity between women- and male-led companies is driven by an investment ecosystem in which women are underrepresented as both recipients and decision-makers.

How to Close the Gap So Women Entrepreneurs Can Scale

The rise of women-owned businesses is an opportunity, but only if the right support structures exist to sustain it. Closing the gap between starting a business and scaling one requires action across several fronts, from addressing who writes the checks to how founders are trained and supported along the way.

• Ensure more women become investors: According to the GEM report, women investors are about 2.6 times more likely to invest in women-led companies than male investors globally, yet women remain significantly underrepresented in the investment space. To close that gap, GEM recommends policies that incentivize women to become investors through tax credits, programs, and training initiatives. U.S.-based groups like Golden Seeds and Pipeline Angels have already demonstrated this model in practice, channeling more women into early-stage investing and directing more capital toward women-led companies in the process. As more women enter the investment ecosystem, more capital flows to the women founders who need it.
• Build up women-focused investment networks: GEM also recommends strengthening women-focused investment networks to ensure women entrepreneurs are represented on both sides of the investment table. This means not only encouraging more women to become investors but also giving women entrepreneurs access to the networks through which early-stage capital flows. Women-led accelerators, peer communities, and targeted sponsorship programs all play a role in connecting women founders to the resources, relationships, and capital required to scale.
• Explore self-funding as a viable path forward: For many women entrepreneurs, self-funding, or bootstrapping, is a strategic choice. According to QuickBooks’ report, over half of aspiring female founders say they would use personal funds to launch their business. While bootstrapping carries constraints on resources, it also provides founders with greater control over business decisions and keeps the focus on building revenue from day one. For women navigating a funding ecosystem that has underserved them, self-funding can serve as a powerful entry point to early-stage growth.
• Expand training and mentorship programs for women entrepreneurs: GEM identifies training and mentorship as one of the most critical levers for helping women-owned businesses scale, specifically programs that address both technical business skills and the psychological barriers that disproportionately affect women founders, including fear of failure and confidence gaps. For institutions, governments and companies, investing in these programs is a concrete way to ensure the current growth in women-owned businesses translates into lasting economic impact.

According to the Women Entrepreneurs Finance Initiative's "Case for Investing in Women Entrepreneurs" report, gender parity in entrepreneurship could add $5 to $6 trillion in net value to the global economy. Women-owned companies also employ a significantly higher share of female workers than male-owned ones, meaning that when women-owned businesses grow, the economic benefits have ripple effects across the workforce. Closing the gap for women entrepreneurs isn't only about leveling the playing field. It's about unlocking a meaningful source of economic growth that would be a missed opportunity if overlooked.