According to Startup Hungary’s report, only 16 % of startup founders are female. What do you think is the main reason?
I'm trying to pinpoint one challenge, but it appears to be twofold. The first is the bias present throughout the startup ecosystem. From personal experience, being in a startup and overlooked for a promotion because I didn't embody the typical leadership style—bold, loud, and assertive, which leans towards a traditional, masculine approach—highlights this bias. This issue isn't isolated; many women observe it, bolstered by numerous reports of workplace harassment. High-profile cases, such as those involving Uber, underscore this point, making the industry less appealing.
I know some women who question whether attempting to change the toxic culture at their companies is worth their effort. Furthermore, the journey to becoming a founder is daunting, especially for women. Looking at the EU, only 1% of all venture funding goes to female-led teams. I, too, dream of starting my own business, but the fear of needing to fight disproportionately harder for funding is palpable.
Additionally, there's a scarcity of mentors available to help usher more women into the startup ecosystem. But, to sum it up, the root issues are the pervasive bias and the intimidation of knowing I'll have to work several times harder to secure investment and make my business successful.
How have FEMA founders contributed to fostering diversity and inclusion within the startup ecosystem? There are notable success stories of innovators that highlight the impact. But the question also extends to how we can empower women and female founders to have the courage to become their own bosses or to start their own companies, while also ensuring inclusivity and diversity are integral parts of their ventures.
At Female Founders, our primary mission is to secure more funding for female-led and gender-diverse teams—a balanced mix of men and women. We've initiated a program called Gwow F, aimed specifically at assisting early-stage companies during the pre-seed and seed phases to secure their initial investment. Proudly, the alumni from this program have collectively raised over 45 million euros. This achievement underscores the impact of rallying a community committed to change. We collaborate with venture capitalists and investors who recognize the value and business case for investing in ventures led by women and gender-diverse teams, eager to support significant transformations.
What excites us is witnessing the power of networking. For founders, having a strong network is indispensable for everything from securing a warm introduction to an investor to seeking advice on sales strategies. At Female Founders, we foster this network, connecting founders to share experiences, match them with mentors for specific challenges, and thus fuel their success. This collaborative environment not only propels sales and marketing efforts but also builds a convincing business case for investors by demonstrating real financial progress.
And what about diversity and inclusion?
Yes, addressing bias is essentially the consulting arm of our business, recognizing that ultimately, investor participation is crucial. To tackle biases head-on, we engage in activities like bias training, where we teach people to identify and disrupt their biases in everyday situations. For instance, we might advise during a training session that more women should be encouraged to speak up in meetings or to avoid dominating discussions. However, when I mention bias disruptors, I'm referring to practical tools as well.
One such tool we advocate for is Equal Time, an AI-powered solution developed by a female founder. It allows companies to monitor their meetings, providing reports on who spoke the most, the types of words used, and suggestions for improvement. This kind of tool brings awareness to personal biases people may not realize they have. Our role is to educate on the variety of tools available that can effectively reduce bias.
What systemic challenges and biases have you observed or identified that disproportionately affect women entrepreneurs in the startup ecosystem, and how can these challenges be addressed at both the individual and systemic levels?
I see the landscape through three lenses: funding, unconscious bias, and lastly, the twin pillars of education and networks. In terms of funding, there's a noted emphasis on what I'd call prestige metrics—questions like, "Did this founder attend a particular business school? Have they previously launched successful companies?" These metrics often form one bucket of criteria investors consider. In parallel, there's the undeniable influence of networks. For instance, having an endorsement or investment from a well-known angel investor can dramatically shift other investors' perceptions, essentially signaling, "If this person has invested in them, their business must have merit."
However, it's crucial to recognize that for women, building such influential networks poses a greater challenge compared to their male counterparts, directly affecting their ability to secure introductions to potential investors or to gather the expert advice they might need.
When it comes to unconscious bias, it's a more insidious barrier. There's a natural human tendency to lean towards people who share similarities with oneself—maybe they look like you, talk like you, or even attended the same schools. This affinity bias makes it significantly easier to hand over your money to someone who reflects a familiar image back at you rather than someone who represents something entirely different.
