Beyond the funding funnel: Rethinking women, VC and the data shaping debate

Over the past week, conversations about women founders and venture capital in Australia have been amplified by Blackbird’s latest portfolio data, reported by Startup Daily’s Simon Thomsen, alongside Elaine Stead’s thoughtful piece, The myth of the funnel.

Both point to something important: The numbers we track matter, but the story they tell depends on how we read them.

This transparency allows us to move from anecdote to evidence – thanks in large part to the outstanding work of  Noga Edelstein and the team at Equity Clear, who have championed openness and brought critical data into the open.

The ‘funnel is just the beginning.

We often hear that the problem is simply one of “deal flow”. That, there just aren’t enough women founders reaching the VC pipeline. On the surface, the data seems to support this. Blackbird reported that all-women founding teams make up just 2% of its investments, as covered by Startup Daily.

Given Blackbird’s overall “hit rate” of around 1–2% (companies pitched versus companies backed), that translates into an almost impossible 0.02% to 0.04% chance of an all-women team being funded.

As Simon shares, it’s roughly a one-in-2,500 to one-in-5,000 shot. It’s a striking way to illustrate how narrow the funnel is. But focusing only on these numbers risks missing the bigger story.

Blackbird’s data reflects a very specific slice of entrepreneurship: high-growth, venture-scale startups, mostly in technology, software, and frontier industries. In that ecosystem, women are indeed underrepresented.

Yet across the broader economy, the picture looks different. According to the ABS and the Small Business Ombudsman, around 34–35% of small businesses in Australia are women-owned. These are neither anomalies nor outliers. They represent hundreds of thousands of businesses that employ people, generate revenue, and contribute to GDP.

The contrast raises an important point: women are starting companies, but many are doing so outside of the narrow parameters that venture capital typically values.

Asking better questions

Instead of stopping at “what percentage of our investments went to women founders?”, I’m keen to explore and address some deeper questions:

• What structural barriers prevent women from founding venture-scale companies at the same rates as men?
• How do these barriers compound at the intersections of gender, race, culture, and class?
• Why do we accept a system that continues to direct more than 98% of venture capital dollars to men?
• Is the problem of “deal flow” another way of saying we haven’t built the networks to see women founders?
• Why do we keep framing this as a “pipeline issue” instead of an investor design flaw?
• What would happen if capital were allocated proportionally to the number of women starting companies, instead of concentrated by default in male-dominated networks?

These are necessary uncomfortable questions. Because if we don’t ask them, we risk treating inequity in venture as a matter of optics, when in reality it’s a matter of economic efficiency.

Learning from the outliers and some in the middle

The encouraging news is that some investors have already shown what’s possible when we intentionally design for inclusion:

• Giant Leap reports that 58% of its portfolio is women-led, with a target of 60% and a mandate to invest at least $3 million annually into women-led ventures.
• Airtree has shown that when its Explorer angel program cohorts are ~50% women, deal flow from female founders increases by 20–30 per cent.

By comparison, the indomitable Tracey Warren and Bree Kirkham at F5 Collective are taking a different approach by focusing on the ‘missing middle’. They back women who are building sustainable, scalable companies that may not fit the narrow mould of tech or SaaS, but which are nonetheless critical to the fabric of our society and economy. By supporting these female founders, F5 challenges the binary of “VC-scale or nothing” and creates room for the kinds of businesses most women are actually building.

These examples suggest to me that the challenge isn’t a lack of women founders, but a lack of systems built to see them, support them, and back them.

Building foundations, not just a funnel

If we want to meaningfully shift these numbers, the question isn’t just how to widen the funnel. It’s how to build the foundations that allow more women to even approach it:

• Expanding pathways to early capital, beyond traditional networks
• Strengthening financial literacy, peer support, and mentorship.
• Advocating for systemic reforms—from parental leave policies to better visibility for women in tech and health.
• Supporting funding models that cater to more than just “unicorns”—because not every business needs VC to be valuable.

The question isn’t just how we fund women founders, it’s whether the funding model works for the kind of businesses they’re building. Venture capital isn’t broken, but it is optimised for a narrow goal: rapid growth and big exits. That leaves a lot of founders, and entire sectors, out of scope. The answer isn’t to ditch VC, but to expand the capital stack to make revenue-based financing, patient equity, procurement, and hybrid models more accessible. If we want different outcomes, we need to change how we find, evaluate, and fund potential, so capital shows up when and where it matters.

Equity isn’t just about percentages in a portfolio. It’s about creating the conditions where women can choose to found, scale, and lead companies in the first place.

My call to action

The funnel is a useful metaphor, but it is not the whole story. If we want to close the gender funding gap, we must look deeper into the stories hidden between the data points. Then, the question evolves from “how many women founders are getting funded” to:

“What would our economy look like if every woman who wanted to build a company had the capital, support, and runway to do so?”

Author’s note

As someone who has lived these dynamics, being a woman working in tech and an aspiring angel investor (thanks, Airtree), I see how complex the ecosystem is.

The data matters. Yes! So do the lived experiences behind it. Our opportunity now is to build systems that recognise both.

• Sinéad Fitzgerald is a technology and partnerships leader with two decades of experience at global companies including Apple and Microsoft.