What We Learned About Female Founders — And Why Time Has Come For The Tech Industry To Shift
The Tech industry loves to use (and abuse) the word “disruption”.
New technologies bring amazing solutions and ideas which radically change our way of living, working and even dating :) But there is one area where things are even worse than in traditional industry: diversity.
One can think that the reason why female founders struggle to raise money is their lack of technical background but data shows that it can not be the only reason: Atomico’s report The State of European tech 2018 revealed that only 1 female CTO out of 175 CTOs raised a series A or B in 2018.
The invisible growth force
Yet startups co-founded by women are performing 63% better than all-male founded teams, according to the early-stage VC fund First Round. A recent study from BCG shows that ROI is 12% higher for Gender-mixed startups than others: for every dollar of funding, gender-mixed startups generate 78 cents while 100% male-founded startups generate only 31 cents. Moreover, Capital firms that increased their proportion of female partner hire by 10%… had 9,7% more profitable exits!
Most Investors are not aware of these figures and thus miss opportunities that the male-centered investment ecosystem is unprepared to understand.
Why is Tech so Lousy with Women?
Tech industry was created in Silicon Valley on a strong bro culture with a single profile: white young boy graduated from one of the elite schools. Over the years, the tech boy’s club developed a non-inclusive culture, with their own circle of recommendations, backing friends of friends.
Emily Chan, author of Brotopia : “The tech industry doesn’t simply tolerate gender discrimination, it’s hardwired to marginalize women”.
Sexism is one of the biggest issue revealed by the #MeToo movement in 2017: Uber, 500startup…were charged for sexual harassment. This leads to innovative tech solutions to fight again this scourge, like the non-profit Callisto, funded by YC .
One year later, can we say that things have changed? Not really: Atomico’s report states that 46% of women have faced discrimination while working in European Tech. And First Round state of startups 2018 revealed that 59,9% of the respondents have experienced or know somebody who has experienced sexual harassment in the workplace.
It’s time to be #50inTech
Women of the tech ecosystem are organizing themselves. First, in the VC world, All Raise a non-profit organization was founded in April 18 by 34 senior female investors, dedicated to diversity in funders & founders. Another sign of change, gender lens funds grew up from 58 to 87 from 2017 to 2018!
A huge trend is growing in the US with the creation of a trustworthy networking place for women entrepreneurs and women in Tech. You may have heard about Girl boss collective, Bumble Bizz, Hello Alice or Elpha…
At 50inTech, our goal is to increase the number of women in tech up to 50%, because we truly believe that women can change the face of the economy and that they are a huge reservoir of growth.
50inTech is willing to make a contribution to the cause first in the EMEA region. How? By building a platform-as-a-service (Paas) to uncover, promote and interconnect women in the Tech industry. To crack the code, we want to build a women-centered solution, that engages the entire ecosystem including men allies.
To learn about the deep needs of both female founders and ecosystem players, we launched in November 2018 a global campaign “Time to be 50inTech” with a survey. We recruited over 50 ambassadors (women and men). Personalities like Cindy Gallop, Geraldine LeMeur, Suki Fuller, Brian Solis, or Céline Lazorthes supported us and helped us reach a great number of respondents all over the world.
It was a huge success! In less than 2 months we collected a large amount of data from as much as 450 respondents including 60% female entrepreneurs. A majority of them being based in Europe, but they also came from North America, Africa and Middle East, and Asia…
And this is what we found out 👇
1. At 80%, female founders are business focused
In our study, we unveiled the fact that female founders were really business oriented. Their number one priority is to develop their business (80%). Raising funds comes after (53%) maybe because they indeed are less funded.. And finally, they are looking for quick actionable advice and mentoring.
2. Fundraising: their biggest challenge
Not surprisingly, raising funds is the biggest challenge for female founders. Convincing clients (corporate especially) and recruiting tech talents come just after and before finding co-founders.
