Women struggle to find funds for business, investors still under hold of patriarchy

Women struggle to find funds for business, investors still under hold of patriarchy

It is not easy to be a woman entrepreneur. It is not simply a question of entering domains that were considered exclusive to males and engaging in activities that only males were held to have the capability to carry out. Women have been breaking into male bastions pretty regularly, but even when they do, they find their paths riddled with thorns. And this happens as a result of society’s attitude towards women that no amount of modern education and awareness has been able to improve fully.

For a woman entrepreneur, therefore, problems arise at the level of funding too where there is a clear gender bias. Financial Express cited a recent study to show that less than 3% of the global venture capital was invested in women-led teams in 2017. For emerging markets, the figure is slightly better, but not much. In these markets, 7% of the private equity and venture capital funding goes to female-led businesses.

This is apart from the derogatory sexist remarks women entrepreneurs have to face. They are often asked if they have a male co-founder, ignored in favour of male members of the team, and made to clarify childbearing plans. At every step, she is made to realise that it is not easy for society to accept her presence in a predominantly male realm.

Usually, the willingness of an investor to support women-led businesses is correlated to the presence of women and gender balance in the investor’s team. These are hard to find in the private equity and venture capital industry which suffers from very low levels of gender diversity at both regional and global levels. According to the study quoted by Financial Express, only 11% of senior investment professionals in these investment firms are women and only 15% of senior investment teams possess gender balance (which means they have one-third or more female members).

It is extremely difficult for women-led businesses to raise subsequent funding. When they do succeed in getting subsequent funding it is because the female lead has been replaced by a man. So even when they get initial funding, women-led businesses find that the going gets significantly tougher in the long run.

Accordingly, there are only a few women entrepreneurs who are really successful. The National Sample Survey reports that 14% of businesses in India are run by female entrepreneurs – of these, more than 70% have an annual turnover of up to Rs 10 lakh and employ five people or less.

A solution to this could be women-only funds and funds that will invest only in female-led businesses. But the lack of a sufficient number of candidates makes it a slightly challenging commercial proposition. Another approach involves special initiatives for women entrepreneurs including access to finance, mentorship and capacity building.

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