Why are Women Funded Less than Men?: a crowdsourced conversation

The Unequal Landscape The financial industry was created by men and it has been revealed over the last few years that they didn't do such a great job with that. Women still are not generally paid as high as men. Despite growth the average revenues of the majority of women owned businesses were still only 27% of the average of majority men-owned businesses. Why are Women Funded Less than Men?: a crowdsourced conversation by Pemo Theodore Media Producert & Startup Coach Women Owned Firms The statistics for women entrepreneurs achieving funding are very low: 3 to 5% get venture funded, less than 10% even if you expand that to include the entire team & any of the co founders. Around 16% women achieve Angel Capital http://www.illuminate.com/whitepaper/Data . Data shows that the percentage of dollars going into women led companies have actually declined by about 30% over the last 10 years. Is there a bias at work in the culture that keeps women disadvantaged as regards finance? Or are women themselves holding the key to financial empowerment but just haven't fully unleashed their power? My Story I spent 5 years in London trying to raise funding for my online matchmaking business & in the end had to admit failure. Very early on in that journey I had committed to help women source venture when I was successful. As it turned out I have been doing just that for the last 2 years, not because I was successful but because I failed. I have been video interviewing venture capitalists, angel investors & women founders on the shortfall in funding for women. My goal has been to listen to as many people as I could from both sides of the table, so I could hopefully determine where all these conversations intersected. Behind every great success lies a failure Issues for Women Are we slow to adapt to male dominated industries? Are we aggressive enough? Do we listen to others too much? Can we ask for what we want? At this point in the project, I am thinking that women themselves have been slow to adapt to a very male dominated tech & venture capital industry. But there are some very good & valid reasons why that would be the case. Julia Hu, CoFounder Lark Generally this reflects the very difference in women compared to men, both physically & psychologically. Physically most women tend to be receptive & that also can extend to our psychology. Listening is often highly developed in women, asking for what they want, not so. “Remember, Ginger Rogers did everything Fred Astaire did, but she did it backwards and in high heels.” Faith Whittlesey Vivek Wadhwa, Senior Research Associate Harvard Law School Are we risk averse? Many people that I interviewed suggested that also women can be less risk tolerant than men. Risk always implies the possibility of failure. Susan Coelius Keplinger, CoFounder Triggit Women may take risk more seriously than men, it may feel more like a life & death challenge. If women are not exposed or interested in sports when they are young, the question remains are there other ways to support them in being willing to sustain risk & failure & at times to even enjoy the thrill. We need to encourage the competitive urge without damaging women’s receptivity to others. Team sports, rather than individual sports? Tim Draper, Managing Director, Draper Fisher Jurvetson “Someone asked me why women don't gamble as much as men do, and I gave the commonsensical reply that we don't have as much money. That was a true and incomplete answer. In fact, women's total instinct for gambling is satisfied by marriage.” Gloria Steinhem Pros & Cons Trained to care for others Only gender that can have babies & breastfeed Great to work for because we care Can subvert ego Everything conspires to leave us feeling insecure We are equipped physically, trained & encouraged to look after & care for others & raise families. Admittedly women are slowly being released from these duties & responsibilities & many are demanding equal rights with their partners. But to date there are still no men that I know of, who can birth & breast feed a newborn. Many venture capitalists I have interviewed acknowledged that women are great to work for, because they try to look after everyone. Tim Draper, Managing Director, Draper Fisher Jurvetson Unfortunately one of the main criteria that most VCs have said that they look for in entrepreneurs is confidence & that is usually the result of at the very least a healthy ego & at the very worst, a very inflated ego. Cindy Gallop, Founder IfWeRanTheWorld Self Awareness Cost or Benefit? Women look within, whilst men look without & energized when rejected Too much self analysis can undermine The self awareness that results from listening both to others & self can also result in setbacks in confidence. Fred Destin, Partner Atlas Venture Robin Wolaner, author of ‘Naked in the Boardroom’ “When I wake up in the morning, I feel just like any other insecure 24-year-old girl. Then I say, ‘Bitch, you’re Lady Gaga, you get up and walk the walk today.