Women entrepreneurs to face adversities while gaining capital for business

Studies have proven that women and especially women of colour earn less in comparison to men. However, women are also likely to get less capital for their business than their male counterparts.

A statistical study of 2018 determined that women acquired only a 2.2% share of the $130 billion of venture capital, this was $1 billion more than the previous year.

Furthermore, Crunchbase studies determined 17% of VC dollars was acquired by companies who had at least one female founder. This number however dropped to a mere 2% when the company had only female founders. Lendio study also further supported this fact, 24% of the businesses accessing capital in the previous year was owned by women.

“I have seen several female friends struggle to get their businesses off the ground due to lack of investment,” said Michelle Samad, CEO and founder of Incentive Technology Group.

Another survey of HSBC which included 1200 entrepreneurs with women in majority. The survey concluded that a third of the participants experienced issues related to gender bias when it came to raising capital.

In the West especially, 46% women of American entrepreneurs faced gender bias, whereas 54% of women in the UK. In addition, women reported that they had to answer invasive questions about their personal lives, instead of their business idea.

The survey attributed the reasons to several factors such as, women were regarded more conservative in valuing their businesses. In some cases, it is also because of the bias on part of the investors.

“The biases are palpable. Investors can see our businesses as projects, and block themselves from seeing the big vision in the way they would for a male-led startup,” said Alexandra Shadrow, co-founder and CEO of Relovv, a clothing sales app. “Women need way more proof of concept and traction than their male counterparts in order to convince VCs to invest.”