Female Founded Businesses
In 2020 alone, out of all the funding from VC firms, only 2.3% went to female-founded businesses globally.
What does that mean for women-owned businesses looking for funding?
On this segment of Own Your Future, we gain some insight from Sarah and Georgia on why there’s such a stark disparity when it comes to investing in women-owned businesses compared to their male counterparts.
Less than 10% of decision makers at VCs globally are women. Perhaps we can see why this 2.3% stat ends up becoming a reality.
It only makes sense to ask ourselves: If there aren’t enough women in positions of leadership in VC boards, then does this directly affect the percentage of funding that goes to women-owned businesses?
Undoubtedly so.
For Georgie, who resides in Berlin, visibility is not a problem. She sees women entrepreneurs everyday and sees the hustle and grit that goes into building dreams from the ground up. It’s bizarre that not many more investors are paying attention to these scalable, commercial products.
So what’s the problem?
“The network that surrounds VC and surrounds company building is archaic. It’s generational,” says Georgie. “It’s built on networks that men in general have built over generations through fraternities, through universities, and honestly, a lot of [it] is unconscious. There is definitely a lot of conscious bias, but let’s focus on the unconscious piece.”
This unconscious piece is what led Georgie to start Auxilia, a company where women are given the resources and tools to obtain funding.
As Sarah emphasizes, women workers took a major hit during the pandemic and that success is slowly starting to climb up.
Part of it is psychological. A decrease in confidence when coming back to the workforce is normal.
Connecting with other women is the first step to regaining that confidence.
What other things can women do? According to Georgie, hypercommercialism is a key.
Be hypercommercial. This means building the right products. If you’re not hypercommercial, then finding a partner who’s hypercommercial is the key.
Sure, women may sell products that are centered around lifestyle, for example mental health, but the key is to sell the product in a scalable way.
Sarah understands this importance of commercialism.
She’s the cofounder of Kindora, a first European dedicated platform for buying, selling, and renting premium new and resale babies’ and children’s goods.
Trying to explain that resale luxury baby goods to male investors was undoubtedly a challenge.
Ultimately, 64% of funding came from women investors.
When asked what she looks for investors, Sarah says, “I’m looking for someone who understands the scope of the opportunity, who gets that this is not just about babies and kids, it’s a big generational shift. Finally, are want to work with people who are nice. Who get it.”
Georgie and Sarah emphasized that it’s not about being dishonest, but selling the potential and the opportunity that you believe in.
After all, statistically it’s proven that women are delivering better returns on every dollar invested compared to male-led companies.
It’s important to find funders that you want to do business with, feel ok with saying “no” to someone if they’re not the right fit for you or your business.
And lastly, interview the VCs if they’re looking to invest in your company.
Watch how Sarah continues to grow Kindora and be a part of Georgie’s women founders group on LinkedIn.
