How to address challenges that Female Founders face?
Women are far less likely than men to own businesses. Worldwide, women run 40% fewer businesses than men. When men run businesses they are viewed as sharks, aggressive, confident and competitive. When women run businesses they are viewed as a side hustle - something that they will give up on should some other pressing concerns pop into life. Launching a venture and sustaining it requires social capital, which is basically everything from your support system at home to the network that you build outside for work to how you are perceived when you go out seeking business.
I wrote earlier this month on why it is challenging for female founders to sustain out there. And this article is to swing it back to the challenges that we discussed then. The challenges that hold women back were rules written by others for others some 100 years ago and they are no longer working in today’s workplace.
Several research studies indicate that women-led companies outperform those led by men. One fascinating analysis found that women CEOs in the Fortune 1000 drove three times the returns as S&P 500 enterprises run predominantly by men! Another study by one of the biggest banks in Europe, Nordea, showed that companies with a woman in the chief executive or chairman role performed far better than a major global index over an eight-year period. Credit Suisse also unveiled a research report showing that companies with more female executives in decision-making positions continue to generate stronger market returns and superior profits. (1)
Here is my take on what we could try to do address the challenges that women face:
Funding and Training Gaps: Studies consistently find that women-led businesses receive less outside funding than businesses led by men. But did you know that if the number of female entrepreneurs grew to match the male rate of business ownership, the global economy could grow by 2%, or $1.5 trillion, estimates suggest (2). 500 says it’s the most active investor on the planet, they have 270 mentors who mentor founders and entrepreneurs to build sustainable ventures. They invest globally. Their latest initiative 500 Women brings capital to people who don’t have it- the women, to double down on strong women-led companies in the 500 portfolio, and to enable investors (women AND men) to co-invest in these companies. (3) Another one is BBG Ventures - they have a gating factor on who they invest in; the startup is supposed to have at least one female founder. They back women who are using technology to address common life-challenges and transform daily habits. (4) Backstage Capital invests in ventures led by underrepresented founders (5).
Networking and being taken seriously: Inc reports that 48% of female founders lack available advisers that limits their professional growth (6). 66% of women founders were asked prevention-oriented questions, which focused on safety, responsibility, security, and vigilance, while 67% of male founders were asked promotion-oriented questions that focused on hopes, achievements, advancement, and ideals. But, First Round, a VC focused on seed investment, shows that portfolio investments in startups with at least one woman founder performed 63% better than investments in exclusively male teams (7). One study found that female entrepreneurs in Malaysia, the Philippines and Thailand who tapped into formal support groups ran businesses that were 38% larger than those of women who didn’t use such resources. The trend holds true in richer nations, too. After Irish women participated in roundtable sessions, their businesses’ revenues, hiring and exports increased. (2) As women founders, we need to do more than just share leads with each other; and go further into detailing of what working with those leads entail- building business plans, making case studies, seeking counsel elsewhere- the works. This makes sure that women entrepreneurs aren’t help back due to isolation, lack of know- how, stress and family demands.
Self Doubt: The more that I think about this, the only answer that comes to my mind is – mentoring (Ok as Founder of Thrivewithmentoring I will admit I am biased). There’s a leaky pipeline to contend with. There is a large chasm between the number of women starting out to be entrepreneurs and how many advancing to running successful businesses of their own, and that itself contributes to self-doubt. But for women to get the right people in their corner, what’s an absolute necessity is group mentoring. Not a lot of women can afford the luxury of resources or time to go through with one on one mentoring, plus it’s very intense and might be intimidating too. Not only does the group learn from the Group Mentor but also from the peer network of women who are all starting out. NetSuite Inc is an American cloud computing company. They are championing changes that will support more roles for women in leadership at their company. As a part of this effort, they have created the Women in NetSuite (WIN) program with a mission to advance the professional development of women at NetSuite through recruitment, sponsorship, networking, education and advocacy. The percentage of women in manager positions at NetSuite rose from 29 percent in 2014 to 36 percent in the first half of 2015 as a result of both recruiting and promotion from within. Of the people that they’ve recruited to manager-level positions in the last 12 months, 32 percent have been women, compared with 29 percent 12 months prior.(9) Paypal, Pinterest, Lever- all are adding value to the group mentoring cohorts concept within organizations. Some are gender inclusive, and some focus exclusively on women. (10)
When it comes to mentoring, sharing gender related frustration is a part of the process but the group keeps each other invested in spite of everything else that’s going on and you delve deep. It’s like Jane Fonda says “It’s my women friends that keep starch in my spine and without them, I don’t know where I would be. We have to just hang together and help each other.” (8)
I have personally benefitted tremendously from have participating in various Female Founders’ facebook groups where women openly post issues, be those around bias that they may have recently faced or asking questions to get some help. And the best bit is the network effect, as a lot of Founder’s helping each other there.
Entrepreneurial innovation is a globally thriving sector; and both men and women get penalised if women founders aren’t given their due weight. The need of the hour is an ecosystem that supports women entrepreneurs inside and outside – so that they make the time and have the energy to work ‘in the business’ and ‘on the business’.