So, in discussing bias, it's not just about identifying and mitigating it; it's about fundamentally altering who sits at the investor's table. We need a diverse array of individuals making investment decisions to ensure that a broad spectrum of perspectives is considered. This shift is essential for moving beyond the cycle of "like investing in like" and towards a more inclusive, varied, and vibrant startup ecosystem.
It's even more challenging for LGBTQ+ women or women of color, isn’t it? As a male leader, biases can come into play, leading to hesitation in investing in women due to factors like their educational background, gender, or assumptions about their future family plans. Additionally, intersectional factors such as race, ethnicity, and sexual orientation further compound the challenges these individuals face, making their situations even more difficult.
Indeed. You can observe these disparities reflected in the metrics as well. For instance, while I mentioned the figure was around one percent for female-led ventures, a closer breakdown by ethnicity reveals an even lower representation. Specifically, for African American founders, Asian founders, or any woman hailing from an underrepresented group, the latest statistic was a mere 0.7%. These numbers are stark indicators of the challenges faced. It's crucial to address the unique concerns of these diverse communities.
Thankfully, there are exceptional organizations dedicated to serving these specific groups, recognizing the distinct lived experiences and backgrounds that necessitate tailored support. This approach not only ensures better alignment but also equips entrepreneurs to engage with investors more effectively, understanding how to navigate conversations based on shared backgrounds and values.
Regarding Generation Z, they are increasingly becoming a significant presence in the workforce, entering the age where employment and entrepreneurship become pertinent considerations. When we examine this generation, we notice a marked difference in their attitudes and behaviors compared to previous cohorts. They exhibit greater openness, confidence, and resilience, and prioritize mental health and personal well-being. They approach work with a distinct mindset, valuing "me time" and maintaining a healthier work-life balance. How do they change the game?
This shift in attitudes undoubtedly impacts the landscape, particularly for women in Generation Z. Despite stereotypes labeling them as lazy or lacking ambition, empirical data suggests otherwise. A recent report examining specific age demographics reveals a notable uptick in female founders within Gen Z. This trend is encouraging, indicating a willingness among younger women to embrace risk and pursue entrepreneurial endeavors.
Platforms like TikTok have played a role in disseminating information, including tips on salary negotiation, empowering individuals to advocate for themselves. Drawing from my own experiences managing Gen Z individuals, I've observed a significant increase in requests for promotions and salary adjustments compared to earlier in my career. This assertiveness is commendable, reflecting a generation unafraid to demand fairness, equality, and recognition for their contributions.
As the influence of Gen Z grows, so too will their impact on organizational norms and practices. While some companies may view diversity, equity, and inclusion initiatives as mere compliance measures, the demands of this generation are poised to drive meaningful change. Their insistence on authentic DEI efforts and fair compensation will compel organizations to adapt or risk becoming obsolete in the eyes of future talent. This paradigm shift towards greater equality and inclusion is a welcome development, heralding a more progressive and equitable future for all.
Access to capital remains a significant issue for many female founders. How can we work towards creating more equitable funding opportunities and investment networks that support women-led startups and reduce gender-based disparities in startup financing?
Yes, many investment funds have implemented metrics to increase the number of deals from underrepresented groups, aiming to diversify investment opportunities. Some funds also require their team members to mentor female founders and other underrepresented groups, providing valuable guidance and networking opportunities. This proactive approach helps address the networking gap, which often determines access to funding in the investment ecosystem.
By setting specific targets within funds, each team member is encouraged to engage with diverse communities, expanding the reach of investment networks. Platforms like Founderland in Berlin play a crucial role in connecting investors with different communities and facilitating collaboration. Active participation in these networks allows investors to broaden their perspectives and contribute their expertise to underrepresented groups.
However, it's essential to ensure that these efforts are not only inclusive but also measurable. Clear metrics and incentives encourage investment teams to actively support diverse communities, promoting accountability and tangible progress. Without such measures, diversity and inclusion initiatives may lack direction and impact.
Mentorship and networking play pivotal roles in startup success. How can organizations like Female Founders help bridge the networking gap and provide mentorship opportunities specifically tailored to address the unique needs and challenges faced by women in the startup world?
