Women aren’t asking for enough money when it comes to angel and venture capital investing, Anne Ravanona, founder and CEO of Global Invest Her told today’s Female Founders Forum in Dublin.
Ravanona pointed to Kauffman Institute research that showed women access only 5pc of equity capital each year.
She said she believed there are barriers preventing female founders seeking the value they need and deserve.
“When looking for funding women don’t ask for enough. Typically they raise US$500,000 – how much time does that get you? Twelve months,” Ravanona said.
“You need to be asking for 18 to 24 months running. Each time you raise finance you give away equity and then you have to go for another round.
“Confidence is a real factor in blocking women from raising enough finance. Also financial literacy is a factor.
“The funding game is something of a dark art in women’s eyes, where language like ‘term sheets’ are used. They have to learn the lingo. It is absolutely one of the barriers blocking female founders from raising money.”
Ravanona said there is not enough portrayal of female founders in the media, just like in Hollywood, where 18pc of starring roles are allotted to women.
She pointed to GEM research that showed that in terms of confidence, women are actually just as, if not more, confident than men when it comes to entrepreneurship.
“The confidence thing is not true. We’re all scared, get over it.”
Ravanona said that in the US, 19.6pc of business angels are women and that successful women tend to be more likely to get involved in philanthropy. In the UK, this is as low as 5pc.
“There is a problem with this pattern recognition if people with the money are not seeing people who look like them,” she said, pointing to research from Stanford University that showed men tended to invest in companies led by men rather than women.
Laying a better foundation
Returning to raising finance, Ravanona said that women need to have confidence to raise more money, especially when it comes to bank loans.
“There is a myth that women are more risk averse than men. However, there is an 80pc commonality in the way men and women make decisions about risk.
“There is also a myth that investing in a woman-led business will yield a lower return. That’s not true. When you invest in a woman-led business more often than not you will get a higher return – women-led business in hi-tech yield a 35pc higher return on investment.”
“We need more women in STEM and hi-tech industries because these are the growth sectors.”
In closing, Ravanona urged people to sign a petition at Change.org to include Women’s Economic Empowerment on the UN Agenda.
Watch highlights of Anne Ravanona’s keynote address here:
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