Why do so many profitable, growing women‑led businesses struggle to access the capital they need to scale? Drawing on the insights and investment experience of Tracey Warren, founder of F5 Collective, this feature explores the “Missing Middle”, the blind spots within traditional venture capital, and how funding models may need to evolve to better reflect how modern businesses are actually built.

In your experience working closely with founders, what is the most common misconception people have about why women-led businesses struggle to access funding?

The biggest misconception is that it is a pipeline problem that there simply aren’t enough women building ambitious companies. That is not what we see.

Women are building strong businesses. Many of these companies are profitable, growing and deeply connected to their customers. The real issue is that the capital system was never designed to recognise them.

At F5 Collective we talk about what we have coined the “Missing Middle”—profitable small and mid-sized businesses that sit between venture capital and impact investing. These companies are often overlooked by both, and at the same time underserved by traditional banks. Founders end up stuck in a capital gap unable to scale.

The opportunity isn’t small. It is enormous. But the market simply isn’t looking in the right place.

What first made you realise that the issue wasn’t simply about the number of women starting businesses, but about how capital is allocated?

After deploying our first fund, we spent time conducting deep research looking closely at the sectors where women are building businesses and how those businesses actually grow. That process ultimately led us to write our theory of change.

What became clear very quickly was that many women are building companies differently from the traditional venture-backed playbook. They are building in sectors like services, health and consumer and they are often prioritising strong fundamentals like revenue, customer loyalty and sustainable growth.

But the capital system wasn’t designed for that type of company.

We kept seeing the same pattern. Women building real businesses revenue-generating, customer-loved companies being told they didn’t fit the venture model. At the same time, traditional banks weren’t structured to support them either.

When we stepped back and looked at the market more deeply, it became clear this wasn’t random. It was structural.

There is an entire segment of companies sitting between impact and venture capital that simply doesn’t fit the traditional frameworks. Once you see it, you realise just how much opportunity the market has been overlooking.

Venture capital has historically been designed around a particular type of company. What characteristics does that model prioritise?

Venture capital was designed for a very specific type of company: technology startups capable of scaling extremely quickly and delivering outsized exits. It prioritises hypergrowth, massive addressable markets and exponential scale.

That model works incredibly well for certain businesses. But it also creates a very narrow lens for how investors recognise opportunity. Anything that grows differently tends to get filtered out very quickly.

Which kinds of businesses—particularly those founded by women—tend to fall outside that traditional investment framework?

The businesses we consistently see women building are in services, health and consumer sectors. These companies scale through brand, community, distribution and operational excellence, not just software-driven exponential growth.

They can become extremely valuable businesses. But because they don’t follow the classic venture trajectory, they often fall between venture capital and traditional lending. Ironically, this is where some of the most durable companies are being built.

Why do you think so many promising businesses sit in this gap between early-stage funding and institutional capital?

Because the capital stack was never designed for them.

Early-stage funding backs ideas. Venture capital backs hypergrowth. Private equity comes in once companies are already large. But there is a huge segment of companies that are already working they have revenue, demand and strong fundamentals yet they need flexible growth capital, not venture capital.

That is the Missing Middle. And it is one of the largest untapped opportunities in private markets.

From your perspective, what are the most important resources founders need alongside funding in order to scale successfully?

Capital is important, but on its own it rarely changes the trajectory of a business.

What founders need is an ecosystem around them. That means capital, but it also means access to distribution, strategic support, visibility and the right partnerships at the right time. These elements tend to compound and when they work together, they unlock growth faster than funding alone ever could.

That insight is really what shaped the F5 Collective model. Instead of thinking about capital as a single product, we think about it as part of a broader ecosystem. We are building a suite of products that work together—flexible growth capital alongside community, distribution opportunities and strategic support designed specifically for the types of businesses women are building.

Because when those pieces are connected, founders are positioned to scale not just funded.

How have networks, distribution, or visibility played a role in the growth of the founders you’ve worked with?

One of the biggest constraints founders face isn’t just capital, it is access to distribution and visibility. You can have a great product and strong fundamentals, but if the right customers don’t see you, growth takes much longer than it should.

When founders gain access to the right ecosystems, things start to move quickly. Visibility creates credibility. Credibility creates momentum. And momentum attracts both customers and capital. This insight is a big part of what the F5 Collective model is built around. We don’t just think about funding, we think about how to unlock distribution, community and market access for founders.

A great example of that was our two-day activation last November where four women-owned brands collectively generated over $300,000 in sales. That kind of outcome shows what happens when you combine visibility, distribution and community in the right environment.

For many founders, those opportunities would normally take years to build. Our goal is to compress that timeline by creating an ecosystem where capital, distribution and visibility work together to accelerate growth.

What strengths do you consistently observe in women founders that are often underestimated by investors?

Two strengths stand out consistently.

The first is proximity to the customer. Many women founders are incredibly close to the problems they are solving and the communities they are building for. That proximity creates deep insight into customer behaviour, needs and purchasing patterns. It often leads to stronger product–market fit and highly loyal customer bases. Yet that kind of customer intimacy is often underestimated by investors who are trained to look primarily at technology or scale narratives.

The second is capital efficiency. Many women founders build strong, revenue-generating businesses with limited resources. They focus on fundamentals—customers, revenue and sustainable growth rather than chasing hype. Those qualities create resilient companies. And over time, resilient companies tend to outperform.

