Trailblazing the Glass Ceiling
Men dominate venture capital, making the task of female entrepreneurs much harder but wealthy self-made women are trying to redress the gender imbalance.
“The key thing that it comes down to is unconscious bias in the heads of male investors.”
Founder And Chief Executive Of Global Invest Her
Women entrepreneurs attract only a fraction of the funding received by their male counterparts and must overcome acute gender biases to succeed in business. However, those who do make it are even more determined to create a positive legacy for those who will follow them.
“Today, the hard truth is that my 15-year-old daughter won't have the same chances as my 12-year-old son if both went to raise money today,” said Anne Ravanona, founder and chief executive of Global Invest Her, which aims to improve female entrepreneurs’ access to finance.
“I’m working every day to change that. Our Global Invest Her platform and community demystifies funding for women entrepreneurs to help them get investor-ready.”
The scale of the task facing Ravanona – a Huffington Post columnist and TEDx speaker – is perhaps best illustrated by figures from a 2016 TechCrunch study.
This study found that globally from 2010-2015, only 10% of venture capital dollars ($31.5 billion) and 17% of seed/angel rounds ($2.35 billion) went to start-ups with at least one female founder.
The same survey also showed that 7% of partners in the world’s top 100 venture capital firms were women and only 38% had at least one female partner. Expanding that to a further 2,300 smaller VC firms, the gender ratio was almost the same, with only 8% of these companies’ partners being female.
“The key thing that it comes down to is unconscious bias in the heads of male investors. They tend to go for pattern recognition, meaning they invest in what they know and feel comfortable with – and that tends to be other young, white men. That's just a natural tendency, it's not as if there's a personal vendetta against women,” said Ravanona.
The typical 10-minute pitch for funding is also loaded against women, who tend to go into more detail than their male counterparts.
“We back up our information with a lot more data and male investors can sometimes perceive that as going off on a tangent, which is not actually true. Women also like to build relationships, and there is not enough time to do that in 10 minutes,” said Ravanona, whose company targets women aiming to raise seed funding up to Series A.
The gender gap
As part of BNP Paribas Wealth Management’s 2017 Global Entrepreneur Report, the European bank interviewed nearly 1,000 women entrepreneurs out of a total sample of 2,650 Elite Entrepreneurs.
Two-thirds of female entrepreneurs said they faced bigger challenges to succeed than their male counterparts.
“Their common goal is to combine achieving positive outcomes for their business and changing society,” the report states.
“These leading Women Entrepreneurs are aware of the legacy they want to lay down for future entrepreneurs – either female or male – to follow effectively in their footsteps.
“There is still some distance to cover in society before female entrepreneurs are fully accepted on an equitable basis.”
In the second part of this article we will learn how the number of female-owned businesses is rising despite these hurdles, as many women find making it alone the best way to find intellectually stimulating work.
PERCENTAGE OF FEMALE PARTNERS IN THE WORLD’S TOP 100 VENTURE CAPITAL FIRMS