Globally, one in six women desire to start a business. In Africa, that number is one in three women.
“58% of Africa’s self-employed are women and contribute between $250-300 billion to African GDP”.
AllAfrica.com
Despite Africa’s high female entrepreneurship rates, a stark gender funding gap persists as women struggle to get funding for their businesses. Between 2013 and 2021, only 3% of total funding for African tech startups was allocated to all-female founding teams, while all-male teams secured a staggering 76%.
International Women’s Day is a global platform for recognising women’s achievements and advocating for gender equality. The 2025 United Nations theme “For ALL Women and Girls: Rights. Equality. Empowerment”, and the IWD organization’s theme to #AccelerateAction emphasises the urgency of addressing these disparities.
Understanding the Gender Funding Inequality in African Entrepreneurship
Understanding the dynamics of the gender funding gap ensures we can all work towards levelling the playing field and providing equitable opportunities for all entrepreneurs.
Some people see the term “gender funding gap/inequality” as a buzzword, but the numbers are clear. In 2022, only 4% of total investment in African startups went to businesses with a female founder, amounting to $188 million out of $5.2 billion in funding.
This didn’t improve in 2024; instead, it got worse. Less than 5% of funding went to startups led by a female CEO, continuing a downward trajectory from previous years. This is no different for all-female founding teams, which received just 1% of funding in 2024, down from 2.1% in previous years.
What’s Causing the Gender Funding Inequality Gap?
There are several reasons why the gender funding gap seems to be getting wider each passing year. Below are some of them.
- Unconscious Bias: Investors naturally gravitate toward founders they relate to, often meaning that male investors favour male-led startups.
- Lack of Diversity in VC Firms: Only 12% of decision-makers in African venture capital firms are women. This means that female founders’ unique needs and business models are often underrepresented or misunderstood.
- Sector Bias: Because women entrepreneurs are more concentrated in industries that receive less VC funding, such as EdTech and HealthTech, their businesses inherently face a tougher funding landscape.
- Cultural Barriers: In some African cultures, gender norms still dictate who controls financial resources. Women often face additional hurdles in accessing finance, securing leadership positions, and building strong investor networks.
What are the Economic and Social Implications of the Gender Funding Inequality Gap?
We mentioned earlier that in Africa, one in every three women you meet wants to start a business. Also, women make up 58% of the self-employed population, contributing between $250-300 Billion to Africa’s GDP.
If women-led businesses continue to get less funding and the gender inequality gap continues to widen, there will be slower economic growth and fewer opportunities for job creation and wealth generation.
Also, resource allocation is bound to be inefficient because investors who overlook the innovative potential of female-led businesses miss opportunities for economic diversification and industry disruption.
Negotiation Challenges for Female Entrepreneurs
Confidently advocating for better deals, higher valuations, and fairer terms can help close the funding gap for female entrepreneurs over time. However, women face unique challenges in negotiations.
From societal expectations to self-doubt and limited access to support networks, understanding these barriers is the first step towards overcoming them and securing better opportunities in business.
Cultural and Societal Barriers
In many African societies, traditional gender roles still shape business interactions. Society expects women to be more accommodating and less assertive, which naturally makes women appear weak in negotiations.
Tied to this is limited mobility and time due to family responsibilities. This further restricts women’s ability to engage in high-stakes business discussions. Additionally, cultural biases may cause investors to undervalue women-led businesses, leading to tougher negotiations and less favourable deals.
Internal Conflicts: Self-doubt and Imposter Syndrome
Beyond external factors, many women struggle with self-doubt and imposter syndrome, another reason that can make them less confident during negotiations. Research shows that women are less likely to negotiate their salaries or business terms compared to men, fearing they might come across as too aggressive.
This hesitation often results in missed opportunities and weaker deal terms that do not favour the women.
Investor Bias
Biases from investors and business partners further complicate negotiations for female entrepreneurs. With only 12% of decision-makers in African VC firms being women, female-led businesses may face scepticism about their ability to scale or generate high returns.
Investors may also offer lower valuations or more stringent terms, assuming women-led startups are riskier ventures.
Limited Access to Support Networks and Communities
Strong networks are key to successful negotiations, yet many female entrepreneurs have smaller, less diverse business networks. Without access to influential investors, mentors, and advisors, they often lack critical insights and opportunities that could strengthen their negotiating position.
A lack of support network and community is one problem we are trying to solve for women entrepreneurs with our Business Referral Network (BRN) at P23 Africa. It is an exclusive community for CEOs to network with high-profile decision-makers and build valuable relationships.
Limited Access to Funding
When entrepreneurs have fewer financial resources, they may have to accept unfavourable terms to secure capital. Additionally, women who lack negotiation experience may struggle to recognise unethical business practices or navigate complex deals effectively. Without mentorship and practice, they risk making costly mistakes.
How can women build their confidence and improve their negotiation skills? Find out in the next section.
Bridging the Gender Funding Inequality Gap: Strategies for Effective Negotiation
Here’s how female entrepreneurs can improve their negotiation skills to drive better outcomes and begin to close the gender funding inequality gap.
Preparation and Research
Success in negotiation starts with thorough preparation. As female entrepreneurs, we should get familiar with market trends, competition, and the value our businesses provide to our target audience and community.
A well-researched pitch backed by data strengthens your credibility and reduces the likelihood of being undervalued. It’s also crucial to study potential investors or partners, what they prioritise, their past deals, and their negotiation patterns. Armed with this information, you can anticipate the approach of the investors you are meeting and develop stronger counteroffers.
Confidence Building
Confidence is important if you want to command respect in negotiations. You have to believe in your value, business, and vision. Do not just believe; let that belief be evident in your brand pitch.
When you exude confidence, you significantly influence how others perceive and respond to you. You can also build self-assurance through mentorship programs, negotiation workshops, and role-playing exercises to sharpen your negotiation skills. The more you practice, the easier it becomes to advocate for yourself with conviction.
Effective Communication
Assertive communication ensures that an entrepreneur’s message is not just heard but respected. Direct, clear, structured responses while maintaining a firm yet approachable tone create a strong presence. Crafting a compelling narrative that highlights the problem your business solves and why it stands out can also make your negotiations more persuasive.
Support Networks
A strong network can open doors to funding, partnerships, and strategic insights. You should actively seek professional communities, accelerators, and mentorship circles to gain access to a support community and valuable business insights that will make you a better negotiator.
Tapping into these networks, like P23 Africa’s BRN, provides guidance and increases your visibility among key decision-makers.
Leveraging Cultural Nuances
In many African markets, people build business relationships on trust and long-term engagement/relationships. As a female entrepreneur, you should leverage your relationship-building skills to strike a chord with potential investors and drive better outcomes.
Whilst these challenges exist, building our negotiation skills as female entrepreneurs can reduce the inequality gap over time. We can improve this by preparing extensively, exuding confidence, strategic networking, and effective communication. With these skills, we can position ourselves for better funding opportunities and business success.
To connect with high-value decision-makers and gain exclusive access to resources that elevate your business, join the Business Referral Network (BRN), a community designed to support and empower African entrepreneurs. Let’s bridge the funding gap, one negotiation at a time.
