Patricia Keating, Executive Director of Tech Manchester – a not-for-profit initiative funded by UKFast – has worked to spearhead initiatives that increase support and resources for startups in the region and beyond, with a focus on supporting female founders. Here, she talks about six methods she believes can help address an imbalance in tech investment…
Did you know that only 5% of pitch decks that reach Venture Capital (VC) firms are from all-female founded teams? Only a further 20% of investment is won by mixed-gender founding teams. The results? Just one penny of every pound of equity funding raised for tech startups goes to an all-female founded team.
There are many contributing factors to these depressing stats, including the small percentage (18%) of females in professional tech roles and the small number of women in investment teams.
Whatever the reasons behind it, the clear reality of both tech and investment ecosystems is that the scales are significantly out of balance.
Female-led companies don’t need special treatment, but we do need to approach the topic of investment in a different way. We have a huge challenge to overcome in the tech sector.
In response to the growing issue, HM Treasury this month launched the “Investing in Women Code” which commits organisations to improving female entrepreneurs’ access to tools, resources and finance.
While some forward-thinking VCs are already acting to tackle this issue, signing up to the Government’s initiative and taking their own steps, there are many that remain unaware, and so, are part of the problem.
So what can we do as two closely intertwined industries – tech and investment – to address the imbalance?
1. Gender diversity in investment boards
We invest in companies that we believe in. Belief in something requires a level of understanding and the empathy that comes with shared experiences. How can we expect investment boards to see the ventures of women and the ventures of men equally without equal representation of genders on these teams?
Time has shown again and again that female VC advisors are more likely to be able to identify promising female companies than male VC advisors. We must have successful female entrepreneurs filling non-executive roles on investment firms’ boards of directors.
If you’re an investment company, aim to have an equal gender split. Compliment this with having equal successful male and female entrepreneurs on the advisory board.
2. Greater female representation in larger rounds
Grassroots research shows that the vast majority of female VCs are involved primarily in early-stage, seed and series A funding. The truth is that for female-founded companies to achieve series B or growth investment, there must be female VCs involved at these stages.
3. Collaboration with incubators
Investment teams must engage more with early-stage incubators during the pre-funding stages of tech startups. Get yourself involved in a mentoring capacity to help support, encourage confidence building and instil aspiration in female founders. Both men and women working with female founders can help to do this.
4. More effective communication
Traditional VC funds should employ better communication training from female-led communications agencies. This will enable an enhanced understanding of the language that must be used to encourage more females to pursue investment and the impact that changing communication styles has when speaking to different genders.
5. Provide investment education
Provide funding workshops specifically for women, delivered by both men and women from VC funds. This will achieve greater balance by raising awareness amongst women of the different investment routes and guidance on how to win funding.
6. Share ‘women in tech’ experiences
Roundtables with female founders who have been on the VC circuit are a great tool. These enable the sharing of first-hand experiences, which investment and tech professionals alike can use to identify patterns of experiences and obstacles. Only then can we begin addressing the issues in full.
These ideas require courage to truly invest in, but, as Albert Einstein once said: “The definition of insanity is doing the same thing over and over again, but expecting different results.” To deliver change, we must start to do things differently.
