What are the real challenges facing female entrepreneurs?
In the business world, female entrepreneurs are faced with numerous challenges, from funding opportunities to fewer women in senior roles than their male counterparts. So, with International Women’s Day on the horizon, Business Leader decided to take a closer look at them.
With only 2% of venture capital going to female-led startups, acquiring funding is one of the biggest challenges facing female entrepreneurs. As funding is an important step for many looking to grow their business, such a lack of investment means many female-led businesses have likely been unable to reach the next stage of their business growth.
Polly McMaster, Founder and CEO of The Fold, elaborates on the issue.
“One of the biggest challenges is the under-representation of women investors,” says Polly. “Fundamentally, you will pitch to more men at every level of the investment spectrum: from angels, VCs, growth capital, private equity, family offices. Women are, therefore, less likely to pitch to women, men are more likely to pitch to men.
“It depends on your business idea, but the barriers to investment are higher when pitching to a group who are less likely to understand a female-biased product, service, or tech. Ideas servicing a female customer often get bundled dismissively as ‘lifestyle’/’femtech’, etc. despite the fact that as an audience, women are 50% of the population and often control even more in terms of the domestic spend. We need more experienced female investors supporting women entrepreneurs and more credence given to their ideas.”
However, funding is far from the only challenge, as pointed out by Nicola Stopps, the Founder of Simply Sustainable.
She comments: “There is a myriad of challenges women face when starting their own business, ranging from gender disparities in pay to accessible resources, which likely impact the belief female entrepreneurs have in their own success.
“While sustainability is a growing area of priority across the corporate world, there is a concerning lack of visible female senior leadership and I was particularly disappointed to see the composition of female leadership at COP26 was significantly low in comparison to the overall representation of women in the UK team.
“For women in sustainability, statistics like these not only highlight inherent issues around gender imbalances and opportunities in the corporate world, but what made it particularly worse is that women are more likely to suffer the adverse impacts of climate change. This is because women are more likely to live in poverty than men, have less access to basic human rights, like the ability to freely move and acquire land, and face systematic violence that escalates during periods of instability.
“The fact that the Paris Agreement includes specific provisions to ensure women receive support to cope with the hazards of climate change highlights the absence of women at the top table even more.”
Approximately 66 percent of primary caregivers are women
Danni Rush, COO of Virgin Experience Days and Virgin Incentives, also highlights the disproportionate number of female primary caregivers as a challenge.
She says: “For women entrepreneurs, it can be challenging dividing their time between establishing and achieving their business goals whilst also juggling family commitments – approximately 66 per cent of primary caregivers in the family are women, meaning prioritising business work might be more challenging, especially when just starting up.”
Whilst the number of male primary caregivers has likely improved in recent decades, higher numbers are needed to help level the playing field for female entrepreneurs who wish to pursue their own business ambitions.
When we look at the FTSE100, just eight of these companies are led by women too. However, Danni Rush points out that there have been some improvements at the UK’s top-listed businesses in recent years.
She continues: “Generally speaking, women have more equality in the business world than ever before – with now nearly 40 percent of all FTSE 100 board positions held by women.
“The advancement of technology and better access to funding has also allowed more women to start-up businesses and manage them remotely – freeing up time to juggle family commitments with work. Whitney Wolfe Herd, the Co-founder of Bumble, the female-first dating app, successfully launched the app after leaving Tinder and has since expanded its offering to help people form platonic friendships and create professional networking opportunities.
“Female entrepreneurs are also not alone in the modern business world, with many successful businesswomen eager to become mentors and help other aspiring female entrepreneurs build their confidence and grow their professional careers. Female-only networking events and groups have also been set up to help with this. There’s never been a better time to be a female entrepreneur with so much support out there. But there is still more to be done to improve equality in the workplace, not just for women but other marginalised demographics in the labour market.”
However, Polly McMaster believes outdated attitudes still pose a problem.
She says: “I would like to believe things have improved, alongside the proportion of women serving on boards, reaching executive positions and key government posts. However, I do still hear stories of women being told they won’t get investment because as a young woman, they will become distracted by family or relationships – which is an old-fashioned, patronising and discriminatory approach.”
How can these challenges be overcome?
There is a case to say things have improved for female entrepreneurs in recent years, but many challenges and disparities with male entrepreneurs remain. Finding ways to overcome these challenges and level the playing field are, therefore, essential.
According to Krisi Smith, Co-Founder of Bird & Blend, support is key.
She comments: “Supporting female start-ups is integral to the future of women in business, especially when considering that only 16% of SME employers are led by women. Perhaps more unsurprisingly, only 8% of women are CEOs of FTSE 100 companies. While the onus is on corporates as a collective to ensure more women are accessing opportunities, this also sheds light on how we must instil the idea that women can succeed in a business context from the outset.
“I feel fortunate to be one of only 5.6% of women to run their own business in the UK and hope to set a positive example to others, whether that be through mentoring, aspiring entrepreneurs, or conveying the simple yet important message that women add so much value to the corporate world.”
However, Nicola Stopps highlights the importance of a good team.
She says: “My journey as a female entrepreneur has not been a smooth trajectory, but I have always had a good team around me – that is extremely important to any business’ success.
“There is still much to do in supporting women with their professional achievements, but I’m heartened by the number of success stories involving female entrepreneurs. In fact, there are currently 3,831 companies in the UK that are led by a female entrepreneur and have raised equity finance, totalling £6.82b – a good step forward and something to be celebrated on International Women’s Day.”
Danni Rush concurs about the importance of those around you.
“Female entrepreneurs should prioritise having a good network around them. Whether it be adequate childcare setups, a business mentor/partner or family and friends to lean on. A reliable group of people will give any aspiring businesswomen an advantage and help them to successfully overcome some of the unique challenges they might be facing.”
Polly McMaster, however, believes inspiration has a big role to play.
She comments: “Sharing the success of women entrepreneurs at every scale is really important to inspire other women. They will see women like themselves taking risks, being resilient to take a great idea to market, and becoming successful. The Fold tells some of these stories through our “Fold Women” features, and having more platforms and articles put entrepreneurial women in the spotlight makes it feel more achievable for others.
“More women should also invest! I have heard from some entrepreneurs that their female investors put in less money than their male counterparts, but ask many more questions. This shows great due diligence, but also suggests that there is still less capital and risk appetite. When the female investment community matures to the same level, it will be phenomenal to see how many more women will get funded and be successful in building their businesses.”
Becoming a successful entrepreneur isn’t easy for anyone, but nobody should have to work harder than someone else to enjoy the same level of success. And whilst many will say there are plenty of reasons to be positive this International Women’s Day, there is still a long way to go before the playing field is equal.