Accelerating Equity: Overcoming the Gender Gap in VC Funding

TL;DR

This paper investigates the gender gap in U.S. venture capital funding within accelerator programs, highlighting how family obligations and accelerator quality influence funding disparities and proposing solutions to mitigate these issues.

Contribution

It introduces a novel dataset and a two-stage matching and analysis methodology to quantify and understand the gender gap in startup funding.

Findings

Female startups face significant funding disadvantages due to relocation challenges.

Larger cohorts and higher-quality accelerators help reduce the gender funding gap.

Better networking and mentorship opportunities are linked to improved outcomes for female founders.

Abstract

We examine the growing gender gap in venture capital funding, focusing on accelerator programs in the U.S. We collect a unique dataset with detailed information on accelerators and startups. Using a two-stage methodology, we first estimate a matching model between startups and accelerators, and then use its output to analyze the gender gap in post-graduation outcomes through a control function approach. Our results suggest that female-founded startups face a significant funding disadvantage due to relocation challenges tied to family obligations. However, larger cohorts and higher-quality accelerators help reduce this gap by potentially offering female founders better networking opportunities and mentorship.