It’s time to shift the narrative on female founders
Gender diversity, especially in the startup world, can jumpstart the progress of female-owned businesses, bringing out original products and services into the market, according to Jen Blandos, CEO of Female Fusion.
It has the potential to change the way an organization functions at its core. When offered equal ground, women have shown to be more than capable in leadership positions in the past. For example, the Harvard Business Review found that women eclipse men in skills like teamwork, innovation, and problem-solving — skills which are essential in a startup environment. Yet few investors actively pursue women-founded companies.
In the year 2020, the Global Venture Capital industry unexpectedly reached a record high of $300 billion. However, the year was marked by a complete disconnect between this number and the VC financing for female founders, despite the rapid growth in female-founded businesses. Several reasons can be cited for this mismatch — from unconscious bias and stereotyping, lack of diversity in VC, and unbreakable glass walls & ceilings. The need of the hour is for investors to review pitches objectively — look at the idea, business model, and its future, as well as the leadership qualities of the person at the forefront, rather than their gender.
In my work around the world, I noticed that many women in business lack confidence, have issues maintaining a work-life balance, have trouble securing funding, and often don’t have access to mentors & advisors or a large network, which can seriously hinder their entrepreneurial growth. This is where support groups like Female Fusion, which is for women and by women, come in and lend a hand.
In the Global Gender Gap Report 2021, the index results in Economic Participation and Opportunity showed that 58% of the gender gap had been sealed so far. The UAE was found to be one of five of the most-improved countries. This comes as no surprise as the country has steadfastly implemented several packages and set up entities in each city to help women entrepreneurs achieve equity, diversity, and inclusion.
In the UAE, 95% of businesses are SMEs and at least 50% of these are women-owned today. Women employ around 20% of the workforce and contribute to around 20% of the GDP. This is the result of the continuous & conscious efforts that the UAE has made to achieve these numbers. From initiatives such as visa reforms, stimulus packages, women business councils, and more, the country rings in all the right notes to attract top global talent.
New business owners receive complete support from the UAE Government and free zone authorities allow them to tap into all opportunities open to them. Entities like UN Women and NAMA Women Advancement have a two-year program to support women entrepreneurs and are running masterclasses, workshops, and an accelerator for new businesses.
The Dubai Business Women Council (DBWC) provides education, training, and funding opportunities to UAE-based businesswomen, while the Dubai Women Establishment (DWE) holds an annual Women Leadership Exchange Program to guide women on sustainable leadership practices and offers great networking opportunities. Dubai Economy and DBWC have teamed up for various webinars and workshops to empower female-led businesses too.
Female Fusion Network is also a major contributor here by creating a collaborative and supportive community for the increasing number of female-founded businesses through mentoring, networking, education, incubating, and helping them attract investors.
Bottom line — the value of investing in female founders
A diverse network of vendors: What I have found with the Female Fusion Network is that the women entrepreneur community takes care of its members — advising each other, providing referrals, and sharing their knowledge. Female founders often refer other women-led firms too.
Higher returns: It’s proven that the more diverse a team is, the better it performs.
Boston Consulting Group (BCG) revealed that startups founded & co-founded by women have an average return of 78 cents for every dollar invested, compared to their male counterparts, which have a rate of only 31 cents. BCG also estimates that $85 million more could have been earned by VCs by investing equally between male- and female-founded startups over the last 5 years.
Social change: Women spend more time making purchasing decisions for their family — inc.com’s research detailed that it is between 70-80% of consumer goods. This would mean that women-founded businesses would essentially have the best way to capture a large portion of the market with products and services that will appeal to everyone.
Uplift the economy: Providing more funding for women-owned businesses, which have a higher success rate, directly boosts the economy. As start-ups form the backbone of the global economy, if women are given an even playing field, healthy competition ensues that benefits everyone. A study by BCG revealed that if women and men participated equally as entrepreneurs, it could double the global economy from $2.5 trillion to $5 trillion.
Collaboration: A healthy work culture is one of the top requirements of the millennial employee according to Forbes. Several studies indicate that women are more open to collaboration and teamwork due to their higher emotional intelligence. This type of environment lends itself to easy adaptation and corroboration to any business’ needs.
Investing in women is not a charity—it’s just sound business sense. It’s time that investors all over the world place their bets on women founders to bring forth a new era and refine the market.