Tech Manchester has become an integral part of the SME and startup support community in Greater Manchester since its inception just over two years ago.
Since then, Tech Manchester’s Executive Director Patricia Keating has made it the organisation’s mission to spearhead initiatives that increase support and resources available to startups in the region. Today, she shares her thoughts on a topic that is all too familiar but absolutely essential to discuss.
Here’s what Patricia believes can be done to bridge the gender gap when it comes to investment in tech companies.
Did you know that only 5% of pitch decks that reach Venture Capital (VC) firms are from all-female founded teams? And only a further 20% of investment is won by mixed-gender founding teams? This results in just one pence of every pound of equity funding raised for tech startups going to an all-female founded team.
There are several contributing factors to these statistics. These include the small percentage (18%) of females in professional tech roles and the small number of women in investment teams.
But it doesn’t stop the facts reflecting the reality of both tech and investment ecosystems: The scales are quite clearly, and significantly, out of balance.
And although women-led companies don’t need special treatment, we do need to approach the topic of investment in a different way. We have a huge challenge to overcome in the tech sector. Encouraging more women to pursue a career in technology is essential, but we must also encourage more to build their own companies AND seek investment.
While some forward-thinking VCs are already trying to tackle this issue, there are many that remain unaware, and therefore, are part of the problem. So, what can we do as two closely intertwined industries – tech and investment – to address the imbalance?
We invest in companies that we believe in, and that requires a level of understanding and the empathy that comes with shared experiences. How can we expect investment boards to see the ventures of women and the ventures of men equally without equal representation of genders on these teams?
Time has shown again and again that female VC advisors are more likely to be able to identify promising female companies than male VC advisors. We must have successful female entrepreneurs filling non-executive roles on investment firms’ boards of directors.
If you’re an investment company, aim to have an equal gender split. Compliment this with having equal successful men and women entrepreneurs on the advisory board.
Grassroots research shows that the vast majority of female VCs are involved primarily in early-stage, seed and series A funding. This in itself is down to a number of issues. But the truth is that for female-founded companies to achieve series B or growth investment, there must be female VCs involved at these stages.
Investment teams must engage more with early-stage incubators during the pre-funding stages of tech startups. Get yourself involved in a mentoring capacity to help support, encourage confidence building and instil aspiration in female founders. Both men and women working with female founders can help to do this.
We must employ better communication training from female-led communications agencies. This will enable an enhanced understanding of the language that must be used to encourage more females to pursue investment and what impact changing communication styles has when speaking to different genders.
Provide funding workshops specifically for women, delivered by men and women from VC funds. This will achieve greater balance when it comes to those in business, who are aware of the different investment routes and guidance on how to win funding.
Roundtables with female founders who have been on the VC circuit are also a great tool. These enable the sharing of first-hand experiences which investment and tech professionals alike can use to identify patterns of experiences and obstacles. Only then can we begin addressing the issues in full.
These ideas require courage to truly invest in, but, as Albert Einstein once said: “The definition of insanity is doing the same thing over and over again, but expecting different results.” To deliver change we must start to do things differently.
Want to read more expert insight on a range of cool topics? Check out our range of guest blogs now!