3. Networking is highly requested by female entrepreneurs
Our study revealed that they want to network. Who with? Mainly with women in tech, entrepreneurs and investors.
The study also shows that everyone is committed to closing the gender gap. The respondents are ready to take actions such as attending events, sharing their experience, and participating in AMA online sessions to help it happen.
Only 37% of female founders want to be interconnected with accelerators and incubators. Even though more than 50% of them never got support from an accelerator or incubator.
But, with such a male-centered accelerator’s model is it a surprise? Laetitia Chabannes, program manager at the camp accelerator in Aix-en-Provence (France) shared: “ It’s really difficult for us to attract female founders and receive applications. We launched a thinking process with our team to try to understand why this is happening… Many female entrepreneurs told me that they were not able to leave home and stay away from their families for as long as 3 months. Male founders don’t react the same way. We have received plenty of applications of founders who recently became Dads and that was not an issue. We are now thinking about creating new programs that would be shorter and could be combined with online sessions”.
4. Good news: the ecosystem is willing to diversify the deal flow but… people are looking in the wrong place
We asked investors, corporates, accelerators, and incubators if they would like to receive more applications from female founders: at 73% they said YES! As we speak, female founders applicants are hard to find. Why? Because startups are mainly sourced from social networks, recommendations, and conferences. This is clearly not where they stand and it confirms the need for a qualified pipeline of promising women-led startups: this is 50intech’s ambition.
Investors, you have unconscious biases that make you miss huge opportunities
A very interesting study published by Dana Kanze at Columbia University shows that the reason why female founders receive less funding is that the questions they are asked by investors during their interviews are different from the one male founders get. Male entrepreneurs get 67% promotion oriented questions, meaning focusing on potential gains, hopes, achievements…. women entrepreneurs are asked for 66% prevention-oriented questions. In other words, they focus on potential losses, safety, vigilance… Entrepreneurs who were asked promotion questions received 7 times as much funding as those who were asked prevention questions. That's is probably why female founders receive on average only 25% of the applied amount versus 50% for male founders.
Gender biases are also highlighted by this study from Harvard Business Review, about Swedish public VC. Despite being a champion country of gender-equality: they label male entrepreneurs and female entrepreneurs differently. For a similar characteristic such as age, a male entrepreneur will be described as “young and promising” whereas a female entrepreneur will be described as “young but inexperienced”. This is just one example but it’s very typical!
Design thinking is at the heart of the 50inTech project
This is why we organized collaborative meetups to co-design the platform with future users.
The first meetup took place in Paris on January 21st 2019. It was hosted by Roland Berger. We organized workshops with female founders, corporates, incubators and accelerators, startups experts, investors… 7 concrete ideas about how to do more business and raise funds emerged from the design thinking groups.
About getting support to raise funds, groups suggested :
- a matching platform to connect investors with female founders, taking into account the field or industry, the amount raised and past record of these investors.
- decoding fundraising with a smart learning experience adjusted to the stage of advancement.
- training sessions to learn about investor’s gender bias and how to respond to them
To increase business with the help of the community:
- online mentoring to prepare for client interviews, with a matching algorithm between entrepreneurs and business leaders.
- Co-development groups and AMA sessions
- A gamified system to exchange contacts and earn points.
For the international community, we broadcasted a virtual meetup Jan 24. live from StationF, the biggest and most diverse startup campus in the world!
All these suggestions from the meetups inspired us, and we are now ready to take action and build the platform.
We have an amazing team ready to succeed. For the development of the platform, we set up an intrapreneurship program with Beezen, an IT consulting firm established in France, Morocco and Tunisia, that employees 47% of women in tech and 100% of female managers.
So 50inTech will be 100% inclusive!
We are planning to organize meetups in European tech cities to iterate and test our solution and plan to be ready to release our beta version at VivaTechnology (16–18 of May 2019).
Let’s “disrupt” the Tech ecosystem together 💪🏽!
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