The media loves women-led start-ups, something that is great for publicity - and nevertheless a shame.
Female leadership at the helm of start-up entreprises is wonderful and truly a sign that progress, however meager, is happening in the name of gender equality. The headlines, though, mask a bigger issue: We celebrate unicorns, like women start-up CEO’s, because of their scarcity.
The coverage also sidesteps the underlying problem - parity in entrepreneurship. Understanding the bigger issue begs two questions. First, why do we see so few women leading start-ups? Dig deeper and you will land on question two: Why do women have such a difficult time securing seed funding?
As inspiring as unicorns can be, we do not have the luxury of just admiring them. We need women to build the businesses of tomorrow. Female entrepreneurship will have a real and lasting impact on social challenges coming down the pike.
“Female entrepreneurship will have a real and lasting impact on social challenges coming down the pike.”
Consider the following: In the US, the share of female tech founders has been hovering around 17% for almost ten years. What’s more, a 2016 study from the Entrepreneurs Network found that only 9% of start-up funding in the UK went to companies with at least one female founder, and men were 86% more likely to be funded by venture capital.
Breaking expectations and perceptions
It’s difficult to quantify social factors that influence women’s undersized representation among entrepreneurs, but one thing is clear: They collectively start to work on us all at an early age. Beginning in childhood a combination of social pressure and formative factors change the perceptions and expectations for budding women entrepreneurs. Girls and young women are socialised to avoid risk; their brothers, meanwhile, are encouraged to scrape their knees and play in the dirt. Girls and young women feel an omnipresent pressure to be nurturers or supporters rather than assume leadership roles. The same social fictions spill over in to the world of business, affecting how women approach the prospect of leading a start-up, and how others perceive that same aspiration.
These significant barriers add up and lead to greater difficulties in securing resources to turn ideas to reality. Together, they contribute to the fact that at every stage of fundraising, women’s start-ups raise progressively fewer seed capital - only 7% by late rounds.
Ironically, when women entrepreneurs do get funding, their rarity often becomes an asset. As unicorns, they are much more noticeable in the marketplace after clearing so many early hurdles. Just look at entrepreneurs like Marjolaine Grondin, CEO and co-founder of Jam. She secured 330,000€ in her first round of funding for an AI chat-bot to help young people navigate banking and student life that paved the way for a later tranche of 1,000,000€.
Paving the way for women-led start-ups with impact
An ideal world, however, is one where easy access to funding for a variety of women-led start-ups doesn’t make the news. How do we do that?
“An ideal world, is one where easy access to funding for a variety of women-led start-ups doesn’t make the news.”
First, we have to encourage entrepreneurship broadly, and create new points of entry for entrepreneurs of all types, including women. France, where a new wave of entrepreneurial spirit has taken hold, is a good example. There, generations who previously might have opted for relatively secure civil service jobs, now prefer the challenge of starting their own businesses. With these young people as the vanguard, the French government is doing its part by putting forward new reforms to make entrepreneurship easier. One example is by extending unemployment benefits to those looking to set up shop for themselves.
Additionally, we have to create new networking and mentorship opportunities to connect women entrepreneurs and senior women leaders in established businesses. Initiatives such as the Women’s Forum for the Economy & Society are invaluable. They raise the profile of women led start-ups and help them gain a foothold in business-to-business markets where strong networks are important.
The need for social impact
We can only meet the world’s new challenges by putting our full support behind a new generation of women entrepreneurs and their start-ups. Research from our study, Women’s Forum Rising Talents, shows that 71% of the young women leaders define career success in terms of making a positive social impact. These are our innovators, the risk takers who thrive on solving problems that leave the rest of us puzzled. It’s imperative that we set society’s course ahead by those shining stars, their unique, diverse perspectives, their desire for social impact and most importantly, their capacity for innovation.