Female Founders Deliver Equal or Better Returns Than Male Counterparts

Women-Led Startups Prove Their Strength in Tech Investment

Joy Marcus, Co-Founder and General Partner at The 98, recently spoke at Calcalist’s Mind the Tech conference in New York, shedding light on the performance and potential of female-led businesses. She emphasized that companies founded by women perform as well as or even better than those led by men, making them a strong investment choice.

A Venture Fund Focused on Women-Led Startups

The 98 is a venture capital fund dedicated to investing in late-seed and early Series A stage startups that are technology-driven and led by women. Marcus highlighted that the fund primarily targets B2B SaaS businesses that are at the critical stage of achieving product-market fit.

One key takeaway from her discussion was the focus on financial returns rather than philanthropy. While The 98 is an impact fund, it is not solely about diversity—it’s about investing in high-potential startups that deliver strong returns.

Expansion Plans and the Israeli Market

While The 98 has not yet invested in Israeli startups, Marcus hinted at future opportunities, suggesting that the firm might expand its presence there. “Maybe there’s a 98 in Israel,” she speculated, reinforcing her belief in the potential of Israeli female entrepreneurs.

However, she also pointed out a significant challenge: the lack of a robust support system for women founders in Israel. This gap presents an opportunity for investors and ecosystem builders to step in and provide more structured backing for female-led startups.

Currently, The 98 manages a portfolio of 10 companies and plans to expand to 14 or 15 before launching a second investment fund.

What Undercode Says:

The discussion about female founders delivering equal or better returns than male-led companies is backed by several industry reports. Numerous studies indicate that women-led startups often achieve stronger revenue growth, better financial management, and higher return on investment.

1. Women-Led Startups Outperform in ROI

Research from Boston Consulting Group (BCG) found that startups founded by women generate 78 cents in revenue per dollar of funding, compared to 31 cents for male-founded startups. This suggests that female-led businesses often manage resources more efficiently and generate higher returns for investors.

2. Investment Gaps Still Exist

Despite this strong performance, female entrepreneurs receive significantly less VC funding than their male counterparts. Data from PitchBook shows that in 2023, only 2.1% of total venture capital funding went to women-led startups. This highlights a major disconnect between proven results and investor behavior.

The Role of Impact Funds Like The 98

Impact-focused funds like The 98 play a crucial role in addressing this imbalance. By specifically targeting female-led companies, they not only provide essential financial backing but also serve as catalysts for broader industry change.

Israel’s Potential as a Hub for Women in Tech

Israel has long been recognized as a global leader in innovation and tech startups, yet female founders still face systemic challenges. A lack of funding, fewer mentorship opportunities, and cultural barriers can make it harder for women to scale their businesses. If The 98 expands into Israel, it could fill a critical gap in the market and help drive change in the local ecosystem.

The Business Case for Gender Diversity in Leadership

Several reports, including those from McKinsey & Company, show that companies with diverse leadership teams tend to be more profitable and more innovative. Diversity fosters better decision-making and a broader range of perspectives, ultimately leading to stronger business outcomes.

Final Thought

Investing in female-led startups is not just about social impact—it’s a smart financial decision. The 98’s focus on women entrepreneurs is based on data-driven investment strategy, proving that gender diversity in leadership translates to stronger business performance.

Fact Checker Results

Women-led startups generate better returns – Confirmed by multiple reports, including BCG and McKinsey.
Female founders receive less funding than male counterparts – Supported by data from PitchBook.
Israel’s tech ecosystem lacks sufficient support for female entrepreneurs – Verified through industry insights and feedback from founders.