Sooner or later, every female entrepreneur looking to invest will encounter a similar experience.
They’ll be up against a skeptical team of mostly male VCs, and one will turn to the other to discuss last night’s game. Now there are many women who love football and follow it with passion. Likewise, many people do not. That’s not the point though. When the football conversation begins, the purpose of this pointed exchange is clear. He says: you are not one of us.
In the grand scheme, it is insignificant. However, this is just one of the many hurdles female business founders face when trying to build a high-growth business. They all add up and tell us why female entrepreneurs receive less than 2% of the UK’s multi-billion pound venture capital funding each year. The odds are against any woman aspiring to become the next Bezos or Musk.
The economic benefits of encouraging more female entrepreneurs to succeed have been well documented by the Rose Review, which found that removing barriers for female entrepreneurs could boost the economy by £250bn. While there is encouraging evidence of a pipeline of innovative and potentially disruptive female-led start-ups, only a handful have secured the funding needed to sustain their growth. The obvious path to accelerate towards this goal is to offer greater support to women to help them maneuver around the minefield of setting up a high-growth business.
For clarity: what is a high growth company? High-growth companies have certain characteristics, based on producing ever-increasing revenues, without increasing costs. Think Google. When this tech giant doubles its number of users, it doesn’t need to double the size of the team to serve them. Compare that to a commercial offer of, say, advice. When she doubles her appointment book, she also has to dramatically increase the number of advisors, which lowers her profits.
We know that, for the most part, women tend to start businesses that don’t scale. One of the reasons for this is that we have good people skills, so gravitate towards people-oriented, labor-intensive businesses that are not scalable. But that doesn’t tell the whole story. As the example of the football discourse shows, women who want to pursue high growth face repeated examples of unconscious bias when advocating for the investment essential to funding ventures like these. As I know firsthand, it is difficult and demoralizing to go through hundreds of arguments and hear “no” over and over again. (And yes, raising funds for ambitious ventures takes hundreds of pitches). Who wants to impose this?
It’s not just the issue of funding either. Society is not particularly tolerant of female entrepreneurs, offering little or no support framework, especially for those with preschool or toddler children. Even the language used about women entrepreneurs is off-putting. The term “mumpreneur” has condescending connotations, for example. This implies that women entrepreneurs shouldn’t stray too far from the kitchen because they have no chance of being the next Zuckerberg.
Change must be driven from both sides:
- The venture capital community needs to up its game and make the investment environment more welcoming for women, finally embracing the highly investable qualities that make us ideal entrepreneurs. While they are at it, they must recognize that extremely talented and innovative women can be found everywhere in the UK, not just in the Square Mile. In the meantime, it is in our interest to help individual women entrepreneurs find a way to overcome, overcome and work around the challenges they face.
- Government and industry must work together to create a policy and regulatory environment that helps women-led businesses grow and thrive.
Navigating these challenges is not easy. When Starling Bank was founded eight years ago, there was a lot I didn’t know about finding investments and then running a high-growth business, so I had to figure it out as I went. and as you go. As I moved from field to field, I often wondered why the world was dominated by a handful of serial entrepreneurs who started and then left one company after another. I concluded that they have learned the playbook and know how it is done.
There are no guarantees in business, let alone high growth ones, but we could make it easier for the next generation of female entrepreneurs by providing them with an entrepreneurship playbook. That’s why I’ve joined efforts with colleagues from industry, the venture capital community and government to create a High Growth Companies Task Force. The objectives of this working group will be to:
- Give women the playbook to start high-growth businesses, especially in science, technology, engineering and math, and the resources to grow.
- Influencing venture capitalists and the wider investment community to recognize the value of women entrepreneurs.
- Campaign to challenge negative gender stereotypes around entrepreneurship, building on Starling Bank’s #MakeMoneyEqual initiative.
We don’t just want to see the football talk. In fact, we’re the National Banking Partner for this year’s EURO 2022 Women’s Tournament, where we’ll be championing the brilliance of players and fans across the UK. Instead, what we want is to finally create a level playing field for women entrepreneurs building and leading high-growth businesses.
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