The funding process in female-led capital-intensive start-ups

Abstract: The purpose of this study is to present how female entrepreneurs in Sweden raise capital for their start-ups and if there are common key factors presented among those who succeed. The entrepreneurs interviewed have all successfully raised capital. The research shows that female founders only have access to 1% or less of the capital in Sweden. We interview investors to acquire their perception of gender bias in fundraising and the key factors they look for during their due diligence process. The study shows that female entrepreneurs prefer bootstrapping and soft fundings before approaching investors. The majority of the female entrepreneurs were unsecure or did not know if they have been exposed to gender bias from investors during their fundraising process because they succeeded raising capital. They were at the same time aware of the existing gender bias. The majority of the investors expressed that they preferred to invest in female or mixed funded companies because their experience shows that those tend to perform better. The study also shows that key factors during the fundraising process are diversity of the team, resilience, networking, building good relations and that the entrepreneurs appears to be coachable from the investors point of view.