Health tech founders say the staggering gap in VC funding for women founders and women’s reproductive health research is perpetuating an ongoing problem—woman, girls and gender-diverse people simply aren’t able to access the same healthcare options as everyone else.

Convincing venture capitalists to support businesses owned by women and gender-diverse people is tough.

Persuading them to fund reproductive healthcare products for those same groups? Challenging, to say the least. Raising funds for a business that’s owned by and sells products for women or gender-diverse people? You might as well try to win the lottery.

Let’s put this in context. In 2024, 20 per cent of private sector businesses in Canada were majority-owned by women—but they only received four per cent of the country’s venture capital investments. According to a 2022 McKinsey report, only about three per cent of all digital health funding goes to FemTech companies.

All that math has a real-world impact. When the reproductive health of women and gender-diverse people is poorly funded, doctors can’t make informed healthcare recommendations. Quality of life decreases, and healthcare options become limited.

Christine Goudie, CEO and co-founder of health tech company Granville Biomedical, encountered this first-hand in 2018 while on a medical outreach trip with her future co-founder, Crystal Northcott.

“We were in Bangladesh, and we discovered a major lack of hands-on training models in women’s health there,” said Goudie, adding that they’d noticed the same issue in Canada. “Other medical disciplines had multi-million-dollar simulations and equipment. Women’s health had virtually nothing. They were using things like car-washing sponges to [practice] suturing maternal lacerations.”

“There’s a lack of accessible products,” said Goudie. “Accessible” is the key word here. In addition to lacking skin tone variety and body diversity, existing models were also cost-prohibitive. “We’re talking $1,000-2,000 and most of them are disposable, especially ones you suture. People just can’t justify that cost.”

Goudie and Northcott launched Granville Biomedical out of a concern for patient safety and began developing a range of training tools for reproductive health, from suturing rehearsal pads and pelvic exam kits to pelvic health anatomical models.

We had some very discouraging conversations and some really low-ball offers, to the point where we just felt like we were being disrespected.

—Christine Goudie, CEO and co-founder, Granville Biomedical

VC Fatigue

Unfortunately, private investors didn’t seem to feel the same sense of urgency. “We had some very discouraging conversations and some really low-ball offers, to the point where we just felt like we were being disrespected,” said Goudie.

Attempting to attract private funding was also incredibly time-consuming. After about a year, Goudie decided to take out loans. But she’s careful to say that approach isn’t for everyone. “You’ve got to be really sure that you’ve identified your market. And you have to know that you’re going to go into revenue within the next few years.”

Granville Biomedical is now reaping the rewards of all that hope and hard work. Their loans have been paid off and their products have been adopted by clinics around the world. But this is a massive issue with historic roots, and it’s going to take a while to fix it.

“[Historically], women were just this invisible entity and we weren’t considered in clinical studies.” said Goudie. “Now we are. But with pharmaceutical drugs, medical devices… there were so many times when we were never part of the testing.”

The impact of that can be devastating. In the 1990s, surgeons began recommending using polypropylene mesh—typically used to treat hernias—to treat pelvic organ prolapse. This usage was approved based on weak evidence, however, so reports of severe complications quickly piled up. While the mesh was safe for hernias, vaginal use came with a risk of chronic pelvic pain, incontinence, obstruction and even vaginal wall erosion.

Funding Fallout

Clinical trials where women and gender-diverse people are under-represented—combined with a lack of funding—leave doctors in the dark and put patients at risk. While people who are fairly represented in those clinical trials gain safe access to new drugs and treatments, others may be forced to choose between older, less-effective options and newer options with unpredictable outcomes.

Fortunately, there are other health tech companies like Granville Biomedical, led by women and gender diverse people who are also pushing through these massive challenges. We spoke with AIMA co-founder Lanna Last for a story in our November issue, and these challenges are such a significant part of her story that we decided to dig into them for this article.

Last co-founded AIMA out of a desire to help people who experience the same intense period pain as her. She tried NSAIDs and birth control pills, and both had serious adverse effects, so her doctor eventually suggested opioids—an option that she simply wasn’t comfortable with. So she began managing her own pain with cannabis and brought that lived experience to AIMA, which produces CBD- and CBG-based suppositories for period and pelvic pain.

