New research has claimed that there is a wide disparity between how male and female founders are treated by investors.
Pink Salt Ventures, a UK venture capital firm solely focused on funding female founders, conducted a survey of its founder community and unearthed ‘startling’ data and attitudes around gender – and the consequences of bias.
The survey of 90 female founders was conducted in partnership with Pink Salt Ventures’ advisor Dr Dana Kanze, a leading expert on gender bias in venture capital. Dr Kanze’s TED Talk on the real reasons female founders receive inadequate funding has over two million views.
It found that 97% of respondents believe there is a fundamental difference in how investors treat male and female founders, with 83% citing the lack of female decision-makers as the largest barrier to funding.
The impact seems to be most concentrated in post-seed stage fundraises. Three-quarters of the respondents believe there is a lack of awareness of what a VC-backable business is.
Of the respondents – all female – 82% are first-time founders, with the remainder serial entrepreneurs. Of the latter, 88% started with a team, while only 58% of first-time founders did.
Launchpad: Building a flexible workforce – with Beckie Taylor
Tech Returners CEO Beckie Taylor will delve into the opportunities and challenges around building a flexible workforce – and explain how her company helps tech employees back in to work following a career break such as maternity leave – in TechBlast’s Launchpad podcast webinar. You can sign up at the link above and submit a question for Beckie below
The survey complements conclusions recently reached by the Harvard Business Review that female founders are two times less likely to secure post-seed funding than males; and data from Pitchbook that female founders raise less capital at lower valuations and exit their businesses quicker, proving they can do as much as their male peers – with less.
“Our survey’s results are clear: a fundamental gender funding gap exists, which is to the detriment of female founders looking to scale their firms; the next generation of female business leaders they would ideally inspire and reinvest in; and investors generally – whose gender bias leads to missed opportunities in investable businesses,” said Samira Ann Qassim, co-founder and partner at Pink Salt Ventures.
“This is a wake-up call for investors to take action to ensure female founders have the same opportunities as males.”
Saloni Bhojwani, co-founder and partner at Pink Salt Ventures, said: “There is a huge opportunity to drive growth in the industry by backing underfunded talent.
“Generationally speaking, the pipeline of female entrepreneurial talent only continues to grow, and our research shows what the ecosystem needs and is asking for: more dedicated capital, networks and access to scale their companies.”
Dr Kanze, Associate Professor of Organisational Behaviour at London Business School, reflected: “These rich insights show the urgent need for investor-side, rather than founder-side, reform. Female founders are clamouring for this, and are badly in need of VC funds allowing for cold introductions, plus access to non-financial resources and specific guidance at a time when they are too early for consideration.
“Moreover, until female founders receive the funds they need at the valuations they deserve, they won’t participate in the liquidity events that can enable them to become serial entrepreneurs and investors themselves.”