Why backing female founders is more than just a numbers game

In the world of venture capital, numbers tell a story, but rarely the full story.

When I recently shared thoughts on LinkedIn about gender equity in Australian VC, the flood of DMs revealed a stark truth: we’re grappling with a more complex issue than simple statistics can convey.

It’s time to look beyond the numbers and confront the nuanced realities of gender imbalance in our industry.

At first glance, the statistics are disheartening.

Research from Chief Executive Women shows that nearly half of ASX300 companies have no women in “CEO-track” roles.

In venture capital, the outlook is similarly bleak; about 85 cents in the dollar are deployed behind all male teams. But it’s not just about who gets funded—it’s about how much.

In Australia, recent data reveals a stark disparity in first check sizes for VC-backed companies based on team composition: all-female teams receive an average of $700,000, mixed-gender teams $1.5 million, and all-male teams a staggering $3 million.

This gap isn’t just inequitable—it sets female founders up for a steeper climb from day one. We’re basically telling them: get to the same milestone, in the same time frame, but with 25% of the fuel we give to your male counterparts.

At Flying Fox Ventures, we’re experimenting with ways to address this imbalance.

One initiative we are introducing is a female founder sidecar – a top up vehicle, where a startup with a female founder that meets our usual, rigorous selection criteria, will automatically receive a bigger cheque.

This isn’t a silver bullet, but it’s one of many needed experiments.

Our goal is simple:  ensure exceptional female founders have the resources to achieve milestones on par with their male counterparts.

But money alone won’t solve the problem. We need to address the entire ecosystem, from how pitches are received to how decisions are made.

Paula Burton, founder of Mass Dynamics, recently highlighted an unintended consequence of well-meaning diversity efforts during an Innovation Bay panel.

In many cases, female founders were being matched with junior women investors in the firm—an effort to increase representation.

However, as Paula pointed out, without senior women on the team, this often relegated women founders to meetings with junior investors who, while talented, lacked the influence to fully advocate for their picks.

So, what can we do? One simple experiment: ensure a senior investor—regardless of gender—is present in meetings with female founders.

Yes, we need more women in senior roles, but until then, having senior decision-makers in these rooms could help level the playing field.

It’s also important to recognise the ongoing efforts to gather comprehensive data on startup funding for women and minorities. Initiatives like Equity Clear are doing vital work in helping us understand the broader landscape.

However, this kind of reporting can place a heavy burden on small investment teams. While data is essential for systemic change, we shouldn’t wait for perfect information before taking meaningful action.

That’s where small, actionable experiments come in. 

At Flying Fox, our about-to-launch female founder sidecar is one such experiment.

We’re not claiming it’s the only solution, but we’re hoping it’s a step in the right direction. By increasing cheque sizes for female-led startups, we aim to give these founders the same runway as their male counterparts. This isn’t about lowering the bar—it’s about giving everyone an equal shot at clearing it.

As we move forward, we want to commit to both the big picture and the small, actionable steps along the way. We need the data and systemic analysis, but we also need to be willing to experiment and evolve our approaches to diversity and inclusion.

At the end of the day, progress is a team sport.

If we want more innovation, we need all players in the game. By backing female founders equally, we’re giving everyone a shot on goal—and that’s where the magic happens.

* Kylie Frazer is the cofounder of Flying Fox Ventures, an early-stage venture capital firm with 62 companies in its portfolio.