Less than 2% of global venture capital funding goes to female founders. In Africa, the gap is even wider, with less than 1% of total funding raised in 2025 going to female founders.
The broader funding environment has also changed significantly. Venture capital investors have become more selective and demanding, forcing founders to rethink how they approach fundraising and what they need to demonstrate to secure capital.
Speaking at the Insider Series hosted by Hub One and Heave Ventures on August 28, 2026, Omolara Sanni, co-founder of Midddleman, shared practical advice on how female founders can approach two key sources of startup capital: grants and equity.
Grants offer capital without dilution
Sanni noted that women are three times more likely than men to raise grants, making them an important funding option for startups still trying to get off the ground.
Unlike equity financing, grants allow founders to access capital without giving up ownership of their businesses. That can become particularly valuable later if a company decides to raise equity, as founders retain more of their ownership.
Grants also do not need to be repaid. However, they come with trade-offs. Applications can be time-consuming, and many grant programmes operate within specific application windows, making them less predictable than other forms of financing.
The benefits can extend beyond the money. Sanni highlighted visibility, credibility and mentorship as additional advantages of winning a grant.
Grant programmes often invest heavily in publicity around their recipients, giving startups exposure they may otherwise struggle to afford. Many programmes also assemble faculty and mentors from across the industry, giving founders access to expertise and networks that may otherwise be difficult to reach.
What makes a winning grant application?
According to Sanni, understanding what grant providers are looking for is critical. First, founders must answer the exact question being asked.
Grant providers often review hundreds of applications, meaning applicants who fail to meet specific requirements can be eliminated quickly.
Second, founders need to demonstrate what they have already achieved.
“Ambition is good, but what have you done?”
Proof of traction could include paying customers, letters of intent, partnerships with reputable brands or, depending on the business, a strong waitlist. The appropriate evidence will vary based on the company’s stage and business model, but demonstrating progress strengthens an application.
Founders must also be specific about how they intend to use the funds. Rather than simply stating that money will go towards “operations” or “growth”, applicants should explain exactly what the funding will enable. If the plan is to hire technical staff, for example, that should be clearly stated.
Finally, founders need to follow the application instructions. Word counts, pitch-deck limits and other requirements are not suggestions. Failing to comply can result in an otherwise strong application being disqualified.
Sanni also stressed an important distinction between grants and equity: grants are often impact-driven.
Drawing from her experience at Midddleman, she noted that strong business performance alone may not be enough. Founders also need to demonstrate the impact their businesses have on customers, the wider economy or, in some cases, the environment.
What investors want from founders
For startups pursuing equity, understanding what venture capital investors are looking for is equally important.
One of the biggest considerations is market size. VCs need outsized returns, and those returns are difficult to generate from a market that is too small or growing too slowly.
Sanni walked participants through a bottom-up approach to market sizing, noting that investors are increasingly less persuaded by generic calculations that use population figures as a proxy for market opportunity.
Instead, founders need to define their ideal customer, understand the resources available to the business, assess the competitive environment and determine how much customers are realistically willing to pay.
They must then estimate what portion of the market the company can realistically capture.
The founding team is another critical part of the equation. Investors are often betting as much on the people building the company as they are on the business itself.
Founders therefore need to demonstrate why they are uniquely positioned to solve the problem, whether through professional experience, lived experience or unique market insight.
“For us at Midddleman, we lived this problem. My co-founder and I imported from China for more than six years. We experienced all the problems that Midddleman currently solves, so we are the best people to solve this problem,” she shared.
Unit economics have also become increasingly important. Founders need to understand how much it costs to acquire customers and whether that cost is sustainable as the business grows.
Finally, founders need to demonstrate a credible path to liquidity. A strong business with no clear exit potential may struggle to attract venture capital because investors ultimately need a mechanism through which they can realise returns.
Avoiding common fundraising mistakes
Sanni identified several mistakes that founders frequently make when raising capital, including relying on generic market-sizing data, ignoring their company’s actual capacity, failing to cite accurate data sources and not revisiting the assumptions behind their projections as circumstances change.
For female founders in particular, she emphasised the importance of telling a compelling story but leading with the fundamentals of the business.
“Always lead with the solution you’re providing [and] the traction you’ve gotten.”
Ultimately, the choice between grants and equity should not be viewed as a hierarchy.
“Grants and equity are tools, not a hierarchy. None is better than the other,” she said.
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