On International Women’s Day, it’s important to acknowledge that female entrepreneurs face a challenge to get funding for their start-ups – and in fact, things are getting worse, not better. In 2019, 2.8% of funding went to female-led start-ups; in 2020, that fell to 2.3%, Crunchbase figures show. So what are Vala doing about it?
Our attitude is that we’re simply looking for great people with great ideas, whoever they may be. Jasper, our CEO, says “we look for people that we believe are equipped with all the right skills that could make them great entrepreneurs, rather than those with proven experience and proven business models. We provide a much more nurturing environment. It’s about finding people that we believe have got the raw ingredients, and then working with them to try to create great outcomes. If you start from the point of only investing in people that are proven and you as an investor are risk, your pool of female founders is woefully small. You have to take a different tack here otherwise you are missing out on some terrific opportunities.”
Here at Vala we have a number of brilliantly talented female founders that we’re proud to work with. We asked some of them about they challenges they face, and whether they could give any advice to their peers. It was eye-opening to say the least!
Brittany Harris, co-founder Q-Flow
“Unfortunately, when you think of exceptional unicorn founders most think of Jeff Bezos, Elon Musk and Bill Gates; all of these are white men. If you’ve got 20 companies in front of you with brilliant ideas and solid business strategies, and you have enough money to fund one of them, one has an exceptional male founder and one, an exceptional female founder, your historic data tells you the male one is more likely to succeed. And it’s a reinforcing loop, as the male founders received better funding and more favourable terms, they are more likely to succeed and so it perpetuates itself. It is a cycle that’s very hard to break.
There are a huge number of negative experiences that we have had that I feel are explicitly linked to being female founders. There have been unfortunate comments ranging from “how do we know you didn’t get this pilot because your boyfriend works on the construction site” to ” you’re not going to go and get pregnant now are you?” a comment somewhat said in jest, but that does genuinely highlight the concerns that investors have but don’t always voice.
But I think the one that we found most shocking and frustrating was in a recent investment committee were one of the partners, responsible for diversity no less, explicitly asked our male mentor when he would sell the company. Our mentor, although shocked, effectively redirected the question to me which I answered.”
Stella Smith, founder Pirkx
“I find it incredibly disappointing and sad when I read the current status of funding for women. The International Monetary Fund has warned that Covid-19 threatens to roll back the last 30 years of economic gains for women and exacerbate existing funding inequalities. It wasn’t really a very inspiring state of play before the pandemic. It is a dichotomy, for every £1 of venture capital investment in the UK, all-female founder teams get less than 1p, all-male founder teams get 89p, and mixed-gender teams 10p. The data on emergency pandemic funding for female entrepreneurs indicates that this gap has continued to widen.
I don’t think for me being a female has been barrier, but I have a financial services background, which enables me to step outside and inside of majority male dominated spaces. However, with Pirkx we support numerous female owners, who run highly successful micro-businesses in beauty, well-being, hospitality and retail. They have been severely hit by the pandemic and if it wasn’t easy before it isn’t that easy for them now, yet they are a crucial part of the economy. ”
Alexandra Smith, co-founder The Sustainability Group
Investment is not the only place we see invisible obstacles for women. I think it is worth understanding who funds start-ups, their motivations, the expectations of what a founder looks and sounds like, the authority gap – how much harder it is for women to be trusted in their ideas and business acumen, it starts to build a picture of the additional challenges that face women looking for investment. I am confident that the needle is shifting in the right direction, as many VC firms are actively looking to increase the inclusiveness and sustainability of their portfolios.
I am in the fortunate position of having an incredibly experienced and very knowledgeable business partner; he also happens to be a man. As equal partners in the business, it has been eye-opening to see the frequent micro biases from so many people that we encounter. There is always the assumption that I work for and not with Mike. I am interrupted more often when speaking, and when explaining our product and services. There is often a question to Mike to ‘back up’ or verify my words. I think for both of us, being in an equal position, the differences in how we have been treated have become increasingly obvious, sometimes amusing and often frustrating.”
It’s clear from hearing from some of those stories that there’s still a long way to go, but we hope that by backing brilliant female founders and helping them succeed, we’re contributing in some small way to making progress. To find out more about the companies mentioned in this article, please visit our portfolio page.