Unfortunately, as a women-founded health tech, AIMA faces the same funding barriers as Granville Biomedical. But AIMA’s focus on cannabis adds another layer of challenges. “I’ve never been able to get traditional funding in Canada,” said Last. “The rules around cannabis are very old-school. But I’ve also never gotten any VC funding in Canada.”

I’ve had way more traction with male VCs who have wives with period pain than anyone else.

—Lanna Last, Co-founder, AIMA

Instead of taking out loans like Goudie, AIMA’s co-founders initially bootstrapped the business by contributing personal funds and raising money within their own circles. When it came time to begin manufacturing products, they turned to the U.S. for help.

“We applied to IndieBio New York, which is a biotech accelerator, and they were great,” said Last. “They provided us a lot of research capital [so we could] prove that we’re safe and efficacious and the best on the market. It also provided our capital for our first run of manufacturing.”

After that, however, AIMA hit another wall—New York didn’t have a lot of state support for this kind of work, and even in the U.S., it was difficult to attract private investors because of the company’s purposeful slow-growth approach. So AIMA successfully applied for an accelerator program in Michigan, which provided some capital and connected the company with a local research hospital.

“They’ve been fantastic,” said Last. “The state has so much money for early-stage startups at early phases, and everyone is willing to help you. We’ve also gotten into Techstars Detroit, so there’s more capital coming in now.”

Last said one of the reasons they’ve had more success attracting funding in the U.S. is because American VCs are more open to investing in cannabis-based products. This might seem disconnected to the overall gender issue—but a bit of digging shows it’s not. A recent McKinsey Health Institute report shows that women spend 25 per cent more time living with debilitating conditions than men do, and they’re more likely to have their health concerns brushed off by medical professionals. It’s no wonder they’re more likely to turn to alternative health products.

The Slow Road to Progress

There are an increasing number of women-run VC firms in Canada, but according to Last, there hasn’t been much of a shift in terms of who and what gets funded.

“I’ve had way more traction with male VCs who have wives with period pain than anyone else,” said Last. “Female VCs want to compete with the men… so they’re only investing in things that they know will for sure give a return… even if it isn’t something they genuinely want to go for. I don’t even approach female VCs anymore, because I just know where the conversation is going to go.”

Dr. Ellen Farrell, a professor at the Sobey School of Business at Saint Mary’s University, chalks this up to unconscious bias. “Men and women both have an unconscious bias against women,” said Farrell. “There’s some work out of Harvard by Iris Bohnet, and she indicated that if you’re a woman in a group of men, you’re going to act like a man until at least at least 30 or maybe 40 per cent of the group is women. And that might be—but there are quite a few funds in Canada now with quite a few women, and the unconscious bias appears to be widening, not reducing.”

Harvard’s Making Caring Common Project shows similar concerning trends. Key findings included “almost a quarter of teen girls—23 per cent—preferred male over female political leaders” and “white girls presented with boy-led councils expressed higher average support for the council than white girls presented with girl-led councils.”

We’ve found a way to get money into women’s hands now, so I’m just driven to work with as many women as I can.

—Dr. Ellen Farrell, Professor, Sobey School of Business at Saint Mary’s University

Now there are a few more funds dedicated to specifically investing in companies led by women and gender-diverse people, including a billion-dollar fund in New York. “But even those things are only a tiny drop in the bucket of venture capital that’s out there,” said Farrell.

Farrell is addressing these issues through InvestorQ&A, a science-based online training program she founded to help women entrepreneurs learn to sidestep gender bias by controlling pitch conversations and addressing specific topics in a way that appeals to investors.

It seems to be working. According to Farrell, InvestorQ&A has helped women founders raise $23.9 million over the last two years. “We’ve found a way to get money into women’s hands now, so I’m just driven to work with as many women as I can.”

Despite the barriers, Goudie and Last are both determined to continue pushing forward in creative and strategic ways. “In FemTech and women’s health, the payout is definitely not financial, so you have to be prepared for that,” said Last. “And if that’s not you, that’s cool. There are times in our lives where we need to put a roof over our heads and food on the table, but there was a moment where I decided, okay, I think this is the way I want to make an impact on the world, and I need to put everything in my power behind it. If it works, great, and if not, at least I know I did everything I could possibly do.”

Editor’s Note: We attempted to include investor perspectives in this article, however none of those contacted returned our emails before the article submission deadline.