Abstract
This study examines how female representation within founding teams and the presence of a female CEO shape early-stage fundraising outcomes. Using a large sample of European seed and Series A startups, we find that mixed-gender teams raise more funding than all-female teams, but not more than all-male teams. Consistent with this asymmetric pattern, the relationship between female representation and funding amount is inverted U-shaped, with funding peaking at low levels of female representation. Having a female CEO is associated with a lower funding amount, both directly and by weakening the fundraising advantage associated with mixed-gender teams. These disparities persist even when the investor pool includes female investors. Overall, our findings suggest that investors reward gender diversity only within narrow bounds: once female representation exceeds a relatively low threshold, or extends to the venture's most prominent leadership role, it becomes a liability rather than an asset.