Click here to choose your background settings. [ random ]
We-Fi Reports Logo Lockup_Research Partners (1)

New Toolkit Helps Investors Improve Evaluations and Unlock More Opportunities for Women-led Startups

  • In 2021, 85 percent of global VC funding went to startups with only men on the founding team. In emerging markets, research shows that only 11 percent of seed funding goes to companies with a woman in their founding team.
  • This gender financing gap negatively impacts the entire VC ecosystem, from women-led startups, which lack capital to scale, to investors, who leave significant opportunities for returns on the table.
  • The data suggest that adding three steps into evaluation frameworks can help investors and accelerators conduct more consistent, comprehensive, and data-driven evaluations across all startups, unlocking more opportunities for women-led companies.

Washington D.C., February 28, 2023 - Village Capital, in partnership with the International Finance Corporation (IFC) and the Women Entrepreneurs Finance Initiative (We-Fi), launched a new toolkit designed to help investors and accelerators adapt their due diligence process to evaluate startups more accurately and equitably.

“We’re excited to introduce a new toolkit for investors and accelerator leaders that will facilitate more consistent and data-driven evaluations,” said Allie Burns, CEO of Village Capital. “Based on our research and a controlled experiment conducted in Village Capital accelerator programs, we found that introducing three new steps into the evaluation framework can facilitate more consistent and equitable evaluations. Women-led startups’ scores in particular saw a statistically significant improvement, increasing 5x more than in the control group."

Research has found that there are inconsistencies and discrepancies in how investors evaluate men-led and women-led startups, in some cases, possibly driven by unconscious attitudes towards a gender. These discrepancies stem in part from evaluation processes that lack a consistent structure. For instance, research shows that women-led startups tend to be asked more about risks in their discussions with investors, as opposed to men-led startups which receive more questions related to their growth potential. This ultimately decreases the accuracy of evaluations as investors may focus too much, or too little, on one of the two criteria and overlook key risks or growth opportunities that could impact their assessments.

The research conducted by Village Capital and academic research partners Amisha Miller and Saurabh Lall shows that adding three steps to the evaluation process can help investors prevent and reduce inconsistencies and discrepancies in how startups are evaluated:

  1. Determine their investment priorities up-front by predefining what criteria will most heavily determine the assessment of a company;
  2. Add more structure to their assessment of the startup by incorporating a tool to better consider and evaluate risks and growth opportunities;
  3. Use more data in their assessment of the startup’s team by assessing the founding team’s potential based on their past performance.

These steps were tested in a controlled experiment conducted in Village Capital accelerator programs where 69 startups – or trainee/proxy investors – scored each other throughout the program to decide who would get an investment. Previous research has found that investments made through this peer-selection model accurately reflect the future ability of ventures to raise capital. 

The change in investors’ scores overtime suggests that investors, on average, tend to undervalue women-led startups and overvalue men-led startups. Introducing these three new steps into the evaluation framework reduced this overvaluation and undervaluation. Women-led startups’ scores, in particular, saw a statistically significant improvement, increasing 5x more than in the control group, where investors only used a standard evaluation framework.

The study also showed how more structured evaluations directly impact how women engage in the startup ecosystem. Once women co-founders experienced more equitable evaluations (which resulted from the three steps incorporated into the evaluation process), the number of times they presented their startups in front of investors (instead of being replaced by a man co-founder) saw a statistically significant increase.

This toolkit was developed to help address the financing gender gap, which still hinders the growth of women-led startups globally. Research shows that startups that can access external financing are able to grow up to 30 percent faster than those that do not. However, accessing capital remains a challenge, particularly for women entrepreneurs. According to PitchBook Data Inc, in 2021, 85.4 percent of global VC funding went to startups with only men on the founding team. In emerging markets, research shows that only 11 percent of seed funding goes to companies with a woman in their founding team, and the figures are even lower for later stage funding. Furthermore, a recent Village Capital and IFC study found that male-led startups, on average, increase the amount of equity they raise post-acceleration by 2.6 times more than female-led startups.

"The gender financing gap is a key problem to address in order to close gender inequality across the VC ecosystem,” said William Sonneborn, Global Director for Disruptive Technologies and Funds at the International Finance Corporation (IFC). “When promising women-led startups are undervalued, everyone loses - investors miss out on opportunities, innovative entrepreneurs don’t get the capital they need to scale, while society at large misses out on the impact of their innovations. This research and toolkit will help investors and accelerators make more consistent and impactful decisions.”

“In a time when women entrepreneurs are facing overlapping crises – from conflict to climate shocks, the role of early-stage investors and accelerators in bridging finance gaps becomes more important than ever,” said Wendy Teleki, Head of the We-Fi Secretariat. “We-Fi is pleased to support this toolkit to help investors address discrepancies in how they assess startups, including by proactively reducing any possible influence of unconscious attitudes towards gender.”

“Given the importance that early-stage investors place on founding teams and their perceived ability to succeed, it is critical that we recognize where and how unconscious attitudes towards a gender can possibly influence funding decisions. Small and unintentional differences in process such as whether one asks a certain question, how she/he frames that question, and how one builds a first impression can be critical in determining whether a founder receives enough funding to survive. Tools like Village Capital’s Investor Implementation Guide are integral to streamlining the process and criteria across all cases, ensuring that investors can make accurate and equitable decisions.” - Caitlin Herling, Early-Stage Investor at The Venture Collective 

Village Capital developed this toolkit in partnership with IFC and We-Fi. It was also supported by Visa Foundation, Moody’s Corporation, ANDE Advancing Women’s Empowerment Fund, Sasakawa Peace Foundation, and ANDE SGB Evidence Fund.

For more information on the toolkit, contact Heather Matranga at Village Capital.

For questions related to the research design, methodology, and analysis, please contact Amisha Miller ( or Saurabh Lall (

About Village Capital 

Village Capital is reinventing the system to back the entrepreneurs of the future. Known for its groundbreaking approaches to supporting founders who are building solutions to emergent social, economic, and environmental challenges, VilCap unlocks critical social and financial capital for early-stage companies to maximize business and impact growth. 

Since 2009, Village Capital has supported over 1,400 startups that have raised over $5 billion in investment capital. It has made more than 150 investments through its various affiliated funds, including Vilcap Investments, which has invested in 110 peer-selected companies. Over 20,000 entrepreneurs have improved their investment readiness through its network of entrepreneur support organizations and its platform, Abaca. Learn more at and follow @villagecapital.

About IFC

IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2022, IFC committed a record $32.8 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit

About We-Fi

The Women Entrepreneurs Finance Initiative (We-Fi) is a collaborative partnership among the 14 governments that have made financial contributions, six multilateral development banks that serve as implementing partners, and other public and private stakeholders. We-Fi was formally established in October 2017 as a Financial Intermediary Fund hosted by the World Bank. We-Fi invests in programs and projects that help unlock billions of dollars in financing to address the full range of barriers facing women entrepreneurs—increasing access to finance, markets, technology, and mentoring, while strengthening policy, legal and regulatory frameworks. As one of the We-Fi Implementing Partners, IFC supports private sector clients with investment and advisory services to expand financial services and market access for women-owned/led firms, as well as increasing the capacity of women entrepreneurs to run high-growth businesses. For more information, visit

Media Contact

Heather Matranga, Village Capital: