Inclusive investment conductors for start-ups led by women, for a more resilient, innovative and balanced economy

When thinking about grants and subsidies for women entrepreneurs, in Spain we find as a reference the Business Support Program for Women (PAEM) and the Microcredits for Women of the Chambers of Commerce, which offer information and advice on different lines of financing for microcredits without guarantees of up to 25,000 euros. The program is developed thanks to a collaboration agreement signed between the Women's Institute and MICROBANK.

“W&W Women's Wisdom”, which connects prestigious women with successful experiences (mentors) with entrepreneurs who need their support (mentors), enabling participation in a forum for cooperation and exchange of experiences, or the Women's Challenge Program Rural, are other resources available to women who want to create or lead a business or startup. But the main problem is access to finance.

An increasing number of senior women venture capitalists in Europe are calling for more capital for women-led vehicles, in an effort to advance the interests of women in the investment community and help support women-founded startups.

Gender imbalance in venture capital for female-led startups

The gender imbalance in venture capital is evidence, and despite awareness of the problem, the numbers remain dire. “The world works by default, and the default is male,” said Kinga Stanislawska, managing general partner at Experior VC and founder of industry group European Women in Venture Capital.

“Women have the ability, the background and the networks to successfully invest in startups, but they don't treat us on par with our male colleagues. A recent report published by European Women in VC found that a major obstacle to gender parity for female-led startups is the lack of female partners in European venture capital firms. While venture capital firms have made progress at the junior level, decision-making power has not changed at the senior levels. Data from 2016 to 2020 shows that only 10% of European venture capital firms have a mixed leadership team.

Knowledge4lnnovation Forum and Collabwith produced in 2021 a set of recommendations on how to improve gender equality with a particular view on women-led venture capital funds and women-led startups. 'Closing the gender investment gap for a more resilient, innovative, inclusive and balanced economy' is the title of this report which states that “a step towards unlocking the potential of women investors, entrepreneurs and innovators. We consider gender balance in entrepreneurship and investment. and especially the ecosystem of startups and scaleups. We know that 30% of entrepreneurs are women. But they receive 27% of the financing available with the pandemic, this figure has even dropped to 1%.”

“We constantly ask ourselves how to improve our economy. and our problem is that half of our population is not accessing business opportunities. All the people involved in the companies must tackle this together. Innovation ecosystems are a key element, they are the connection center for academia, startups, mentors, investors, research centers, etc.”

Does the gender of the investor matter for the success of women entrepreneurs?

Kaisa Snellman, Isabelle Solal have published in May 2022 the study 'Does the gender of the investor matter for the success of women entrepreneurs? Gender homophily and the stigma of incompetence in corporate finance. These authors conclude that “encouraging women to support and invest in other women has often been put forward as a potential solution to the persistent gender gap in many industries, including high-growth entrepreneurship. There are undoubted benefits to this type of support, especially in male-dominated environments, as it can open up opportunities for women that are otherwise inaccessible.”

However, for Snellman and Solal “the possible associated costs are not well understood. Focusing on venture-backed startups, we theorize that prospective investors may discount a female entrepreneur's competence as the key factor in an early-stage investment decision, when the investment comes from a female investor. Consequently, women-backed entrepreneurs may find it difficult to raise additional funds from new investors, putting the long-term growth and survival of their businesses at risk.”

“We found that women-founded companies were less likely to raise a second round of follow-on venture capital when their first round included only women investors, compared to women-founded companies that raised a first round of funding from men, or men and women. woman, VC partners. There was no equivalent investor gender effect for companies with all-male founding teams.

These researchers reveal that “in a subsequent experimental study, we showed that female founders received less favorable evaluations for identical business launches when they claimed to have received a previous investment from a female investor, compared to those with backing from men, and compared to the founding men backed by investors of any gender. Furthermore, we showed that these women were perceived as less competent and that this competence discount explained their low pitch scores.

“Taken together, our findings provide compelling evidence that receiving support from other women can be perceived negatively by raters, resulting in a reduction in a woman's competence with associated long-term repercussions on her ability to perform and succeed. successful”, conclude Isabelle Solal and Kaisa Snellman.