Why helping female entrepreneurs be successful is so important
Female founders are being underrepresented in the Netherlands as in many other parts of the world. When it comes to private companies and startups, it remains a male-dominated industry. This is influenced by a combination of social, cultural, and systemic factors. At Women in AI we strive to create more diversity in the field of AI and with our Accelerate program we encourage women to pursue their entrepreneurial ideas.
Author: Ingrid van Heuven van Staereling.
Why are female founders so rare? Stereotypes, lack of access to funding, network opportunities and absence of representation all play a big part in the success of these female entrepreneurs. In this blog we explain more about the struggles they may have and the ways our WAI community helps to solve the problem.
Stereotypes and expectations
How women are viewed in leadership positions sometimes holds them back. Women may face higher expectations and scrutiny than their male counterparts. Most of the time they are judged more harshly for assertive behavior. As for many traits that would be considered acceptable in male leaders. Next to that, societal expectations and stereotypes can shape perceptions of gender roles. The way society gives expectations to women’s roles in caregiving and homemaking. An unequal balance in these expectations makes it challenging for women to start their business. Putting the load of both running the business and family responsibilities on them, potentially dissuades women from being an entrepreneur.
It all comes down to the biases that are involved. Unconscious biases held by individuals within (and outside) the entrepreneurial ecosystem can influence their opportunities that may be presented to them. Investors and business advisors might be reluctant to help out. And the many biases female entrepreneurs may face can also affect the motivation any of them may have. These stereotypes might be holding them back to pursue their career.
The profitability of female-led businesses
Despite the existing challenges and disparities in venture capital funding for female-only founder teams, recent data indicates that female entrepreneurs and their companies can yield remarkable returns. Techleap.nl’s State of Dutch Tech report revealed that, in 2022, a mere 0.7 per cent of VC funding in the Netherlands went to female-only founder teams, despite a total investment of €2.6 billion in Dutch startups. However, research from the Kauffman Foundation suggests that private technology companies led by women exhibit a 35% higher return on investment. Furthermore, according to findings from MassChallenge and Boston Consulting Group (BCG), companies founded by women deliver over 2 times the revenue per dollar invested.
These statistics highlight the potential and profitability of ventures led by women, underscoring the importance of addressing funding disparities to fully harness the economic contributions of female entrepreneurs. So how can we change the narrative? Which ways can we contribute to changing the way we think and perceive female entrepreneurs?
Networking and mentorship
Networking is crucial in the business world. It is a way to build a netwerk, get inspired and even find mentors or investors to help you grow. Women might face challenges in building the same networks as men. At Women in AI we actively give women a platform to network, connect and find the right investors. The last one is very important, since female founders often face challenges in accessing funding for their ventures, as the statistics above shows. There may be biases in investment decisions, and in many cases women receive proportionally less venture capital compared to their male counterparts. This can limit their ability to start and scale businesses.
Making the right connections not only benefits female entrepreneurs financially, the absence of mentorship and guidance can hinder career progression and leadership development. We know that networks and connections play a significant role in accessing opportunities, like mentorship, and guidance. Within our Accelerate program we have 12 amazing founders who are addressing various challenges they have with creating their AI solutions. During our kick off event a panel with 3 female founders shared their stories, the obstacles they went through and what have they done right and wrong during the journey. The (co-)founders Mariia Plotkina (Quicky), Aleks Sztemberg (Stormly) and Anastasia Soloveva (Athena) were able to answer thought-provoking questions. One of the most interesting topics that were discussed during the program was about having a male co-founder. Because sometimes, and unfortunately, it can help to solve fundraising challenges. But let’s hope that by bringing in more successful female entrepreneurs, having a male co-founder isn’t needed to affect your fundraising chances anymore.
Lack of representation
We need more women in leadership roles. Not only because the companies these women run or start are very successful, but also to change the perspective. The scarcity of visible female role models in entrepreneurship can create a perception that entrepreneurship is a male-dominated field. This lack of representation may discourage women from pursuing entrepreneurial endeavors. Addressing these issues involves a multifaceted approach, including promoting diversity and inclusivity in entrepreneurship, providing targeted support and mentorship programs for female founders. But also addressing biases in funding processes, and encouraging a cultural shift towards recognizing and valuing the contributions of women in entrepreneurship. Additionally, policy changes and initiatives that support work-life balance and challenge gender stereotypes can contribute to creating a more equitable entrepreneurial landscape.
We need to break the cycle and start creating a world where female entrepreneurs are not the exception anymore. By helping these women strive, we give others the opportunity to do so too. And that is, in its core, what Women in AI stand for.
Curious to know more? Feel free to contact our Accelerate Program Lead, Julia Kuzmicheva.