Women-owned companies raise less funding but generate more revenue, report finds

Despite receiving less funding than male-founded ventures, women-owned companies are generating more revenue, a study has found.

Looking at data on investment funding and revenue generated by 350 US-based startups over five years, a report written by The Boston Consulting Group (BCG) in conjunction with startup accelerator MassChallenge found women-founded startups 78 US cents for every dollar of funding, compared to 31 US cents for those founded by men.

Jane Danziger, partner and managing director in BCG’s Sydney office, said, “Women-owned startups are more effective at generating revenue from each dollar of investment. Women are a better bet for financial backers.”

With the 350 startups included in the study all MassChallenge alumni, the report found startups founded or cofounded by women received, on average, US$935,000 in venture capital funding – half the US$2.12 million raised by male-founded companies.

In spite of this, the report found women-owned companies generated 10 percent more in cumulative revenue over five years, US$730,000 compared to US$662,000.

The report found the gap in funding is “due to gender”, with three key issues the main contributors.

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