Ironically, the very strengths that can make these businesses incredibly durable are often the ones the market overlooks at the beginning.

Are there particular industries or business models where you see women building especially strong companies today?

We are seeing exceptional companies emerge across services, health and consumer sectors.

These are some of the largest and most resilient parts of the economy because they sit at the centre of everyday life—how people live, work, shop, care for themselves and their families. They are not niche categories. They are mass-market industries with enormous economic impact.

What is interesting is that many women founders are building businesses in these sectors because they are incredibly close to the customer. They understand the problems, behaviours and purchasing decisions in a very real way. That proximity often translates into stronger product–market fit, loyal communities and brands that customers genuinely trust.

These companies may not always follow the traditional venture-backed technology playbook, but they are building real, durable businesses with strong demand and clear paths to scale.

When you step back and look at the size of these markets, it becomes obvious where the real opportunity sits. The businesses women are building across services, health and consumer sectors represent the mass market. That is exactly what much of the investment ecosystem is missing.

For women founders seeking capital today, what signals or milestones make a business more attractive to investors?

At the end of the day, investors are looking for evidence that a business truly works.

That usually starts with the fundamentals—revenue growth, strong customer retention, repeat demand and a clear pathway to scale. Those signals demonstrate that the market wants what you’re building.

But alongside traction, founders also need to show discipline in the underlying business fundamentals. Robust financials, clear models and well thought-through projections matter. Investors want to see that founders understand their unit economics, their cost structure and how the business scales over time.

The story and the numbers need to align.

Founders often spend a lot of time crafting a compelling narrative, which is important but the credibility comes when the financials support the story being told. When those two things are in sync, investors can see both the vision and the pathway to getting there.

For investors looking to support the next generation of entrepreneurs, what opportunities might they be overlooking?

The biggest opportunity investors are missing today sits in what we call the Missing Middle.

These are profitable, growing women-owned businesses that sit between venture capital and traditional bank lending. They have already proven demand, they have real customers and revenue, and they are ready to scale. But because they don’t fit the traditional venture capital template, they are often overlooked.

At the same time, banks are rarely structured to provide the type of flexible growth capital these businesses actually need.

So you have this extraordinary segment of the market thousands of companies across services, health and consumer sectors that are fundamentally strong businesses but structurally underfunded.

From an investment perspective, that is not just a gap. It is an inefficiency. And inefficiencies are where the most compelling opportunities live.

At F5 Collective, we have built our entire model around unlocking that segment. We have spent years researching the sectors, the founders and the capital structures that actually support these businesses. What emerged was a clear thesis: when you provide the right type of flexible capital alongside ecosystem support, these companies can scale significantly while founders retain ownership.

This where the next generation of enduring businesses will come from. The market just hasn’t fully recognised it yet.

How do you see funding models evolving over the next decade?

Over the next decade, I think we will see a significant shift toward more flexible and aligned capital structures.

The traditional venture model was designed decades ago for a very specific type of company and a very specific path to scale. But the reality is that the way founders build businesses today has evolved. Distribution is different. Technology has lowered barriers. Brands can scale globally online. Communities can form around companies much faster.

Modern businesses are being built in modern ways yet many founders are still being offered capital through traditional, inflexible funding models that were never designed for how these companies actually grow.

Increasingly, founders are looking for something different, capital that aligns with how they want to build their companies, not capital that forces them into a model that may not fit. They want funding that supports growth while allowing them to preserve ownership, maintain control and build long-term value.

I feel funding models of the future will increasingly recognise that alignment between capital and founder vision is what ultimately creates the most enduring businesses. 

If progress continues, what would a more balanced and effective investment ecosystem look like?

A healthier ecosystem would start with a simple recognition: great companies don’t all look the same, and they don’t all scale in the same way.

For too long the investment landscape has been built around a very narrow template primarily the venture-backed technology startup. That model works well for certain types of companies, but it was never designed to support the full spectrum of modern businesses being built today.

A more balanced ecosystem would recognise that different companies follow different growth paths.

Some businesses will still pursue hypergrowth and venture capital. Others particularly in sectors like services, health and consumer scale through brand, distribution, operational excellence and strong customer relationships. These companies often generate real revenue early and build durable businesses over time.

Supporting those different paths requires a broader range of capital solutions.

Instead of a single funding model, we will see ecosystems built around a suite of funding products designed to support different stages, different industries and different ways of building. Capital structures will need to be more flexible, more aligned with founders and more responsive to how modern businesses actually grow.

If you could change one aspect of how capital flows to founders today, what would it be?

I would fundamentally challenge the idea that closing the gender funding gap requires niche solutions. That is where the market continues to get it wrong.

For years the conversation has focused on small pools of capital or specialised programs designed specifically for women founders. While well intentioned, that approach treats women as a niche segment of the market. They are not.

Women are building businesses across services, health and consumer sectors which are industries that represent some of the largest and most resilient parts of the global economy. These are mass-market sectors that touch everyday life: how people live, shop, work and care for themselves and their families.

The real opportunity isn’t in carving out smaller pools of capital.

It is in redirecting capital toward the massive markets where women are already building successful companies.

The gender funding gap will close when the investment ecosystem finally recognises the mass market opportunity that has been sitting in front of us all along.

Tracey Warren
CEO & Founding Partner
F5 Collectve