At a pitch competition for Philippine-based startups held in October this year, only one out of 10 of the pitching founders was female. Out of over 400 applicants, “only a handful” of female founders applied, the organizers shared.
At another international startup incubation program, in which I was a mentor, I noticed that the only other females in the room aside from me were the program team and another female mentor.
“Where are the female founders?” I found myself asking again. The answer was similar: “None applied.”
And just most recently, at a pitch competition for founders in the blockchain industry in the Philippines, there were–again–zero female founders. While there were all-women panels and diversity in the speaker roster, women were conspicuously absent at the pitches.
Underrepresented from the boardroom to the deal room
It’s not just at pitch competitions that females are underrepresented. Globally, only 2.3% of women-led startups received venture capital funding in 2020, which, experts suggest may be linked to the fact that “only about 12% of decision-makers at VC firms are women, and most firms still don’t have a single female partner… Of all partners at these firms, only 2.4% are female founding partners.” (Source: Harvard Business Review)
Even worse, a new study published in Organization Science and Forbes shares that receiving funding from female VCs may actually be detrimental to female founders. “Although investments from women may be slightly easier for female founders to obtain, these investments can lead to assumptions that the female entrepreneur received special treatment because of her gender. As a result, early investment from female investors can make it more difficult for female founders to obtain future funding.”
This puts female entrepreneurs in a double bind,” The Forbes piece states. “If they rely solely on funding from men, they are less likely to receive any funding. Alternatively, if female founders rely on funding from other women, then they are less likely to receive future funding. It’s a no-win situation.”
But: investing in women, diversity, and inclusion makes clear business sense
The gender gap is massive, yet the data show that diversity and inclusion from the founders’ table to the boardroom to the deal room actually provide better outcomes for everyone.
According to the Boston Consulting Group: “When women business owners pitch their ideas to investors for early-stage capital, they receive significantly less—a disparity that averages more than $1 million—than men. Yet businesses founded by women ultimately deliver higher revenue—more than twice as much per dollar invested—than those founded by men, making women-owned companies better investments for financial backers.”
Diversity and inclusion also create healthier organizations overall. According to the International Labour Organization (ILO), “When enterprises have an inclusive business culture and inclusive policies, the predicted probability of achieving:
- increased profitability and productivity among enterprises by 63%
- enhanced ability to attract and retain talent is 60%
- greater creativity innovation and openness is 59%
- enhanced company reputation is 58%
- better ability to gauge consumer interest and demand is 38%”
“When boards are gender-balanced, companies are almost 20% more likely to have enhanced business outcomes,” the ILO study also shares.
How might we create a more diverse and inclusive ecosystem–together?
The data on both sides are clear: We need more women (and all genders) at all levels of the business ecosystem–from founders to enterprise decision-makers, to investors, to policymakers–to achieve greater impact and better business outcomes for everyone.
Beyond the optics of gender diversity, however, we also need to encourage diverse voices at the table (and we need a much larger table–we need a community), and we need to be intentional about developing inclusive cultures in which diverse–even dissenting–viewpoints are heard, weighed, and even sought out and encouraged. Our increasingly volatile, uncertain, complex, and ambiguous environment calls for wildly creative and innovative approaches that we won’t get by using the same old ways of thinking, doing, and living.
So: how might we move forward from here?
At SparkImpact Ventures and our new programs, foundHER, and Girl, Make Your Move, we are opening the conversation and sparking collaborations with different groups to provide better support and open more doors for female founders, female-led organizations, and women at various stages in their lives.
The Philippine startup ecosystem has made significant inroads in enabling and empowering more female founders and VCs–thanks to female leaders leading the charge, such as Katrina Chan and QBO Innovation Hub, Quenby Go and the Manila Angel Investors Network (MAIN), Minette Navarrete and Kickstart Ventures, Amor Maclang and Digital Pilipinas; as well as some of breakout female founders: Stephanie Sy (Thinking Machines), Shawntel Martinez Nieto (Sustainable PH), Cindy Burdette (AllCare), Carmina Bayombong (InvestEd), and so many others. However, there’s still much more work ahead and we still have a long way to go.
As we close 2022 and prepare to welcome 2023, let’s ask ourselves: What is our vision of a healthy and thriving business ecosystem? What can we do to build that together, and who else needs to be involved? Let’s bust the doors wide open and shatter any glass ceilings, let’s get the conversation and action going, and let’s spark some serious impact together.
About the Author,
Niña Terol is 20+-year communication and corporate marketing veteran who has built and launched startups in the Philippines, the United States, and the Middle East. She recently founded SparkImpact Ventures, an innovation, inclusion, and impact solutions firm, which has sparked foundHER, a leadership program for female founders, and Girl, Make Your Move, an upcoming podcast sharing conversations on courage. She is also the Director for Impact & Growth at The Final Pitch, a hit business reality show airing on CNN Philippines.