Why is it harder for women entrepreneurs to get funding?

9 Aug 201775 Shares

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Global Invest Her founder Anne Ravanona speaking at Inspirefest 2017. Image: Conor McCabe Photography

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Global Invest Her founder and Inspirefest 2017 speaker Anne Ravanona puts out a call to invest in women entrepreneurs.

The hard truth is: it is harder for women entrepreneurs to get funded.

I founded Global Invest Her to demystify the funding process and help women entrepreneurs become investor-ready, to get funded faster.

I am passionate about creating a profound shift in the funding of early-stage women entrepreneurs to help create a more level playing field.

Our objective is to help create equal opportunities for talented women entrepreneurs to access capital, many of whom are being overlooked when it comes to funding.

‘A major blocker for women entrepreneurs is unconscious bias in the hearts and minds of investors’

Progress

As a change-maker in the global funding ecosystem, I have noticed these three global trends in funding for women entrepreneurs.

  • More money: There are increasing numbers of women’s angel networks, crowdfunding websites for women entrepreneurs, and funds for investing in women entrepreneurs.
  • More awareness: More research is being published about how women entrepreneurs give better return on investment to investors, as well as statistics about funding for women entrepreneurs. Tech and start-up conferences are also making sure they have more women speakers.
  • More noise: I see several articles being published every day about funding for women entrepreneurs, compared to one per month when I first set up a Google alert three years ago!

Roadblocks

Why is it harder for women entrepreneurs to get funding?

Over the past three years, I have personally interviewed more than 250 women entrepreneurs from Europe, North America and Latin America about their funding journeys. I’ve also spoken to investors about what they’re looking for.

I found that part of the problem for women entrepreneurs pitching for funding is that there are not enough women investors.

Only 2.7pc of all US companies receiving venture capital had a woman CEO. This is according to the 2014 Diana Report from Babson College, which also found that only 6pc of venture capitalists and 20pc of business angels are women. So, for now, the vast majority of funding capital is in the hands of men.

Another major blocker for women entrepreneurs is unconscious bias in the hearts and minds of investors. Intrinsically linked to that is the fact that many investors have unconscious bias towards investing in what they are comfortable with – namely, white male entrepreneurs with a similar background.

Yet Kauffman Foundation research has shown that women-led technology firms had 35pc higher return on investment and 12pc higher revenue than male technology firms. Venture firms with women-led companies in their portfolio performed better than firms with all-male founders in their portfolio, according to the SBA Office of Advocacy.

The third factor I have noticed is that a lot of women entrepreneurs actually hold themselves back by not thinking big enough or asking for enough money. They tend to have 500 cups of coffee with the wrong people before finding the right investor, whereas male entrepreneurs have 10 coffees with the right people and raise more money.

Call to action

If you love challenges and like to get things done through great people. If you are really willing to invest your time, expertise and take the right risks. If you are ready to make a great return on investment and help a great start-up grow and scale – then invest in women entrepreneurs!

Spread your talent to the world! Share this widely with your communities to help create equality in access to finance for women entrepreneurs.

Together, we can make the change happen faster.

A version of this article was first published on Medium.

Inspirefest is Silicon Republic’s international event connecting sci-tech professionals passionate about the future of STEM. Ultra Early Bird Tickets for Inspirefest 2018 will be on sale soon. Sign up here to be the first to know when!

Anne Ravanona is founder and CEO of Global Invest Her, an online platform and community for early-stage women entrepreneurs that helps them to get investor-ready and get funded faster.

editorial@siliconrepublic.com