In the trenches of the startup economy, getting funding for your startup at the right time can make all the difference between success and complete failure. However, rampant gender bias often skews the scales away from women and their startups. Don’t believe it? In 2017, only 2 percent of all startup fundraising in India went to women founders. That’s roughly a minuscule $242.7 million of the $12 billion risk capital raised by private companies in 2017. 2017 has by no means been a one-off, unfortunate year for women founders. It is, in fact, a traditional challenge with women founders around the world.
There is a smaller pool of women starting businesses around the globe, and thanks to the lack of funding, there are more exits from women from the already small pool, leading to a vicious circle of sorts.
The reasons range from social conditioning and gender biases among venture capitalists to a social structure that puts the onus of home and childcare entirely on women. It needs to be said that the numbers signal disparity, even though it is widely recognized that women in corner offices and in the workforce, in general, are good for the economy. The logic is simple – more women get access to capital along with their male counterparts and scale up their businesses, more revenue is generated, more taxes paid, and more jobs are created. If you still need numbers, here is one for size – according to a McKinsey Global Institute report, equal opportunity and a level playing field for Indian men and women in public, private, and social sectors could add $12 trillion to the global GDP by 2025. That is a striking 11 percent increase from current projections.
But consider this – despite the soaring lack of allies and supporters, women already run 14 percent of Indian businesses, almost 80 percent of which are self-funded. Can you imagine what fair and unbiased access to VC funding could mean for women entrepreneurs?
But for that, social conditioning and gender biases and the very concept of set-in-stone gender roles will have to go. Women are going to have to change too. We scouted for all that funded and successful women entrepreneurs have said over the years about what it means for a woman to get funding. While the essentials of entrepreneurship – like a great idea, a good team, and customer centricity – remain the same, here are some top tips on what women need to do differently to claim their share of VC funding.
It is no surprise that women face unique challenges when they get on their entrepreneurial journey. At the funding stage, these challenges can range from age- and gender-based discrimination at best to harassment at worst. Mentors who have perhaps been through the same journeys or have observed them can help navigate such times with timely guidance and advice. Thanks to coaching gaining steam in entrepreneurship and career circles, there are many professional groups that now offer advisory services and mentorship to women looking for them. Such groups and organizations include names like US-India Business Council, Sheroes, and Kstart by Kalaari Capital, to name a few.
As a Knowledge@Wharton article says, “Men have more hubris – meaning they tend to be superbly confident in their abilities. Women, meanwhile, in addition to having lower hubris, also have higher levels of humility, meaning that they are less likely to attribute their success to their own talents and resourcefulness.” One reason for this is that women are often conditioned to attribute their success to luck and chance. They tend to understate their ambitions and goals, thus losing out to male competition when it comes to funding because investors are looking for promised returns. This needs to change for women to achieve the visibility that eventually leads to funding and success in entrepreneurship circles.
From finding successful mentors to getting to know VCs, from entrepreneurship lessons to shared challenges and successes with industry peers, networking has many benefits. When we say “network”, we don’t just mean going to all the networking events around you and saying hello to strangers. We mean going to the good ones and/or meeting the right people through your social and professional networks, engaging them in meaningful ways. There is as much networking to be done now in networking events as there is on Twitter and LinkedIn. Don’t shy away from either – reach out and stay in touch. These networks will help when the time comes to find the first client for your new business or to look for funding.
Many trailblazing women entrepreneurs speak in favour of networking. Carolyn Cross, the CEO and Chairman of the Board of Ondine Biomedical, says, “Networks were integral to me. Without the connections I made in pharma, biotech, and the medical devices community, it would have been very difficult for me to open the doors and get the external funding I needed.”
Look around – we live in an age of personal branding, simply because social media lets us do it. If you are going the funding route, you are going to have to create a brand for yourself even before you get face time with potential investors. From speaking at conferences to sharing opinions and thoughts on LinkedIn, Twitter, blogs, or online publications, being found, read, or heard and remembered is important to break through the clutter.
According to Dr Candida Brush, a professor of Entrepreneurship, holder of the Franklin W. Olin Chair in Entrepreneurship, and the Vice Provost of Global Entrepreneurial Leadership at Babson College, USA “Developing your personal brand in your new enterprise or entrepreneurial initiative is essential. It is easier today because of the instant visibility an entrepreneur can get through social media. But it is also more difficult because you need to continually update, manage and strategically focus your communications on appropriate audiences.”
She adds that the process of personal branding starts with deeply understanding what you care about, “Be authentic – it’s easy to say, but what this requires is a clear understanding of your personal values and what this means for your business identity. In a few words, answer the question ‘what do I stand for?’”
Many corporates have actually stopped including questions about marriage and raising families from interviews, knowing well that marriage and kids affect both men and women and that if they exclusively hire those who are free of any family commitments, they would not really have enough people to do the work. Unfortunately, entrepreneurship circles have no such written rules.
Gender bias and social conditioning unfortunately still come into play from investors who are putting the millions worth of assets at risk for your business. The answer then is for women entrepreneurs to rise above these questions and explain their plan to balance social expectations like marriage and children with the professional ambition of starting up successfully. Sometimes, it needs to done proactively as a precautionary measure, because some investors may not even ask the questions. You don’t have to talk at length about it, but making it part of your key message helps. It is a part of personal branding, much like the “aggressive go-getter who doesn’t take no for an answer” has long been the key message of most male founders, in Silicon Valley and closer home.
Women entrepreneurs are finally getting their due in terms of visibility and support from various organizations and groups including governments. But much work remains to be done on the ground in terms of funding and equal footing. While social conditioning and gender bias in the powers-that-be reduce in due time, perhaps one way to get ahead would be to demand what is rightfully ours, including funding. It will take some doing but now is the time for it.