Women Are Closing the Startup Gap While Capital Still Flows to Men

Women are starting nearly as many businesses as men worldwide, and increasingly better ones, according to the Global Entrepreneurship Monitor’s newest women’s entrepreneurship report, covering 48 economies and roughly 150,000 adults, as reported by Forbes.

Twelve percent of women globally run a new business, compared with 14% of men, and women now lead about 40% of businesses the report classifies as high-potential, outpacing men on that measure in Chile, El Salvador, India, Israel, and Oman.

The gap shows up further along. Among established businesses, the report found a woman-to-man ownership ratio of just 0.69 in 2025, meaning women-led startups are closing the gap at formation but falling behind men’s at the point where businesses mature and scale. Lead author Amanda Elam ties that to where women’s businesses tend to cluster: social and government services and retail, sectors that attract little investor interest. “Investors don’t play there, because the ROI is not very high,” she told Forbes. Globally, 70% of informal investment, the money that typically funds a business before it can attract formal venture capital, went to male entrepreneurs.

The report complicates the idea that women are falling behind on technology. Forty-four percent of women entrepreneurs use digital tools in their businesses, 43% use AI in product or service development, and 42% report introducing a new product or process, rates that put them on par with or ahead of male founders on innovation measures.

What is holding women back, according to the report’s authors and the founders Forbes interviewed, is the combination of thin access to capital and the unpaid work of caregiving. Women’s exit-to-entry ratio, the rate at which they leave businesses relative to starting them, runs 7.6% higher than men’s, and women are 55% more likely to cite family or personal circumstances as their reason for shutting down. Susan Namirimu, who runs a tailoring and workplace-skills program for women in northern Uganda, says founders need more caregiving support alongside better loan terms. Cristina Campero Peredo, whose Mexico City-based company PROSPERiA uses AI to detect eye disease, argues that founders in long-development-timeline sectors like hers need more patient, risk-tolerant capital rather than simply more of it.

The report lands at a moment when AI tools are lowering the cost of building a product, which may help explain why women founders are posting strong innovation numbers without a matching increase in investment behind them. Whether that translates into more women-led businesses surviving to scale will depend on whether investors start underwriting the sectors, and the life stages, where women are actually building.