In 2016, two female founders were struggling to secure VC funding in Silicon Valley. They couldn’t secure meetings with VCs and people weren’t really responding to them. And when they did get meetings, it seemed like they weren’t being taken seriously. So, the two female founders created a third fictitious male co-founder, using that signature on emails to investors. Suddenly, the male co-founder who didn’t exist was getting faster responses and more meetings than the female co-founders who did exist.
In 2016, two female founders were struggling to secure VC funding in Silicon Valley. They couldn’t secure meetings with VCs and people weren’t really responding to them. And when they did get meetings, it seemed like they weren’t being taken seriously. So, the two female founders created a third fictitious male co-founder, using that signature on emails to investors. Suddenly, the male co-founder who didn’t exist was getting faster responses and more meetings than the female co-founders who did exist.
In an early episode of Shark Tank India, a husband-wife team was pitching their business and they rejected a deal offered by a Shark. After the episode ended, the husband seemed to receive praise for his negotiating skills and smile, while the wife remarked that people started calling her rude, smug, manipulative and greedy and claimed that she even received hate messages.
Female startup founders, do you feel like there are systemic biases in the startup ecosystem and you’re judged for your gender and not your competence? It may be so, even in a world that seems to pride itself on being disruptive and forward-thinking.
The road to entrepreneurship can be gruelling, especially when founders need to have a singular focus on innovation and being bold, but sometimes, the obstacles in the way may not just be about the business. Sometimes, there may be some more subtle yet pervasive challenges lurking in the shadows. And this is something that may be disproportionately affecting about half the world’s population.
And the statistics seem to reflect this disparity. India has about 140 unicorns and over 30 of them are said to have female founders. In 2021, which is considered the year of exuberance for funding, just 0.3% of India’s VC funding went to women-led startups, according to DealStreetAsia. There’s a MasterCard Index of Women Entrepreneurs to determine how women in business are doing. In 2021, India ranked 57 out of 65 on that index. According to a 2022 Bharatiya Yuva Shakti Trust survey, over 85% of women entrepreneurs faced challenges in availing of loan services from PSBs.
There’s also a 2018 study published in the Academy of Management Journal revealed that investors may be more likely to ask men questions related to achievements and ambitions, which would have more positive responses and funding, while women may be asked more questions based on losses, safety and potential risks. The trend has continued for a while. This columnist had written earlier about the fundamental need for more women in the startup-venture industry. Greater diversity yields higher returns. Startups with a female founder generated 78 cents of revenue for every $1 of funding, while male-founded startups generated 31 cents, according to a Boston Consulting Group study of 350 startups.
There have even been stories of women leaders going to meetings and people not looking them in the eye or shaking their hands. One harrowing story outlines a female professional, who is now the head of an investment banking firm, being asked to iron the trousers of a male colleague in her earlier days. And there may even be an Imposter Syndrome prevalent among female entrepreneurs and leaders, which could stem from being born to perfectionist mums, who want to do everything perfectly. So, even if a little bit goes wrong, a woman may think they’re not cut out for the job. Even when a woman entrepreneur or leader bears children, society may judge her as a caregiver first. So, women, who may have great ideas and determination may encounter barriers that may be invisible.
And while these may be valid and pressing issues, at the same time, could it be that women may be biased against themselves?
Lathika Pai, country head, Venture Capital and Private Equity Partnerships at Microsoft, remarks, “Why were there not enough women founders who were getting funded? It wasn’t because of the VC bias as much as the diffidence that women founders had in themselves… So, for instance, at an event, I’ve got a male co-founder and a female co-founder. Both were phenomenally qualified. The male co-founder would speak and the female co-founder stay silent. So, I had to coach her and say, ‘You are equally qualified. Why are you being diffident?’ The point is: We have to, first, help ourselves before we point to investors and say that they’re not investing in us”.
Still, one should be cautiously optimistic about the progress of women entrepreneurs. About 20% of Indian women are MSME owners and contribute to close to 25% of the labour force, according to the India Brand Equity Foundation. It’s said that women entrepreneurs provide direct employment to about 25 million people, according to Bain & Co. And Indian businesses can further add $700 billion to the global GDP by increasing women’s participation in the labour force.
However, the tide is turning. According to a WISER report, women-led startups in India rose to claim a significant 18% share of the market in 2022 from just 10% in 2017. And as per 2023 DPIIT data, the number of women startups in the top 3 D2C sectors was said to have seen a growth of more than 2700% from 2017 to 2023.
Mauro F Guillén, the William H Wurster professor of multinational management at the Wharton School, more than half of the world’s wealth will be owned by women by 2030. And as more and more women become entrepreneurs, half of all new business ventures worldwide will be launched by women by the same year, he says.
So, what must female founders and aspiring female entrepreneurs keep in mind?
Pai states, “First, believe in your business plan. If you don’t and if you are hesitant about your business plan, how can you convince the investor to invest in you? You have to be extremely confident about what your business plan is and whether you’re able to grow it. Investors are responsible for creating returns for their partners, so it’s important for them to know that the founder that they’re speaking to is confident of giving that return. The success rate for startups is between 1% to 5%. in terms of getting the scale you want. There are very successful founders who haven’t raised money and it may not be important to raise money, but if you are going and sitting in front of an investor, you have to be confident about the business you’re building, that you’re in there for the long run and that you have the agility and confidence in terms of riding all the ups and downs. Be very clear about who your competition is and what you can and cannot do”.
Women entrepreneurs need to be kinder to themselves, push themselves harder, have confidence, show resilience and they are sure to emerge victorious. A lot of women entrepreneurs and founders may worry that they may not be able to pull it off, but that worry can only be mitigated by experience.
So, here’s to a more inclusive, innovative and equitable future in entrepreneurship. The road ahead may be long and the challenges may be daunting, but the potential for transformation might be profound.
“Go out there and own your business”, quips Pai.
Shrija Agrawal is a business journalist who has covered startups and private capital markets before it was considered cool in India.
The views expressed are personal
