According to Crunchbase, female-founded startups are not on the up curve. In fact, the number of venture-backed companies with at least one female partner has plateaued at around 17% since 2012, with only one-third of that number representing female-only founder teams. While organizations like SheWorx are working with both entrepreneurs and investors to address challenges that female founders and underrepresented minorities face in the startup world, men remain at the forefront, particularly when it comes to banking the big bucks. Difficult to fathom, given the fact that startups with female founders almost universally outperform their male-only counterparts. So why is this trend still the accepted cultural norm? When it comes to the dominant conversation, what still needs to be said, in order to shift the needle towards gender parity?
Acknowledging unconscious bias will allow female founders to gain traction
“VCs [need to] include gender and racial diversity on their teams, so it's not just ‘bros’ investing in startups run by people who look like them” - Lucia Brawley, Co-founder, Amp.it
When Bill decides to invest in Harry’s project, because they both went to Harvard in the late 80’s and belonged to the same fraternity, this is unconscious bias. When Bill decides not to invest in Chen, a young Chinese woman, recently graduated from the Shanghai University of Finance and Economics, despite being interested in her project because he ‘just didn’t feel a connection’, this is unconscious bias. Bill naturally favors Harry because they resemble each other and share similar values. The problem is that this unconscious bias unwittingly discriminates against Chen because she is not a white, middle-aged, presumably heterosexual man with an Ivy League education. In order to level the playing field, and ensure equal opportunities for everyone, investors need to look at themselves and then look at their portfolio. If the resemblance is uncanny, it might be time to diversify.
Building diverse teams will lead to greater market opportunities
“Audience insights are critical in spotting prospects that may not initially be logical. It's not about fairness, lowering standards, or equality...it's about seeing market opportunities with audiences that may not look/feel/act/think like you” - Jill Angelo, Co-Founder & CEO, Genneve
Companies with more diverse workforces (startups included) perform better financially. It makes sense. Intelligent product design is related to matching demographics. A woman is much more likely to understand the needs of a woman simply because she’s walked a mile, and can offer insight into product design based on her own experience as a consumer. Women are primary decision-makers for consumer goods in 85% of households. Investing in female founders who are developing products geared towards women is a no-brainer. Convenience. Practicality. A strong, enduring brand that fosters an emotional connection. Women know what women really want, and they’re in the best position to deliver targeted products to fulfill largely unmet needs in the marketplace. Creating a diverse, collaborative investor-founder network, that acknowledges the unique marketing advantages that women possess will allow female-founded businesses to thrive.
Promoting more female investors will equalize the investment landscape
“We need to #changetheratio. To do that, we need to bring more women into the funding side and give opportunities to more women and women of color to become VCs. That will also then impact the number of female and Women of Color founded companies” - Chia-Lin Simmons, Founder & CEO, LookyLoo
Female founders receive less funding then their male counterparts, by a long shot. In 2016, VC’s invested $58.2 billion in companies with all-male founders while women received a piddly $1.46 billion. One of the main reasons is that women entrepreneurs simply aren't able to access a (predominantly male) network of VCs. With women making up only 3% of VC funders and less than 15% of angel funders, it’s no wonder that, given obstacles like unconscious bias and an ‘old boys club’ mentality, women aren’t gaining more traction when it comes to fundraising. Women have great ideas. But they can’t fully realize their potential without funding. More female investors at every stage will help to create more opportunities for female founders to excel, which in the long run, may contribute to more women with the money and know-how to begin investing themselves.
Challenging parental norms will facilitate inclusivity
“If the ‘burden’ of having children continues to fall on the female, the inequality of females in the workforce will continue as they will be viewed as "weak links"… if and when they decide to have children” - anonymous SheWorx100 founder
Family planning is stressful, especially when women are expected to be more involved as caregivers in the early stages of their child’s life. Maternity leave. Late night feedings. Diaper Changes. Day care. The list goes on and on. Work-life balance can be hard to come by when you can barely find a slot in the calendar to feed yourself, let alone raise an infant alongside Series A and B funding. Challenging traditional gender roles when it comes to family matters, specifically how the parental work load is divvied up in early stages, is an important social shift that, in the long run, will help to facilitate a more inclusive startup environment, in a world where women and men share domestic responsibilities equally, and have equal opportunities to continue to develop their careers.
Starting conversations, especially uncomfortable ones, is an important part of fostering change. Because our words become our behaviors which in turn, become our values. Speak candidly. Make allies. Ask for support. Tell it like it really is. But be careful to offer a solutions-based and data driven approach. Starting a dialogue for people to share their various perspectives can open the door for new opportunities and potential partnerships. It’s up to you to form an opinion and spread the message. Change is possible.