Raising the first round of venture capital is not an easy job for anyone. But stats show that raising money is especially difficult for female entrepreneurs. According to Women Who Tech, only 7 percent of investor money “goes to women-led startups”. However, the numbers also show that “women-led tech startups have 35 percent higher ROI when venture backed and generate 12 percent higher revenue than male-run startups”.
So why is there such a gap between men and women when it comes to getting VC funding? There are a few reasons why this is happening. And it is important to understand the problem from the root to be able to come up with reliable solutions.
“One particular sector where the (gender) divide is hard to ignore is technology”, says Kellie Pevy, a digital marketing tutor with over 15 years experience giving advice to women in tech. In a male dominated industry, there has been a change in attitude in the past years. But there is still a lot of work to do. Pevy acknowledges that today “the statistics show that only 24 percent of the technology industry workforce are women. But I see this as a big change from the 10 percent that Pinterest reported back in 2013 or 15 percent by Facebook in 2014”.
The increase in women working in tech has a direct effect on the rise of women founding and co-founding startups. These three tips may help women entrepreneurs who are planning to take their businesses up to the next level:
1. Start a Typical VC-Backed Business
As this article published by Wharton University of Pennsylvania on why VCs aren’t funding women-led startups puts it: “
There are many reasons why women don’t receive their share of VC funding and interest. One explanation is that women don’t start businesses that look like typical VC-backed businesses. Women-founded businesses tend to be smaller and in lower growth industries…