Female founders say Covid-19 crisis will disproportionately affect them

8 May 2020

Image: © Bullrun/Stock.adobe.com

In a survey conducted by 500 Startups, two-thirds of female founders said they believe they’ll be disproportionately affected by Covid-19 compared to male peers.

Early-stage venture fund and seed accelerator 500 Startups has published the results of a new survey, which suggested that female entrepreneurs are concerned that the economic fallout of Covid-19 could have a greater impact on them than on male entrepreneurs.

500 Startups surveyed 199 female founders about the impact of the coronavirus pandemic so far.

The organisation said that support for female founders is rising, with 20pc of global start-ups raising their first round of funding in 2019 having a female founder on the team, but there is still work to be done. For instance, teams with female-only founders received just 2.8pc of all capital invested in the US start-up ecosystem in 2019.

And as the coronavirus pandemic continues, the UN has said that “emerging evidence on the impact of Covid-19 suggests that women’s economic and productive lives will be affected disproportionately and differently from men”.

It added that, on average around the world, women earn less, save less, have less access to social protections and financial resources, and are the majority caretakers at home. “Their capacity to absorb economic shocks is therefore less than that of men,” the UN added.

The impact of Covid-19 on women

500 Startups said that it expects there to be “a long-lasting, significant impact on women-owned and operated businesses” due to Covid-19.

Its its survey, 56pc of female founders said they are still fundraising and two-thirds believe they will be disproportionately affected by the Covid-19 crisis, receiving less funding as a result.

The biggest challenges cited by respondents during the crisis were customer acquisition, increasing runway and maintaining a healthy work-life balance. A third of respondents said that running a company while taking care of family members at home has been “very difficult” or “impossible” to manage.

The majority (69pc) said that they have six months or less of runway, while 40pc said they anticipate that they will need more time to meet fundraising goals.

500 Startups concluded: “Covid-19 is not only a test of our short-term support for female founders, but also of our ability to continue creating more equitable opportunities in the long-term.”

Kelly Earley was a journalist with Silicon Republic