Venture capital is not the answer for women founders – they need funding that fits

For too long venture capital has dominated the conversation around women and funding.

Every headline, every pitch competition, every “success story” seems to point to VC as the only path to scale. And yet, VC is not only a poor fit for most women-owned businesses, it has warped the collective understanding of what finance should look like.

The VC skew

Venture capital is designed for a small sliver of the business world: high-growth, typically tech and SaaS companies chasing unicorn valuations. Less than 1% of businesses globally will ever be suited to that model. But VC has shaped the narrative so completely that women are told this is the goal. Raise a round. Give up equity. Lose control. Hope for an exit.

For women, the stakes are higher. The average cheque size is smaller, the scrutiny is sharper and the bar is set impossibly high. And here is the kicker: most consumer and creative businesses where women excel are never meant to follow the VC trajectory. They are built for resilience, sustainability and cultural relevance. VC has glamorised growth-at-all-costs and in doing so erased the nuance of financial choice. The VC skew has blinded us to more appropriate, founder-friendly tools.

The misunderstood toolbox

Finance is not one-size-fits-all. Just as you wouldn’t use a hammer to fix every problem, founders shouldn’t be handed VC as the default solution. There are multiple financial instruments available but few founders are taught how or when to use them.

• Equity: Best for capital-intensive ventures with long runways. Rarely the right fit for revenue-generating consumer brands where giving up equity and control often adds unnecessary pressure.
• Traditional Debt: Can be valuable, but traditional debt is rigid and backward looking. It judges founders on collateral and trading history they often don’t have, especially women and first-time entrepreneurs.
• Revenue-based finance: A modern alternative that aligns repayments with actual business performance. Scalable, flexible, sustainable and far better suited to consumer and creative businesses where growth is linked to demand and community, not fixed assets.
• Grants & blended capital: Critical in the earliest stages when experimentation is high, risk is real and cash flow is fragile. When used well, they provide the breathing room to build without compromising long-term potential.

​​The real gap? Financial literacy on instruments. Too many founders are told to chase VC or debt without ever learning that there is a toolbox of options each fit for different stages of the journey.

Until founders are equipped to choose the right tool at the right time, the cycle of misaligned finance will continue to choke the very businesses with the greatest potential to grow, innovate, and transform our economy.

A broken, uninnovative financial sector

The problem runs deeper than just venture capital. Australia’s financial system has grown stale anchored in collateral-heavy, asset-based lending, a model built for factories and real estate, not the modern economy of consumer and creative brands.

Our property obsession drives the narrative. Mortgage brokers and buyers’ advocates dominate, funneling capital into homes instead of growth. Housing finance has stayed consistently high, new mortgage lending rose 2% in value in Q2 2025 even with elevated interest rates. This obsession is stagnating our business sector, as debt meant for business innovation gets redirected into real estate leaving entrepreneurs starved of timely growth capital.

Worse, the credit models themselves are broken. Banks and alt-lenders still assess risk through backward-looking metrics: collateral, historical cash flows, and asset holdings. These models are fundamentally misaligned with the reality of modern consumer brands, which scale on cultural relevance, digital traction, and community engagement. As a result, they cannot recognise strong businesses hiding in plain sight, brands with real customers, real growth, and real potential.

Despite advances, mainstream finance still fails to serve women business owners. Globally, there is a staggering $1.7 trillion financing gap in access to capital for women-owned micro, small, and medium enterprises. Yet banks and alternative lenders continue to rely on outdated definitions of “creditworthiness,” tied to collateral that many consumer and creative founders simply don’t hold.

Even though sectors such as retail, wellness, and digital brands, where women excel have robust revenues and loyal customers, they remain overlooked because they are deemed “high risk”. This isn’t just bias; it’s structural inertia. As long as our financial system remains placidly conservative, over-indexed on property and under-equipped to assess modern business risk. Australia’s entrepreneurial engine will continue to stall, especially for equity-rich but asset-light women business owners.

Why it’s not VC – and not giving up equity

The vast majority of women-owned businesses don’t need VC. They need capital that flows with their growth, not against them. They need funding that doesn’t strip ownership, erode control, or lock them into someone else’s definition of success.

VC has glamorised the idea that “real success” is raising a round. But success for women entrepreneurs is keeping equity in their hands, building strong brands and scaling sustainably on their terms. It’s using the right financial instrument at the right time not defaulting to the one that grabs headlines.

The desperate need for innovation

Australia is stuck in a financial rut. We remain a nation obsessed with property and outdated debt models, while the funding ecosystem for entrepreneurs has barely evolved in decades. Our financial products are still built for factories and collateral, not for the consumer and creative businesses where women thrive.

This lack of innovation is choking growth with a system that continues to hand business owners blunt tools that don’t fit the businesses they are building. If we don’t innovate, Australia risks falling behind globally watching our most promising entrepreneurs sidelined because the capital system never evolved to meet them where they are.

The path forward

To shift the system, we need two things:

1. Education: Business Owners must be equipped to understand the full financial toolkit, when to take debt, when to leverage revenue-share, and when (if ever) equity makes sense.

2. Innovation: We need new products designed for women-owned businesses. Tools that are flexible, forward-looking, and aligned with today’s realities of cultural traction, digital communities and consumer first brands.

Building the future of finance

At F5, we believe finance should be a growth engine, not a power grab. That is why we have built a system where capital is flexible, recyclable, and responsive designed to celebrate community, reward resilience, and power women into the future.

Because when women have the right tools at the right time, they don’t just build businesses. They build movements, they build industries, they build empires.

And F5 is here to make sure Australia leads the world in funding innovation for women.

• Tracey Warren is CEO & Bree Kirkham, COO, of venture capital firm F5 Collective.