Overcoming the Funding Gap: How women in tech can win funding battles

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Hilda Mwangi
Chief Financial Officer
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Overcoming the Gender Gap in Tech: Fostering Women-Led Companies

Hi there! I’m Hilda Mogi, your host for today. As a CFO with over 25 years of experience in tech, today I’d like to discuss a significant challenge in the industry- the gender gap. From funding to representation, we have a lot to cover. So grab a coffee and join me on this enlightening journey!

The Current Situation: Statistics Speak

Did you know that only 28% of the tech workforce at big tech companies, like Google, Facebook, and Apple, are women? And it isn’t much better elsewhere in tech, with women representing only 26% on average.

But, there are gleams of hope. In 2021, 25% of all startups were women-founded. Also, it’s encouraging to see that the majority of small businesses being created today are women-led! Yet, the funding scenario is far from ideal - only 1.9% of Venture Capital (VC) funds in 2022 went to women-founded startups.

Interestingly though, the funding amount does increase significantly, from 1.9% to 17.2%, if the all-women team includes even a single male founder, reflecting the unfortunate reality of male dominance in the funding sphere.

What Causes the Gap?

At the early stages of VC funding, investors feel most comfortable investing in people who resemble themselves: people who talk, think, and even dine like them. This inherent comfort bias often means they perceive women-led businesses as riskier propositions—it is simply harder for male investors to see themselves in a woman founder, despite many of these businesses actually having higher growth, traction, and lesser risk.

Moreover, women founders often design solutions for women's needs, something that male investors might not understand or appreciate, creating another barrier to obtaining funding.

The Invisible Barriers: Myths & Misconceptions

Female Founders & Funds

A glaring misconception is that women are less confident and informed about money than their male counterparts, especially in the context of long-term planning. Such biases can deter potential investors.

The Femtech Revolution and its Impact

Female-led tech (Femtech), which tailors products to women’s unique needs and lifestyles, has seen a surge in recent years—from roughly 70 startups a decade ago to over 600 today. This development reflects an increased awareness and acceptance of women and women's health issues. And hopefully, it will lead to a comfort shift among investors.

Bridging the Gap: The Importance and the How

The tech sector's rapid growth means the creation of a new wealth class. If women cannot actively participate, the global gender gap will increase, reinforcing male-dominance in funding. This is why it’s paramount to bridge this gap.

Leveraging Communities and Networks

Building a strong community can be extremely beneficial. It can provide both valuable feedback and connect you with potential investors. Prominent tech-women groups like The Next Women and Women Tech Founders are excellent resources.

Boost Confidence

Believing in yourself, your product, and your business plan is half the battle won. So approach investors confidently and assertively!

Empower More Women to Write Checks

It is a proven fact that investors twice as likely to fund women-founded startups are female. So, more women out there need to be writing checks!

Demonstrate a Billion-Dollar Vision

Convincing VCs about your billion-dollar vision is critical. From sales strategies to hiring plans, to features and customer retention— every small detail needs to be explored and explained meticulously.

Wrapping Up

As we wrap up, remember that founding a startup is all about combining your passion with practical steps to achieve your dreams. And remember—you’re not alone. If you need a list of investor resources that are more inclusive for women-led businesses, feel free to contact me. Let’s join hands in bridging the gap, one step at a time!

Please reach out to me at hilda.mogi@mydomain.com for any queries or specific support in startup funding.


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