Key Points:
- Analysis by the Boston Consulting Group (BCG) reveals that if women and men around the world participated equally as entrepreneurs, global GDP could ultimately rise by approximately three per cent to six per cent, boosting the global economy by $2.5trn to $5trn.
- A report by the Alan Turing Institute found that female-founded companies account for under three per cent of venture capital (VC) funding deals involving AI startups. Between 2012 and 2022, 80 per cent of total capital invested by VCs in AI was raised by all-male teams.
- Female entrepreneurs face challenges such as obtaining funding, competing in male-dominated industries, and wage disparities.
A fear of risk-taking plays a part in keeping some women away from becoming entrepreneurs. However, the business world is failing women in educating, encouraging, training, and supporting them in their entrepreneurial endeavors. Academic institutions, such as London Business School and the Institute of Entrepreneurship and Private Capital (IEPC), are working to turn this difficulty into an opportunity. London Business School is hosting three one-day workshops as part of the Female Founders Rise (FFR) initiative to bring more UK women into entrepreneurship and help them succeed.
Being an entrepreneur can be a lonely world, and risk aversion can deter women from starting their own businesses. It is crucial for women to find the right community and mentor to support them. Understanding the way markets and industries operate is essential, and entrepreneurs should be prepared to work hard and be patient. Women also face unique challenges such as obtaining funding and competing in male-dominated industries.
Research conducted by Dr. Dana Kanze and her colleagues indicates that female founding CEOs receive less funding at lower valuations and retain less equity compared to their male counterparts when catering to male-dominated industries. This disparity can be attributed to a misperception among investors about the fit of female founders in male-dominated industries. Greater financial decision-making literacy among early-stage venture funders can help close the gender gaps.
To develop more opportunities for women in entrepreneurship, there is a need for systemic change and a recognition of the potential benefits women bring. The time for small steps has passed, and it is time to embrace the opportunities presented by having more women as entrepreneurs. Aspiring female founders can master entrepreneurial mindsets to challenge assumptions, overcome obstacles, and change the world.
