Entrepreneurs are expected to be white and male. We need to change this
Women who want to grow their businesses quickly are facing an uphill battle. They’re just not what investors expect. Dr Patti Fletcher explains how to beat expectations.
Being a high-growth entrepreneur is not for the faint hearted. A recent whitepaper published by Astia describes the world of high-growth entrepreneurship as “a world of outliers.” I couldn’t agree more: it takes a special breed of person to be an entrepreneur and not everyone can do it.
The startup world has evolved into a messy and complex ecosystem where one’s gender is just as important (if not more) than any entrepreneurial traits a person may possess. Male-founded start-ups account for over 90% of venture capital funding! I think that deserves an exclamation mark.
Make no mistake; if you are female company founder, the deck is stacked against you. The focus on increasing gender diversity in investor-funded startups has gathered momentum recently, but it remains more of a philanthropic women’s issue than an economic imperative.
“My business partner and I have been on the receiving end of bias from investors on more than one occasion,” says Janekke Niessen, CIO and co-founder at Improve Digital. “Consciously or not, most picture a successful entrepreneur as a young white man.”
Depressed yet? Chin up. It’s not over yet. There is a problem but many people are aware of it and are working to try to fix it.
“Women and men are realizing that we need to move past the 1970s construction of women as a disadvantaged class,” say Dr. Teresa Nelson, professor of entrepreneurship at Simmons College. “We need to move onto a 21st century narrative through which women and men together create the kind of entrepreneurial class that best serves economic and social values.”
If you think fixing the problem means creating another women’s only program, Sharon Vosmek, CEO of Astia, believes you’re taking the wrong approach.
“For women to succeed in high-growth startups, they need exactly what men need and that is access to a central and powerful network of experts and investors. Entrepreneurs are men and women, investors are men and women. All need a vibrant ecosystem that breaks across gendered business practices.”
Build your relationships, not just your PowerPoint
The most important component to solving the equal access problem is to enable female founders to expand their network. Equal access is not what you know or even who you know, but who knows you.
We teach women to be good students in school. To write neatly. To color within the lines. To dot every “i” and cross every “t”. When women enter the workforce, we tell them to perfect their PowerPoints for an idea pitch. We tell them to be a good girl and go to awkward networking events or to find a mentor. But as my friend and fellow Astia Board of Trustees member, Jeanne Sullivan, says “You need more than a team, a dream, a PowerPoint, and a dog” to get investors to get their wallets out of their pockets.
Thousands of potential deals cross an investor’s desk every day. Guess which ones have a higher likelihood of getting funded? The deals that are recommended by a trusted friend or those that the investors seeks out herself. Think about it. These people are investing in your company. It’s risky business with a high rate of failure. Financing an in unknown (especially one that doesn’t look like most other executives they have invested in) is not even a consideration for most investors.
Now it’s your turn
An opportunity is only as good as your ability to take advantage of it. Now is the time to work on creating a community of ecosystem stakeholders around your startup. Research your funding options by looking for VCs, Angels, and lenders that have worked with your type of business and who may female-founded firms in their portfolios. Investors and lenders tend to be very active in the ecosystem as they are committed to building healthy deal flow. Sign up for a few events where your target investors and lenders might be speaking or attending. And, use social media. Look for common connections on LinkedIn and ask for introductions or engage on Twitter or a blog. Be bold and have specific questions ready to ask. It’s best to start with seeking advice versus going in for the kill right off the bat. The point is to develop relationships. The money will follow.