With my background in tech journalism and recent experience of working with Miller Center, where I lead our women-led affinity group that has 25 women running their social enterprises, I had a chance to reflect on the issues, problems, and opportunities of both sectors.
Last month, I attended The Next Web Conference in Amsterdam and represented Miller Center For Social Entrepreneurship at their The Next Women track. The conference brought together 12,500 attendees and 3,500 companies from all over the world. For me, it was a delightful experience to meet and greet women from the tech sector, women social entrepreneurs who are using tech to solve social issues, and other stakeholders who all share the vision to make this world a better place to live.
The conference also hosted 2019 Chivas Venture – a social startup competition that gives away $1m in no-strings-attached funding to businesses who blend profit with purpose to have a positive impact on the world. From 20 global finalists, Mexico’s Xilinat walked away with the largest amount of funding, receiving $310,000, following a live pitch at the conference.
Xilinat is on a mission to convert agricultural waste into a natural sugar substitute that looks and tastes like normal sugar yet is low in calories; helping tackle obesity while providing a sustainable alternative for diabetics and the health-conscious.
During multiple discussions with social entrepreneurs who pitched at the conference, investors and general attendees, I curated some high-level conclusions of the problems and issues after that conference.
Women Representation in Social Sector is Far Better
The serious underrepresentation of women in the tech industry is always in the news. All big companies in Silicon Valley are fighting for it but the stats are much better for the social sector. The social enterprise or non-profit model has women representation in ever-greater numbers: 38 percent of social ventures are now led by women, while there are more than twice as many men than women in conventional business. In other news quoted by Independent, More than 90 percent of companies that are tackling social problems have at least one woman on their leadership team, as opposed to almost half of small or medium-sized enterprises (SMEs) that have all-male directors.
The numbers are not surprising, though. Due to their compassionate and empathetic nature, women tend to start a business that is close to their heart, have more passion involved and/or tackle any global or local issues of their country or community. These traits are certainly not gender-specific but they create a pattern.
By leveraging women representation in the social sector, we can also fix the gender gap in the tech industry. More technological solutions to solve the world’s problems is just one way to do it.
Access to Capital
As per Kauffman Research, women entrepreneurs face three challenges for their firms: a lack of mentors, their view of success and failure, and a financing gap. Access to capital in both sectors is an issue. It’s not just in the United States— last year, in Europe, 93% of technology investments went to all-male founding teams. On the other hand, despite the fact that women tend to run more social enterprises with a non-profit model as compared to men, a significant issue has been overlooked – namely, investment in women-led social enterprises. According to studies, 45% of women entrepreneurs report access to capital as one of the major barriers to sustaining an enterprise, compared with 36% of men.
Over the years, impact investors and gender-lens investors emerged as strong beneficiaries to help women entrepreneurs raise the capital but the gap is still too big in both sectors.
Access to Mentors and Role Models
While having a candid discussion with representatives of Startup Genome who released their Global Startup Ecosystem Report based on primary and secondary data from over 10,000 founders and more than one million companies across over 150 cities worldwide, we discussed the barriers on why women representation is still a question mark in many countries and sector.
One of the highlights of the discussion was the inaccessibility of mentors and role models in respective industries. You don’t become what you don’t see. In the United States, only 43 percent of managers are women and less than 19 percent of corporate board members are women. The mentorship comes from someone who has been through the journey and the leadership gap is one of the main barriers for women entrepreneurs to access mentorship and role models.
Having men mentors in your entrepreneurial journey is not wrong but having role models and mentors who have been through the same journey, helps them get acclimated and gives a feeling of being connected on a level where they can bat around strategies and also get some counsel on their personal and professional goals.
This issue takes us back to where we all started gaining knowledge about things, i.e, childhood. As a kid, girls have always been pinkified with the gifts that sometimes only include dolls, dollhouses, make-up products, cutlery sets and what not. Whereas, the gifts boys get are toy cars, hoverboards, and gadgets. Psychologically, men are pushed from an early stage to ‘be a man’ and take risks whereas girls are taught to ‘act like a girl’ and be more submissive.
All these psychological conditioning have impacted the way we see entrepreneurship trends these days where self-confidence is a major issue faced by women entrepreneurs. Women founders see themselves less capable of running a company and hold themselves off many times. Whereas, Men tend to grab more risk-oriented business opportunities, are more likely to start a business with profits in mind, and have higher expectations for their business in terms of money, size, and rate of growth. Thinking big and embracing risk is more common among male entrepreneurs.
Social entrepreneurship still has a better rate of women entrepreneurs gaining momentum as compared to the tech industry because women often launch their businesses to gain growth instead of wealth. Women social entrepreneurs prefer lower risk opportunities, smaller returns with better impact, and a more localized customer base.
The more I talk to entrepreneurs (men and women) from both sectors about the issue of gender equality and bias, the more I stand firm on the point that it is an issue regardless of which sector you work in. The call for change in both sectors is the same hence the collaboration between them is necessary. In some countries, women entrepreneurs are only mentored but not funded. In some parts of the world, access to funding and funding itself is nowhere to be found.
If we increase the share of women representation in leadership positions in both sectors, make funding accessible and easy, create a strong pipeline for mentors access and last but not the least, make our girls bold, brave and risk taker from an early age, we will see tangible rewards that will benefit not just women but the entire society.