The gender gap in the technology sector has been widening steadily across the world. With only 10 per cent of investor funding going to women-led ventures, statistics suggest that the funding odds are stacked against female founders. It’s no surprise that fewer than 15 per cent of European start-ups are founded by women entrepreneurs. Consider this: VC-backed women-led tech firms bring in 12 percent higher revenue than male-owned tech companies. And their ROI is a whopping 35 percent higher. It’s estimated that in the UK alone, if every single woman who wanted to start her own business had the support to make that possible, it would immediately produce 340,000 new businesses and support 425,000 new jobs
A new survey ‘FoundHER Female Founders’ by AllBright published earlier this week found that one in five female tech founders are not being heard by male investors. It also found that access to capital remains the largest challenge facing women in business today.
According to Louise Doherty, founder of tech start-up PlanSnap, these new findings are just the tip of the iceberg. Having recently graduated from the top business accelerator, Techstars, in Feb 2017, Doherty is currently raising capital for PlanSnap, and is feeling those growing pains.
“Raising investment is one of the hardest things any entrepreneur has to do, but for women the bar is even higher. Investors unconsciously tend to back companies solving problems they understand or led by people who look, speak and act like them, and most investors are white, male and over 45. That’s before you even consider more overt sexism which many women entrepreneurs experience,” she says.
Doherty founded her second business, PlanSnap, after getting fed up of making all the social plans for her friends group. Her love of sports, eating out, travel, new experiences and adventures combined with her experience working for the BBC, ASOS and YO! Sushi – where she saw the huge trend towards ‘experiences, not things’ in marketing – led her to start PlanSnap in 2016.
She chose the crowdfunding route to finance PlanSnap because she believes it’s a more transparent and fair way to raise funding. “It means we don’t have to navigate outdated rules of fundraising. Anyone who believes there must be a faster way to make plans with friends can invest in us directly, making it a much more democratic way of raising capital,” she adds.
“Women also have a 75 per cent success rate for crowdfunding compared to 55 per cent for men. We’re in the middle of our investment round now but we raised £100,000 in our first 48 hours and are fast approaching 80 per cent of our target.”
Looking at Crowdcube, investors on the equity crowdfunding platform historically fund women. In the last quarter alone, female founders have successfully raised nearly £6 million for their businesses.
AllBright is an equity crowdfunding platform as well, specifically focused on female-led businesses seeking funding. One of the highlights of the study commissioned by the platform is the affect on the confidence of female founders at tailored networking events. The research also shows that women hold their networks in high regard and provide great value, with 65 per cent of women stating that they feel most confident when meeting like-minded people in this fashion.
The research reveals that women are required to display ‘pro-social’ behaviour, in addition to confidence, to obtain leadership positions in business, explaining the added pressure and barriers to female entrepreneurship. In contrast, the research found that men need only display self-confidence to achieve success.
Working with colleagues from IE Business School and INSEAD, Guillén studied 236 engineers from a multinational software development company, of which 22 per cent were women, and assessed how self-confident each was perceived to be by their supervisors.
The results showed that there was no difference between genders in terms of the extent to which high performing men and women were seen as confident by upper management, but that women were not rewarded equally for their self-confidence.
In order to be rewarded equally, women had to also display ‘pro-social’ behaviour – or in other words, show that they care about others and take others’ interests at heart, whether that be through making connections within teams or the wider community.
“There are a number of studies that have shown that when women display behaviours consistent with being ambitious, it affects them negatively. In other words, they are not liked. Our research shows that women currently need to show pro-social orientation to counterbalance this negative effect – something men do not need to do to get ahead,” Guillén says.
“People want to work in a friendly environment. They want their workplace to be diverse. But in order to create this environment companies need to think carefully about whether being pro-social is a job requirement and then treat women and men equally accordingly. Making sure this happens should not be solely women’s responsibility – organisations need to take concrete steps to promote it actively.”