The underrepresentation of female founders in the startup world is a well-documented issue, with studies consistently showing that women receive less funding from angel and venture capital investors than men. This lack of funding not only impacts the growth and success of these businesses, but also perpetuates the gender imbalance in the entrepreneurial ecosystem.
In this blog post, I will suggest ways to increase the number of female founders receiving funding in the short, medium, and long term.
Short-term solutions:
- Increase awareness and education about the issue: Many investors may not realize the extent of the problem and may not be aware of the bias and discrimination that female founders face. By raising awareness and educating investors about the issue, we can encourage them to be more conscious of their own biases and to actively seek out and invest in female-led startups.
- Increase the number of female investors: Studies have shown that having more women in decision-making roles leads to more funding for female-led startups. By encouraging more women to become angel investors and venture capitalists, we can ensure that there are more female voices in the room when funding decisions are made.
- Increase the number of female-focused accelerator programs: Accelerator programs provide mentorship, resources, and networking opportunities for startups, and can be especially beneficial for female founders who may not have as much access to these resources. By increasing the number of female-focused accelerator programs, we can provide more support for female founders and increase their chances of success.
Medium-term solutions:
- Increase the number of female-led startups: By providing more resources and support for female entrepreneurs, we can encourage more women to start their own businesses. This will not only increase the pool of female-led startups seeking funding, but it will also help to create a more diverse and inclusive entrepreneurial ecosystem.
- Increase the visibility of successful female-led startups: By highlighting the success stories of female-led startups, we can show investors that these businesses can be just as successful as their male-led counterparts. This will help to change the perception that female-led startups are risky investments and encourage more investors to invest in these businesses.
- Implement unconscious bias training for investors: Unconscious bias can play a big role in the funding process, with investors often unconsciously favoring male-led startups over female-led ones. By providing investors with unconscious bias training, we can help them to recognize and overcome their biases and make more objective funding decisions.
Long-term solutions:
- Address the root cause of the problem: The underrepresentation of female founders in the startup world is a symptom of a larger problem, which is the lack of gender equality in the broader society. By addressing the root causes of this problem, such as the gender pay gap and the lack of women in leadership roles, we can create a more equitable society where women have the same opportunities as men to start their own businesses.
- Encourage more girls to pursue careers in STEM: By encouraging more girls to pursue careers in STEM (science, technology, engineering, and math), we can increase the pool of female entrepreneurs with the skills and knowledge necessary to start and run successful tech startups.
- Create a culture of inclusivity and diversity: To truly change the startup ecosystem, we need to create a culture of inclusivity and diversity where female founders are welcomed and supported. This can be achieved through initiatives such as diversity and inclusion training, and by creating a supportive network of female entrepreneurs who can mentor and guide each other.
Conclusion:
Increasing the number of female founders receiving funding from angel and venture capital investors is a complex problem that requires a multi-faceted approach. One thing I have decided to do, and it is a very small thing, is from now on only to make any new investments in businesses that are either entirely female founded, or are majority female owned. At least in a small way I can do my bit to reverse the current situation.