Why Women Founders Matter

women

Women have been dominating the headlines for the last weeks. From debates about women ‘leaning in’ in the workplace, to new research that shows that women are leaving their mark on the tech scene – women’s issues are having their time in the light.

So why all the fuss about the ladies? Because we are the next billion.

The next billion of consumers, the next billion of markets (the emerging markets), and the next billion of products. In short, women are poised to transform economies worldwide for generations to come.

Today, I want to talk to you about the innovators. The women changing the face of the tech startup industry right before our eyes. And I have one question to ask you…Are you ready for us?

Women by the Numbers

Fact: women are turning to entrepreneurship in greater numbers than we have ever seen before.

The growth of female-run businesses has increased by 54% in the last 15 years – second only to the growth of large, publicly-owned companies. Women-owned business represent 28% of American enterprises, and employ 7.7 million people in the US.

Make no mistake – women are changing the face of our economy. And with the next billion joining their ranks over the next 7 to 8 years, there will be no stopping the rising tide of female entrepreneurship.

But don’t break open the bubbly just yet. While women are rocking the business world at large, only 3% of technology startups in Silicon Valley are started by women. How can that be? If women are choosing entrepreneurship by the millions, why aren’t these numbers reflected in the startup community? Where are all the women?

But – more importantly – why do these numbers matter?

It’s All About the Benjamins, Baby

The most compelling argument in favour of increasing the number of female founders of tech startups is not just about doing what’s ‘right’ – it’s an economic argument, and quite a powerful one, at that.

Study after study have shown that gender diversity enhances stability and has a positive impact on a company’s bottom line. In fact, research shows that women-run private tech companies are not only more capital-efficient, but bring in a 35% higher return on investment.

While the rest of the world was getting crushed by the 2008 recession, women (once again) proved their resilience. A report released by the Credit Suisse Research Institute found that despite a challenging economic climate, companies with women on boards outperformed companies who had all-male boards.

In addition to bringing in 12% more revenue than male-owned tech companies when having received venture funding, startups with women at the helm have proven to have a higher likelihood of success overall. Of startups with five or more women in leadership roles, 61% succeeded, and successful companies had a 7.1% share of female executives, while unsuccessful companies only had 3.1%.

So, in summary: women = profit + stability + growth. Sounds like a pretty good deal to me.

But it’s not a matter of one gender being better than the other…it’s about balance. “I am fed up with this tyranny of either or – either men, or women” explains Halla Tomasdottir in her inspirational TED Talk, “we need to start embracing the beauty of balance”.

Halla founded a financial services firm in her native Iceland based on traditionally ‘feminine’ values after seeing her country’s economy destroyed by reckless economic practices. Her approach to gender diversity in business is exactly what we try to encourage with Women 2.0. It’s not a matter of one gender or the other, it’s about giving our businesses a creative leg up by embracing diversity at the leadership level.

So, how do we create this balance?

Getting Ready for the Next Billion

Civilization is the encouragement of differences – Gandhi

In the immortal words of Mahatma Gandhi, the true test of a society is it’s ability to encourage and celebrate differences. While we’ve come a long way since the days of Mad Men, the tech startup industry needs to break the mould and begin encouraging differences by putting our money where our mouth is.

1. Investing

While women are starting businesses at 1.5 times the national rate, they receive between 4-9% of venture capital funding, and the average percentage of women in top VC firms is as low as 8%. Groups like the Pipeline Fellowship are working to change the ratio by training women to become angel investors, and creating pools of funding available to women-lead social ventures – by other women. While increasing the representation of women in the angel investing and/or venture capital industry does not guarantee that more women-run startups will receive funding, it contributes to the creation of a vibrant, diverse ecosystem that is welcoming to women.

2. Mentorship

One of the most important parts of the Women 2.0 mission is the creation of supportive communities around female entrepreneurship. From our Women 2.0 blog network to our Founder Fridays events, we encourage connections between experienced female entrepreneurs and fledgling founders. These supportive communities equip young female entrepreneurs with the inspiration, information, and the networks that they need to successfully launch their own ventures.

3. Education

Studies show that girls lose interest in STEM (science, tech, engineering, math) around middle school. Programs like Girls Learning Code, Black Girls Code, and Girls Who Code are essential resources that provide young women with access to vital technology education and access to role models in the tech industry. In order to make a lasting change to the representation of women in the tech industry, we need to be reaching out the next generation of innovators today.

We are at a tipping point as an industry. The next billion is coming, and will change the face of business and entrepreneurship forever. Now is the time for companies and business leaders to make a conscious choice: what side of history do they want to be on?

I am ready for the next billion. Are you?


About the author: Shaherose Charania is Co-Founder, President and CEO of Women 2.0. In parallel, she leads Founder Labs, an early stage incubator focused on new mobile ideas and is a mentor with 500 Startups. At heart she is a mobile and telephony junkie. She’s led new consumer products at Ribbit (BT). Previously, she was Director of Product Management at Talenthouse and JAJAH (sold toTelefonica/O2). Shaherose holds an Honors B.A. in Business Admin from The University of Western Ontario’s Richard Ivey School of Business.

Photo credit: Erica Kawamoto Hsu

Tags: , , , ,
Free Guide: Straight-up Startup Advice

Learn From The Best
Top Entrepreneurial Advice
150 Entrepreneurs Share Their Secrets

Free Guide: Straight-up Startup Advice

Comments.

  • Pingback: Here’s Why Women Founders Matter | Business Idea Research

  • http://www.facebook.com/patricia.muir Patricia Muir

    I was fortunate to attend a post International Women’s Day event this morning in Toronto at MaRS Discover District – “Gaining Momentum: Women and Technology”. Many of the statistics in this article were presented to a Canadian audience of women entrepreneurs. It was very evident that there is a generation of brilliant young women leading the momentum in technology in Toronto and surrounding area. The programs (and the founders) mentioned in this article will be credited with changing the course of young women who continue to develop their math and science skills.

  • Pingback: Why Women Founders Matter | Christine Celise Johnson

  • Pingback: Technology news - Techvibes.com