Those of you that have read my previous posts will know that gender equality is something I am passionate about, so when I recently read an article entitled “we have to tell investors that we’re not having any more children”, I knew I had to post about it.
The article explores the difficulties faced by women in the venture capital market – with only 1% of UK venture capital funding going to female run companies. This begs the question of how many female entrepreneurs there are compared to male entrepreneurs in order to truly understand this statistic. Alison Rose’s recent review of women and finance suggests that in the UK, for every 10 male entrepreneurs, there are less than five female counterparts. Whilst the article doesn’t go on to explore this issue, I was left wondering why there is such a disparity.
The business owners featured in the article, Ms Clarke and Ms Celestial-One, go on to say that in their experience, they have done “noticeably better when pitching to women”. Given that 63% of UK venture capital firms do not have any women in senior investment positions, statistically, they are already fighting a losing battle. It is no secret that an investor is more likely to invest in a product that they understand and can relate to.
Anyone who has watched Dragons’ Den will recall the countless occasions the dragons have refused to part with their cash as they didn’t “buy-in” to the product. The problem therefore seems to be twofold. Firstly, not enough women are deciding to start up their own businesses and secondly, there is a lack of diversity amongst those making the investment decisions. According to Alison Rose’s review, access to and awareness of funding is the number one barrier for female entrepreneurs, which is clearly a problem that needs addressing.
The article goes on to liken venture capital funds to an “old boys’ network”, with funds typically backing people that they know or are familiar with. This is another issue highlighted by Alison Rose, who suggests that women are statistically less likely than men to know other entrepreneurs or have access to sponsors or professional support networks. In my view, schools and colleges have a key role to play here in helping to determine how young people perceive themselves, as well as signposting them to relevant professional networks from an early age. But increasing diversity amongst new entrepreneurs is only part of the issue – the diversity of the decision makers is another key factor as I have noted above.
Whilst a tick box exercise is not the answer, it is widely accepted that different people bring different experiences and skills to the fore which can only inform better business decisions.In this respect, it is great to read that the investment community is starting to recognise the importance of diversity, with initiatives being implemented to help women into more senior investment roles.
Despite this positive step, it seems there is still work to be done, with the female entrepreneurs admitting that when they pitch for investment they “make it clear” that they are not having any more children due to investors’ concerns around funding someone who is pregnant or who may need to take time off. In 2019 it is concerning that women feel the need to justify themselves in this way for fear that they will be perceived as less committed than their male counterparts.
There are numerous examples of women who manage to have a successful career as well as raise a family and we should be doing more to support individuals to manage these demands rather than perpetuating outdated stereotypes. Sadly, I can’t help but think that these attitudes and issues continue to pervade the wider workforce as well as the venture capital market. It is clear that a solution is needed but it is unlikely that there is one quick fix.
The issue is a complex one, and cultural and societal barriers still need to be overcome. Whilst not directly related to employment law, this article should also serve as a reminder to recruiters and employers that treating someone less favourably because of their sex can leave them exposed to claims for discrimination. Employers should look to ensure that their staff and those in charge of recruitment have received appropriate unconscious bias training and equality and diversity training to minimise this risk.
‘We have to tell investors we're not having more children’