In the ever-evolving landscape of startups, have you ever encountered a startup community exclusively designed for men? The chances are slim. Yet, the concept of startup communities tailored exclusively for women entrepreneurs might still appear unusual or unnecessary.
But let’s delve into this further.
Why do we have startup communities focused on empowering women entrepreneurs? The answer is simpler than it may seem: the entrepreneurial journey is not a uniform experience for all.
Gender biases, restricted access to finance and technology, and the prevailing male-dominated venture capital landscape combine to create unique challenges for women entrepreneurs. For this reason, the creation of nurturing environments is pivotal in helping women navigate these challenges.
But we want to be clear about one thing — communities for female entrepreneurs are never a question of their capabilities as founders.
Embarking on a business venture is a formidable task, laden with numerous highs and lows. However, for women entrepreneurs, this journey is particularly arduous. A plethora of systemic barriers, significantly greater than those encountered by their male counterparts, stand in their way. This intricate web of challenges originates from deeply entrenched factors that perpetuate gender disparity.
Beyond stereotypes: Challenging perceptions of women-led businesses
Women entrepreneurs frequently embark on business ventures with a lens focused on creating an impact or contributing to societal betterment.
A recent study from the Global Entrepreneurship Monitor showcased a rise in the Total Early-stage Entrepreneurial Activity (TEA) rate for women in the US, increasing from 13.6 per cent in 2020 to 15.2 per cent. Remarkably, 70.5 per cent of surveyed women stated their entrepreneurship was motivated by a desire to effect positive change.
Also Read: #She27: Celebrating 27 women shaping the future of tech
Despite this, some investors might erroneously view these businesses as profit-secondary, emphasising social impact over financial gains. This misguided perception perpetuates the notion that such enterprises are akin to charities or more suited to philanthropic ventures or financing. This is a mistake.
Breaking the mold: Disrupting the male-dominated venture capital landscape
Despite progress made towards gender diversity, the venture capital arena remains predominantly male-dominated. In the UK and Europe, for instance, approximately 67 per cent of investors lack women in influential investment decision-making roles.
This lack of diversity directly impacts the opportunities extended to women entrepreneurs, and again, we believe a misunderstanding in the nature of some businesses. Why is this? Traditionally, investors invest in what they know or a defined area of expertise.
Following this line of reasoning, when women embark on creating new businesses in domains that lie beyond these customary realms of specialisation, they often struggle to find investors who understand their mission, the opportunity presented and the potential market.
This makes these businesses seem more ‘risky’ to potential investors. This glaring inequity necessitates inclusive practices and a level playing field. In Southeast Asia, only 1.2 per cent of total venture funding in the region went to female-only founding startups.
Tailoring financial support: Recognising gaps
Based on the challenges outlined above, we also believe that addressing the news of female founders can’t be solved nor should be solved in venture funding alone.
Also Read: How this introvert started a community of women investors in SEA
Personalised loan terms, adaptable repayment options, and financial education materials tailored to their specific circumstances might be necessary along with more public sector support, grants and programs to sit beside continuing education and attempting to attract more women to venture funding.
Furthermore, financial institutions might lack the expertise needed to develop products and services aligned with the distinct challenges and prospects faced by women entrepreneurs. These challenges could encompass varying risk profiles, divergent business life cycles, and unique trajectories of growth.
By deeply understanding and addressing these multifaceted challenges, supportive communities play a pivotal role in nurturing the growth and success of women entrepreneurs and serving as an interface between the public sector, venture capital and financial services. This is precisely the role we embrace at Harriet.
Serving as a dynamic and purposeful hub, our connectivity platform functions as a central meeting point, bringing together a diverse array of inspirational female founders. Through Harriet, our mission resonates in facilitating meaningful connections, fostering collaborations that empower women entrepreneurs, and sharing valuable information enabling them not only to survive but to thrive within the competitive funding landscape.
In conclusion, the need for supportive communities catering to women entrepreneurs arises from the distinct challenges they face in the entrepreneurial journey. By challenging stereotypes, disrupting male-dominated spheres, and providing tailored financial support, we can foster an inclusive environment where women entrepreneurs can flourish.
It’s high time to recognise their invaluable contributions and create a thriving ecosystem that benefits everyone.
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