I run Joyful Ventures, a $23 million early-stage VC. I’m one of less than 5% of women that run a VC fund. Early in my tech career, I used to think companies that didn’t receive funding were less likely to succeed. Sure, some founders give up when they don’t raise money and become lost to history, but sometimes a lack of funding isn’t the end of the story.

Very few female-only founding teams receive venture capital. There’s a lot to be said about why this is a problem, but today I want to share a take that’s counterintuitive, and perhaps a bit controversial.

If these women have the grit and determination to persevere, building their businesses without venture funding might actually be a good thing.

Stick with me here. I promise this is going to make sense.

The funding numbers barely moved.

Female-only founding teams received 1% of total US venture capital in 2024, according to PitchBook. Down from 2% in 2023. At the current rate of improvement, 0.2 percentage points per year, gender parity in VC allocation arrives in 2065. I'll be well into my 70’s.

Ninety-two percent of partners at major US VC firms are men. Nearly three-quarters of all US VC firms have zero female partners. The explanations are familiar: pattern-matching bias, networks that self-select, pitch styles that don't map onto whatever the industry has decided a fundable founder looks like. None of this is new. The number has barely moved in a decade.But here's what I've stopped leaving out when I talk about this.

The performance data is extraordinary.

BCG research found that women-founded companies generate 78 cents of revenue per dollar invested. Male-founded companies generate 31 cents on the same dollar.

Female founders deliver 2.5 times better returns than their male counterparts, according to PitchBook's analysis. They exit 6 months faster than the market average. They burn 15% less capital on the way there. And despite capturing just 1% of VC funding in 2024, female-founded companies accounted for 24.3% of total US VC exits that year.

They put in pennies and generated dollars.

BCG first documented the revenue-per-dollar gap in 2018. Seven years later it holds. The Theanna State of Female Founders report confirmed it again this year. The performance case for funding women has been sitting in the data for nearly a decade. The allocation number has gone down anyway.

Why the constraint might be the thing.

I'm not arguing that discrimination is a feature. The funding gap is a failure of this industry, and I'm going to keep saying that.

But I have one theory about why the performance differential exists.

A founder who can't raise has one option: sell something. She has to find a customer before she can afford to iterate in the dark. She can't hire ahead of revenue or run a growth playbook that burns $300K a month waiting for the model to work. She has to understand her unit economics because her survival depends on them.

Constraint builds creativity. When capital is scarce, creativity is the only asset you can compound.

The female founders I've watched succeed on restricted capital tend to share one thing: they know exactly what their business is. Not what it could become, not the TAM slide, what it actually is today. They know their customer. They know their margins. Many of them come to a fundraising conversation later, with real traction, negotiating from a position of strength rather than desperation.

When to raise, and when to build.

I run a fund, so I have an obvious interest in making venture capital sound necessary. But I've watched too many founders raise too early, give up too much equity, and end up optimizing for their investors instead of their customers.

Here's the framework I'd actually apply:

Raise when the cost of waiting is greater than the cost of dilution. That means customers want more than you can build, you have a distribution advantage that can only be captured at speed, or you're in a market where timing is the only moat. In those cases, go get the capital.

If none of those are true, build without it. Prove the business on real revenue first. You'll be a stronger fundraiser with traction than without it, and you'll also have the leverage to walk away.

A rejection from a VC is not a verdict on your business. It's a verdict on whether your business fits the VC model, which requires a very specific outcome on a very specific timeline. Most good businesses, built by capable people, don't fit that model. Some of the best companies I've ever seen didn't need anyone.

The gender funding gap represents a $5 trillion missed economic opportunity, according to research by Angel Investors Network. That's not just what women founders are being denied. That's what investors are choosing to miss.

Hit reply and tell me: have you ever been turned down by investors? What did you build instead? I read every single response.

Jenny

P.S. If you know a female founder who recently heard no from investors, send her this. The rejection might be the most valuable thing that happened to her company.

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