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Key Takeaways
- A 2025 NBER study finds that female entrepreneurs who launched a startup after a previous failure raised 53.3% less capital than men who were involved in the same failed companies.
- This funding gap directly contributes to fewer women becoming serial entrepreneurs—women represent only 4% of founders who start three or more companies, compared with 16% of first-time founders.
When a startup fails, male founders have a much easier time getting money for their next business idea than women do—even when they worked together on the same failed company.
A 2025 National Bureau of Economic Research (NBER) study examined male and female cofounders who built the same startups together, with identical business ideas, track records, and experience. The results depict an industry still in the grips of age-old gender stereotypes: after a failure, women were 30% less likely to get funding for their next venture. And when they did get funding, they raised 53% less money than their male cofounders.
“By contrast, men are rewarded for their prior experiences as founders, regardless of whether their startups were failures or successes,” the study’s authors, Camille Hebert, Emmanuel Yimfor, and Heather Tookes, wrote.
Double Standards
Reviewing the record of entrepreneurs, Paul A. Gompers, a Harvard business professor, wrote a few years ago that “the market values the experience they have and rewards them in terms of high seniority, high prestige positions, even though they failed.” The theory goes that serial entrepreneurs, including the world’s richest person, Elon Musk, often need at least one go to get things right. Setbacks strengthen character and teach important lessons.
As the NBER study shows, not everyone is blessed with this favorable interpretation. Previous research on gender bias in startup funding might be dismissed with excuses: maybe women choose different industries, maybe they have less experience, or maybe their business ideas simply aren’t as good. This research eliminated all those variables by comparing men and women who built the same companies together.
The results showed that gender discrimination is evident at every stage. Women who launch another startup after a previous failure were 22% less likely to raise venture capital compared with their male cofounders who were involved in the same failure. Access to less capital, irrespective of performance, generally means that women entrepreneurs have less chance at succeeding and, as the research shows, are less likely to launch another startup in the future.
The researchers found that, among those who do secure funding, women raise an average of $31 million less over five years than their male counterparts from the same failed startup. Even success didn’t level the playing field. After a thriving exit, women were 27% less likely to secure VC funding for their next venture and raised $28 million less on average than their male cofounders who shared the same success.
Important
The researchers found that despite raising less money, female founders had better success rates with their subsequent startups, suggesting investors are systematically undervaluing talented entrepreneurs just because they’re women. Meanwhile, the study found that male entrepreneurs actually benefit from failing—their deal sizes were 5% larger following unsuccessful exits.
Why the Different Treatment?
The researchers dug deeper into the data to see if their findings could be justified by nondiscriminatory factors, such as the male entrepreneurs having more experience or better track records with startups. In the end, they found no evidence of this, leading them to conclude that the differences come down to gender bias and stereotypes.
“Investors’ responses to women founders’ performance cannot be explained by simple statistical updating about founder quality,” they wrote. “Instead, the evidence points to bias in how investors interpret and apply their experiences with women founders. These negative spillovers affect first-time women founders and serial founders alike.”
Tip
Perhaps most troubling is the study’s finding about spillover effects. The researchers found that “when an investor experiences a recent failure by a woman-founded startup, the investor’s deals for subsequent women founders are between 6.7 and 7.5 percentage points smaller over the next five years”—they don’t just penalize the women involved but all female entrepreneurs.
The Bottom Line
This isn’t the first study to provide evidence that women entrepreneurs have fewer opportunities to succeed than men. However, because this study covers recent periods and compares men and women who worked on identical startup ventures, its findings are much harder to dismiss. The research reveals that many venture capitalists still hold onto outdated stereotypes—believing men are more bold, visionary, decisive, and willing to take risks than women, even when the evidence shows otherwise.
This creates problems not just for the VC industry but for a broader economy that’s missing out on high-quality founders and the new products and services they could bring to the market, merely because of worn-out stereotypes about gender.
