Fact: women start businesses at about twice the rate men do.
That’s pretty awesome, right? But here’s another fact: more than 97 per cent of venture capital funding goes to companies led by men.
To do some quick maths, that means men are more than 194 times more likely to get money for their businesses than women.
That is unbelievable – and absolutely unacceptable.
It’s a problem that’s long been known to entrepreneurs. Eat My Lunch co-founder and CEO Lisa King says there are several challenges facing women entrepreneurs. “As a woman entrepreneur and a mum, finding the right balance between work and family is particularly challenging,” she explains. “Not only are you trying to start a business, but the role of running your family typically doesn’t change. The huge stretch on your time, energy and the guilt you feel for not being 100 per cent devoted to one or the other is constantly present. Ensuring you have a lot of support for both the business and family is important.”
Natalie Robinson, founder and CEO of Mum’s Garage, says much of the issue of lack of funding for women entrepreneurs comes down to the way women are treated in the business world. “Investors are looking to invest in companies that will give the biggest return,” she says. “Especially venture capital firms as that’s what they’re mandated to do by their own investors. Like every individual, investors are also conditioned to be biased towards a perceived pathway to success, which is based on reference experiences. If you look at the more successful startups in the world, most of them have been founded by a particular type of entrepreneur. So there are going to be biases towards a particular type of founder and a particular type of company until someone changes this perceived pathway to success.”
But there’s a way to fight this, Robinson says. “What we need is more investors who are prepared to back founders and companies that don’t fit the perceived success model,” she explains. “We need investors to fund companies based on the merits of the founders alone, without being influenced by the biases of social norms. Then when teams with women CEOs start to succeed at an equivalent or greater rate than teams with male CEOs, for example, the old beliefs will quickly change. “
Jane Kennelly, trustee and co-founder of the Fantail Network – which helps empower female entrepreneurs through networking, mentorship and other opportunities – says networking can be a tremendous advantage. “With men holding 80 per cent of the jobs in senior management and naturally networking together, [it’s] little wonder that the information flow regarding positions, opportunities, news and career opportunities are communicated within this group first,” she explains. With this being said, all the more reason to start encouraging young women to begin to emulate these networks so they start to plant themselves in the pathway of the information flow.
By developing a network that has high-level people, peers, cross industry contacts, is non-gender biased and includes people that are considered influencers, young women become part of the flow. This type of thinking doesn’t come naturally – it needs to be nurtured.”
Robinson says that in addition to having strong networks, it’s important that entrepreneurs are confident. “A number of studies have found that women are less confident than men, especially on topics they are not experts on.,” she says. “Confidence is a huge factor in building a successful business, because you’ve not only got to convince yourself that you’re going to make the idea work, you’ve got to convince potential co-founders, investors, customers and partners to get behind you.”
King offers yet more tips. “Think big – I think this is challenging for women in particular as they often don’t see their worth and are humble about their achievements or what they bring,” she says. “Whatever you think you can do, double it and then double it again. We achieved our three-year forecast in eight weeks – we didn’t think big enough!”
While it’s important to be confident, King says it’s also important not to be too overconfident to the point of not listening to advice. “Know your weaknesses and bring in support or experts to help you,” she says. “We engaged chef Michael Meredith very early on to bring in his cooking experience. There is always more than one way to do it – we combined the best of traditional charity and traditional business models to launch an innovative enterprise that solves a big social issue while still being commercially successful.”
And that’s not the end of her advice. “Having people (whether it’s your staff, board or shareholders) with the same values is key. It makes it very easy to have conversations about what the right thing to do is when you are all aligned.”
Robinson says that while we need to focus on areas to improve to be better positioned to get funding for business ideas, it’s also important to celebrate the successes of women entrepreneurs. “It would beneficial for women if there was more emphasis on celebrating the positive qualities and competitive advantages we have when it comes to building businesses,” she explains. “For example, women tend to be more empathetic than men. This is a significant advantage when it comes to starting a business because understanding the problems and emotional drivers of your customers is essential for building a great product.”
Kennelly says something similar. “It’s about celebrating being a woman, it’s about receiving equal respect, it’s about giving equal respect.”
Founded in Auckland with the goal of providing affordable, wholesome lunches made fresh daily and delivered directly to workplaces and schools, Eat My Lunch has since expanded to Hamilton and Wellington, making hundreds of thousands of lunches that help kids in low-decile schools – and all with a multi-week waiting list for volunteers willing to help. With such impressive growth, there can be little doubt that any entrepreneur looking to achieve success would do well to think about following King’s business advice. Especially this important ingredient in her recipe for success: “Learning to let things go and not worrying if it is 100 per cent perfect.”
Learn more about Eat My Lunch here.
Find out more about Mum’s Garage here.
More info about the Fantail Network here.