Yes, I place a great deal of importance on mentorship. Without my mentor, I likely wouldn't have reached a leadership position. In our community, we focus on pairing founders with seasoned individuals who have navigated similar paths. It's reassuring to connect with someone who understands the challenges firsthand and can offer advice based on experience. Mentoring not only fosters confidence in one's leadership style but also provides invaluable knowledge. Learning from others' mistakes helps steer clear of potential pitfalls. Moreover, having someone to turn to during tough times can offer a fresh perspective and prevent rash decisions. Mentorship is indispensable, particularly for female founders. I've witnessed its impact firsthand, with numerous women benefiting from mentoring programs and advancing in their careers as a result. Several organizations in Austria are actively promoting mentorship for women, recognizing its power to cultivate stronger leaders and drive professional growth. Mentorship isn't just beneficial for founders; it's essential for everyone seeking personal and professional development.
And what if a company wants to have their own mentoring program for the women who are working for the company?
Yeah, I believe it's also advantageous. It boils down to the program's objectives. I've seen instances where mentoring initiatives failed to gain traction. The first step in launching a successful mentoring program is clarifying its intended outcomes. Do you aim to bolster confidence or develop specific skills? Once defined, you can determine the program's scope: internal, with senior leaders mentoring junior staff, or external, involving mentors from other organizations. Some companies collaborate with external mentoring programs to provide diverse perspectives. This approach broadens participants' horizons, offering insights beyond the company's confines. For organizations considering a mentoring program, start by defining your objectives and desired outcomes. Should it remain internal or engage external mentors? Aligning these choices with your goals ensures the program's effectiveness.
Research has shown that women are underrepresented in technical and leadership roles within startups. What strategies can be employed to encourage more women to advance their careers? Since we haven't delved into the startup ecosystem yet, let's emphasize it further. How does it operate, and what steps can we take to challenge the startup ecosystem?
I think the biggest thing, I mean we talked a lot about bias, but I think that also links to culture. With a lot of companies, especially startups, when they're male-dominated, even seemingly innocuous activities like having pub nights after work can be exclusionary for people with families or those who don't drink. So, the biggest thing is also culture because often in small startups where there's more interaction among team members, trust becomes paramount. When it's time for promotions or new senior roles, they tend to favor those they trust. So, another significant but often unspoken aspect is ensuring a positive culture from the start. This means addressing inappropriate behavior early on, as ignoring it may lead to larger issues down the line, such as scandals or high turnover rates. For instance, if your retention rate is less than a year, it's a clear indicator of a culture problem. Therefore, for retaining women and improving overall retention, it's crucial to consider and foster an inclusive culture. This involves inclusive team events, avoiding scheduling activities after work, and respecting everyone's working hours. These steps can greatly contribute to creating a more welcoming and supportive environment for all team members.
As you talk, there's one certain thing that always pops into my mind, and maybe I see it as radical, but when we discuss financial issues, the ecosystem, and how companies operate, including leadership dynamics, it's apparent that there's still a prevalent need to dismantle the "boys' club" mentality. That's how I perceive it, at least.
Yes, but I think it's also about considering the entire topic of DEI. While it does involve dismantling the boys' club, it's crucial to involve current leadership in driving this change. If we approach the issue by advocating for the elimination of the boys' club, it's unlikely to gain their support. Therefore, education plays a significant role here. We need to highlight the various ways biases manifest so that they can understand why it's necessary. Often, individuals may not perceive a problem simply because they're not aware of it. By raising awareness of biases within the organization, we can address them more effectively. It's essential to acknowledge that we all harbor biases, often unconsciously. Therefore, education becomes vital in getting everyone on board. Our aim isn't to exclude men from leadership positions but to ensure equal opportunities for all who aspire to lead. Some may prefer to focus on becoming experts rather than leaders, and that's perfectly acceptable. The key is to provide opportunities for skill development and leadership access to all who seek them. So while the focus may be on dismantling the boys' club to some extent, it's equally important to involve those in leadership positions in finding solutions.
