The recent #Womenterprise report shows female-led companies perform better, female-led teams produce better returns on investment, and year over year female-founded startups show 100%+ increases over broader startup exits.
Why then did female-founded or co-founded startups in 2021 barely tap 25% of the market? Moreover, while that statistic is concerning, in enterprise software startups, that market percentage drops to an astonishing 1.9%.
What gives? It only makes sense that female founders are not being taken seriously by venture capitalists or female founders are not showing up and pitching in numbers rivaling that of their male counterparts, or both.
Where are the women? They leave.
According to TechRepublic, we know that more than half of women leave the tech industry. Essentially, many future female technologists or innovators simply walk away long before any founder dream turn into founder status.
Whether it be in the classroom or workplace, women get less support from higher-ups, less opportunity for advancement and are paid less than their male counterparts for equal work.
For those that remain in the tech workforce, the signs of professional disparity persist.
In technology leadership today, females are either largely ignored or not present. And to that statement, there are common responses. Those standard knee-jerk responses, despite data to back up the disparity, tends to be one or all of the following:
- That’s not been my experience
- Women need to be more (insert adjective here, example assertive, strong)
- This is fake news
When one isn’t taken seriously as a co-worker or customer, why might one expect buy-in or advocacy or even attempt investment asks?
Equal opportunities needed
Men continue to be judged on potential and women on past experience. The problem is that many of the world’s most innovative tech solutions being pitched have no past experience by design. They are new, fresh and game-changers. And apparently even in vetting investment, the old competence versus confidence argument remains.
How many exciting startups do we need to hear about involving men with no experience, building from their garage? It’s exciting when a tech dude gets it, but again, where are the women?
According to Findstack, about 90% of startups fail. Maybe success would be higher if we judged more on competence less on shock-and-awe confidence. Our tech world would be a much healthier place if we looked with a bit of pessimism/side-eye at the over-confident.
While we all thrive on the excitement surrounding unexpected successes, those exceedingly rare sneaky successes should be served within a more widely successful startup marketplace. Certainly one that boasts more than a 10% success rate.
We look to the funding.
The DNA of venture capitalists
In imagining the funding roadmap, it’s important to follow who is funding. According to The New York Times Alisha Gupta, roughly 15% of venture capital partners are female. Why so low? It’s more of the same. Given 20% of financial leaders are female, these are the leaders tasked to promote future leaders. Then, of course, financial leaders make the investment and funding decisions.
The cycle continues.
There should be no surprise that there is a wide gender gap in foundership. But that gap can be improved if we start by acknowledging the gap.
We can improve the gap
Addressing the founders gender gap requires:
- Acceptance. Accepting the gender imbalance in technology is a result of bias, spanning implicit to latent, historical through today.
- Acknowledgment. Acknowledging the imbalance is unhealthy and a more balanced playing field would result in stronger technology options, richer technology experiences, greater success and strengthen general industry overall.
- Investment. Leaders, companies, society needs to invest in training, opportunities, education, media, communication to make bias both unacceptable and American-human-nature, not to dismiss but normalize. We need to normalize a healthy gender balance.
- Flood the market. There are so few female startup founders that even when googled today, within the first five news articles, what’s at top? Elizabeth Holmes and Theranos. When much of the U.S. equates female-led startup with one massive fraud case and stops there, we need to recognize that more women founders need to rise up.
What we all need to do
- Keep our girls in STEM fields. Support them, invest time in them, provide equal tutelage and opportunity for them
- Listen to all ideas. Our world ratio is roughly 50:50 male/female, our U.S. gender ratio is 97:100 male/female, the U.S. workforce gender ratio is 43:57 male/female, U.S. college graduates are 40:60 male/female. Where does it make sense that any investment statistic is so heavily leaning in one direction?
- Don’t ignore bias. If you hear something, say something. Call out biased language, actions and slights. While it might be uncomfortable, the needle will only be moved when moved together.
- Support the groundswell. Look for, and support, the community efforts delivering opportunities. On social networks, non-profits are funding overlooked female-led startups. Women Who Tech is just one example, looking to double their startup funding in 2022. Allyson Kapin shares, “100% of your donation will fund grants to startups led by #women founders in 2022. We've already funded 20 startups. Help us 2X it!”
Reality check
Today, the female founder gender gap is a chasm and should be as surprising as next Easter falling on a Sunday. Despite data showing female-led is stronger, investment in female founders is consistently weaker. We know the issue is real.
Do we need to put all the responsibility, once again, on the women? Find the female venture capitalists and angel investors to move this needle? Do we leave it to rely only on the women to support women - knowing the facts of better, stronger? Or can we, within this year of 2022, all come together and start offering equal opportunities for development and investment in our female startup founders? History proves we are stronger when we tackle issues together.
Let’s make 2022 the year to lessen the gender chasm in tech and enterprise software startup funding.
"Startup" - Google News
January 16, 2022 at 11:28PM
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2022: The Year We Fix The Gender Gap In Tech Startup Funding - Forbes
"Startup" - Google News
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