"Using data on the entire population of businesses registered in the states of California and Massachusetts between 1995 and 2011, we decompose the well-established gender gap in entrepreneurship. We show that female- led ventures are 63 percentage points less likely than male-led ventures to obtain external funding (i.e., venture capital). The most significant portion of the gap (65 percent) stems from gender differences in initial startup orientation, with women being less likely to found ventures that signal growth potential to external investors. However, the residual gap is as much as 35 percent and much of this disparity likely reflects investors' gendered preferences. Consistent with theories of statistical discrimination, the residual gap diminishes significantly when stronger signals of growth are available to investors for comparable female- and male-led ventures or when focal investors appear to be more sophisticated. Finally, conditional on the reception of external funds (i.e., venture capital), women and men are equally likely to achieve exit outcomes, through IPOs or acquisitions."