‘” Lady Gaga Testosterone Builds up bone & muscle mass Maybe it’s hormonal? Possibly builds psychological thick skin? Estrogen Supports female body for fertility & caring for babies May also support feminine intuition & sensitivity? Should we Play like the Boys? If we play someone else’s game how can we be authentic? Although some people suggested that we may have to play more like men, I don’t believe that that is the solution because immediately we are then disingenuous & not ourselves. How can we be passionate & confident if we are playing someone else’s game? Jane Wurwand, Founder of FITE & Dermalogica Asking for Money Do we think too small? Are we afraid of money? If others depend on us does it increase our drive & ambition for money? Another big issue is that women don’t like to ask for money & this many have mentioned. Of course this is a huge problem if you are an entrepreneur & you must pitch for funding. You definitely have to become comfortable with asking for money! There seems to be something deeply ingrained in us as women that we should do what we can with what we have. Whereas many men have big dreams, we may tend to ‘think too small’ as a female entrepreneur friend says about herself. This may stem hormonally from our primary focus on the immediate people in our care or responsibility. Historically big picture thinking & exploring may have just been the domain of the male hunters. I know if I am suffering any financial pressures I tend to instinctively think about how to cut back rather than identify how to bring in more revenue. I read with interest Susan Wilson's post ‘Are Girls Afraid of Money’ on CNN Money http://postcards.blogs.fortune.cnn.com/2011/04/18/are-girls-afraid-of-money/ in which she described placing $20 bills on random desks in a classroom at Georgetown University. The female students who walked into the room ignored the money and wouldn't sit anywhere near it. Tereza Nemessanyi, Founder of HonestlyNow said that it increased her desire to raise investment funding once she had a team for her startup. Their need & her heightened sense of wanting to provide for them increased her confidence & drive to raise funding to provide for her startup’s needs. Work/Life Balance Working 24x7 leaves no room for personal life Can women change startup culture to incorporate more work/life balance? Women need to pull each other up “Some women choose to follow men, and some women choose to follow their dreams. If you’re wondering which way to go, remember that your career will never wake up and tell you that it doesn’t love you anymore.” Lady Gaga Then there is the challenge of the intensity & crazy lack of balance in startup culture that is not appealing to many women who value their family & personal lives. Adeo Ressi, TheFunded Of course this means that women’s organizations & networks, along with individual female entrepreneurs need to develop their own version of startup culture. Vivek Wadhwa, Senior Research Associate Harvard Law School One woman’s success is success for all of us as then our numbers are increased & the playing field becomes closer to equal! Sexual Tension How do investors & women deal with sexual tension & chemistry? How can female entrepreneurs balance their desires to be attractive with being powerful in their startup & the world? Dave McClure, 500 Startups Sexual Chemistry Chemistry is the basis for any creative project between people & does not need to be ignored, acted upon or literalised Sexual chemistry comes from our passion & can be channeled into the startup! Prerna Gupta, CEO khu.sh When chemistry happens between people who are looking to work together, it can easily be mistaken for sexual chemistry because it comes from the same place in us, our passion! Rather than pretending this important part of the creative process doesn’t exist or misinterpreting it by fearing it, literalizing & acting out sexual innuendo or relationship, investors & women entrepreneurs need to respect & honor this chemistry so that they can work together successfully. Investors need to take this risk along with the financial risk, just as Dave does & know that this is fertile energy to harness & work with a female entrepreneur & do great things. And female entrepreneurs should not be afraid of the power of this chemistry & its transformative affect on them & their business. Solutions Like Homeopathy the solutions lie within the problems Like homeopathy the antidotes to these issues are provided within the challenges themselves. First however we need to be aware of the issues which can give us the option to change. Women can then beef up their weaknesses & leverage their strengths in raising funding for their startups. Everyone that I have interviewed to date all agree that women can learn the necessary skills to raise funding successfully & to run successful startups. Why Invest in Women? So really nothing is holding us back, except ourselves & our desire to change the world one startup after another. Conclusion Randy Komisar, Partner Kleiner Perkins