More and more women are starting businesses, but there is still a startup gender gap - and it's especially pronounced in industries such as tech and STEM. Suzanne Noble is the founder of Frugl, an events discovery app for Londoners on a budget, and has decades of experience in the PR, technology and entertainment sectors. Here Suzanne takes a look at the problem, and what could be done to fix things.
The gender gap in start-ups and technology in general has been well documented. A recent Harvard Business Review study revealed the following:
- In venture capital-financed, high-growth technology startups, only 9% of entrepreneurs are women.
Gender Gap Grader, an organization which collects data from popular sources to uncover gender inequality, revealed the following when turning its attention to AngelList, the popular database of start-up and technology businesses:
- Developer is the most popular role specified in AngelList, claimed by 45,000 men and women. Women represent 9% of developers. Other roles include software architect (4.2% women), entrepreneur (11.3% women), and marketing (33.8% women).
- Men tend to have 3.5 times more AngelList followers and 1.6 times more Twitter followers than women.
I’m not prone to gender stereotyping, but it’s clear that when it comes to the world of tech start-ups, there’s an obvious problem. Women aren’t getting funded, hired or recognized.
When you’ve had a door slammed repeatedly in your face, like I have, it does make you think that you must be doing something wrong, and that in order to succeed you’re going to have to try a different approach.
Let’s start with funding. In a piece of research commissioned by Telefonica looking at start-up culture, it was revealed “male entrepreneurs are 86% more likely to be VC funded than their female counterparts, and men were 59% more likely to secure angel investment.” There are a number of reasons for this, the most obvious to me being that over 90% of VCs are men who tend to be attracted to businesses run by people who look like themselves. I don’t believe that men go out of their way to not hire or fund women but simply act on instinct, believing that if they work with someone who looks and sounds more like them, they will have a more innate understanding of that person. Investors, especially those investing in early-stage businesses, tend to back people over ideas -so it stands to reason that the majority of businesses funded by (mainly) male investors are those founded by men.
As an older woman who came to the world of start-ups later than most, I’ve experienced my fair share of ageism and sexism. I was told by one Angel investor, “We don’t usually invest in people like you,” meaning older and female. Back in the early days of my start-up I believed that raising investments was what I needed to do and while I was often asked to pitch, I was rarely invited for a meeting by any of the investors in the room. After a while I decided to concentrate on building a real business rather than trying to make my face fit.
Businesses that make money are always going to be more attractive to investors. If there’s one positive fact about female entrepreneurs, it’s that they have a higher rate of success than men. In other words, a woman building a revenue-generating business is going to have a much higher chance of that business succeeding than her male counterpart. Where women can help ourselves is to think bigger and to have more confidence in our own abilities.
Brenda Major, a social psychologist at the University of California at Santa Barbara who conducted a large study on self-perception, said “I found that the men consistently overestimated their abilities and subsequent performance, and that the women routinely underestimated both. The actual performances did not differ in quality.”
This difference in how we perceive ourselves has knock-on effects. We take fewer risks, which leads to fewer women investing in start-ups, and we tend to build companies focused on what we know and believe we can execute rather than where there is a greater risk of failure. We often to prefer to go for the safe over the world-changing idea. This, in turn, has led to women often being focused around areas with which they are familiar such as fashion and family, the result being that, once again, women find it difficult to attract funding from the nearly all-male VC and Angel investment community who, very simply, have a hard time identifying with the problem that is being solved.
Now we are beginning to see more women Angel investors coming into the start-up ecosystem, and that can only be a good thing.
There is also a massive talent shortage, especially in the UK, around STEM with few women choosing these subjects in school. Deciding on which career path to take starts early, and more needs to be done to push women in this direction. The challenge is that for these young women, there are so few female role models that have successful careers in STEM and who are visible. It’s often not until a woman leaves university and is looking at careers that they realise how much opportunity there is within STEM-related fields. I’ve met many young women who have transitioned their careers from marketing-related jobs into becoming coders, all of whom have been successful in finding work. There are plenty of these kinds of jobs out there on job boards such as unicornhunt.io and others. Schools should be doing more to educate young women about the range of career options available to them, especially in STEM fields. I really admire Sherry Coutu, who created Founders4Schools to help bridge the gap by connecting business leaders with students.
Employers, who are serious about hiring by experience and talent rather than sex, could ask that CVs exclude the name and sex of the applicant. Same goes for investor pitches. Why not judge a business based the strength of the idea and its team (names/sex excluded) rather than because it has come to them via a friend of a friend?
I don’t expect to win a popularity contest for saying this, but if the government were serious about closing the gender gap in start-ups, putting in place an affirmative action programme would be a start. There is currently no incentive for start-up culture to change and unless it’s forced to, I don’t believe it will happen. While some may see these types of programmes as patronizing, without forcing the issue I think that change will be very slow. We need more women role models in STEM, founding businesses and being promoted. We must keep learning, stay strong and support each other wherever and whenever possible. That’s what I’ll be doing this year and I urge my fellow female entrepreneurs to join me so, together, we all succeed!
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