Reluctance and unconscious bias on part of mostly male investors are holding back Ireland’s women founders.
A campaign to see women entrepreneurs secure €100m in funding in 2018 fell just shy of its target by less than €3m.
New research from TechIreland revealed that 47 companies with women founders raised €97.7m, an increase on the €84.3m that was raised in 2017.
‘What I’d like to see is a bottom-up approach which means more women entrepreneurs in the funding pool, and a top-down approach of more women on investment committees’
– DR PATRICIA SCANLON
However, 2018’s €97.7m is still just a sliver compared to the amount of funding raised by male-founded businesses, representing just 10.5pc of the total of €930m raised last year.
As well as being in the minority for deals, women entrepreneurs were also below the average when it came to the size of funding rounds. The average deal size in Ireland in 2018 was €4.3m. Women founders raised on average €2.1m while male founders raised on average €4.9m.
In terms of the numbers of tech founders in Ireland in 2018, 366 women founders were represented – just 17pc of the 2,173 founders counted.
For women entrepreneurs, funding rounds on average usually were made up of 55pc of venture capital and 19pc from grants. However, for men 65pc of funding came from venture capital while 10pc came from grants.
€43m, or 44pc of the €97.7m raised by women founders in Ireland in 2018, went into companies located outside Dublin.
The largest woman-founded company to raise funding in 2018 was Nora Khaldi’s Nuritas, which raised €30m. Other women-founded companies that raised venture capital included: TransferMate (€21m), Nova Leah (€3.7m), AQMetrics (€3m), TriviumVet (€3.2m), Anam (€2.3m), ProVerum (€3.5m), Kite Medical (€2.1m), Pharmapod (€1.9m), Soapbox Labs (€2.8m), Avectas (€2.1m) and Payslip (€1m).
Time to rewrite the narrative
“We could go with the narrative that we need to fix women, but that jars and doesn’t make sense to me,” said Dr Patricia Scanlon, founder and CEO of Soapbox Labs, in a TechIreland podcast.
“I don’t think that women need any more mentoring than men. What I’d like to see is a bottom-up approach which means more women entrepreneurs in the funding pool, and a top-down approach of more women on investment committees.”
For women founders, 71pc of funding came from domestic sources and 29pc international, while for men it was 53pc domestic and 47pc international. This suggests women founders in Ireland need to look outside Ireland if they intend to increase funding levels in 2019.
“You can secure funding from many different places. If not locally, get up and go to the UK, or look at Europe, or the grant system. I got the absolute no, the ‘my gut tells me’ no, the slow no, but in the end we secured amazing investors who got what we were doing immediately. It’s about perseverance and if you thoroughly believe you’re addressing an issue that other people don’t understand, don’t give up on it.”
TechIreland CEO Niamh Bushnell said that the near miss on the target was down to a number of still-unresolved issues, including unconscious bias and a general reluctance to support women founders.
‘Women too have a big role to play here; they need to ask for funding and for larger amounts of funding’
– NIAMH BUSHNELL
“What it tells us is that Ireland has started on a journey of change, culturally and systemically, but that we are still in the early stages. As a society we are paying more and more attention to the issues that directly affect and prejudice women, but we haven’t completely digested those issues yet.
“Female founders looking for funding in 2019 will experience the same reluctance and unconscious bias on the part of investors – whether VCs or angels, males or females – as they would have in previous years. That doesn’t sound like progress but I’d also say that education is happening, awareness is building, and investors are being prompted to look at their portfolios and ask themselves about bias. We’re not at the point of real change yet but it’s a first big step towards it.
“During the €100m campaign, a number of angel investors told me they were genuinely curious as to why we needed this campaign. The answer was easy: take a look at your current portfolio.”
To change the numbers, Bushnell said the key is to keep tracking and publishing the numbers, showcasing the success stories such as Soapbox and Nuritas, and comparing Ireland to other countries as a benchmark.
“We need change to happen from both sides: bottom up to encourage more women to start companies and look for funding, and top down with more women at the funding table as investors.
“Government can create the environment for this to happen in Ireland given their proactive approach to funding VCs and numerous other investment-related programmes in Ireland.
“Women too have a big role to play here; they need to ask for funding and for larger amounts of funding. They also need to call out unconscious bias when and where they experience it, and let their colleagues know that it’s not acceptable,” Bushnell said.