Startups that are founded, run, or owned by women are a rarity. In Germany, only about 15% of startups are initiated by women and this number is not the result of steady growth. Instead, the figure has been stagnant for years. Additionally, female-led startups receive significantly less Venture Capital than those owned by men. This is a shame, considering data shows that startups founded by women achieve higher revenues and are therefore the more attractive investment.
We at Wayra uses our resources and influence as a corporate accelerator to bring more diversity to the startup world by explicitly supporting female entrepreneurship in multiple ways.
Executive Summary
- While female entrepreneurs on average receive less than half the funding that male entrepreneurs receive, female-founded startups generate 10% more revenue and are twice as attractive a financial investment as male-founded startups.
- Women receive less funding because they are less confident and bold when it comes to presenting their ideas and asking for money. They often offer solutions for problems that investors do not see potential in.
- Corporate accelerators have the potential to counteract the gender investment gap: We offer mentorship, coaching and education opportunities to women and has made diversity a KPI.
Female entrepreneurship and funding in numbers
To examine the extent of the gap and determine opportunities to counteract, the so-called gender investment gap was investigated. They found out that
- Women who pitch their ideas in early stages, in average receive 935,000 dollars – while men receive 2.1 million dollars.
- Despite this enormous difference in funding, startups that are founded or co-founded by women perform better over time: They generate 10 % more in cumulative revenue over a period of five years.
- Female-founded startups are also better financial investments, generating 78 cents for every dollar of funding, while male-founded startups only generate less than half of that, at just 31 cents.
Why female entrepreneurs receive less funding
Looking at the results of the investigation, one wonders what the reasons may be for big companies handling their funds the way they do. A few causes are easy to identify:
- When women present tech-related ideas, investors often presume they lack the technical knowledge and therefore take them less seriously. When confronted with negative feedback, female founders are more likely to accept it as constructive criticism, while male founders are more likely to fight back.
- Men are also more confident when presenting pitches and tend to make bold projections, whereas women are more conservative and usually ask for less money.
- Most funders are male and have little to no familiarity to the ideas female entrepreneurs are pitching. Women often draw their ideas from their own lives and struggles. The solutions they come up with are quite frequently aimed at other women or children – business areas that men struggle to see a need or potential in.
How the corporate accelerator Wayra aims at supporting female-founded startups
Telefónica’s Open Innovation Hub Wayra Germany is co-led by CSO Katrin Bacic and she is not the only woman on our team: 50 % of the German Wayra workforce is female. Diversity is part of our strategy – both inside and outside the company. We have found ways to support female entrepreneurship in a manner that other corporate accelerators can easily pick up on:
- Diversity as a Key Performance Indicator
Each Venture Development Manager is obliged to scout female-led startups for our accelerator program.
- Mentorship for female entrepreneurs
Our CSO Katrin Bacic is part of the mentorship programs Stealth Mode and Women in AI & Robotics Germany.
- Customized coaching
We offer customized coaching to founders that is tailored to their needs when they join the accelerator program. Katrin Bacic also offers free 30-minute coaching sessions to women in tech with potential follow-up meetings. To book one of her coaching sessions, just click here.
- Data training opportunities
Part of our portfolio is Stackfuel, for which scholarships are awarded. Stackfuel offers data training to support women in finding new career opportunities. In cooperation with Telefónica, we have sponsored the trainings to become a data analyst. Click here to apply.
Wayra is committed to supporting female entrepreneurship not only out of personal conviction but based on experience that matches the findings of various studies: Teams that are at least partly female are more successful and work more sustainably.
