“Endemic bias is a problem women entrepreneurs should no longer face.”
So says a new report from international consulting firm PricewaterhouseCoopers in conjunction with The Crowdfunding Center not only provides data that shows the success women are having as entrepreneurs in raising crowdfunding but also provides recommendations on how women, governments, agencies, investors, educators and men can help drive more diversity in startup funding.
However, many of these steps also deserve to be considered to drive further diversity in startups for minorities.
The venture industry is notorious for its lack of inclusion when it comes to female and minority executives. The tech industry itself continues to struggle with diversity issues.
Perhaps the success women are demonstrating in crowdfunding will help pry open doors of opportunity that have been closed for too long.
Here’s a look.
- “Action steps you can take”
From the report:
“Crowdfunding is fundamentally about communication and about stories. It’s about nurturing relationships and persuading a crowd of people to come on a journey with you. That journey doesn’t end when your project is successfully crowdfunded: successful entrepreneurs maintain those relationships, and use their crowd to unlock growth, relationships, research, development and value in their businesses.
“What the data in this report shows clearly is that opportunities for women entrepreneurs have not been equal, but thanks to crowdfunding, entrepreneurs can now access the market directly – and this makes a huge difference.
“Endemic bias is a problem women entrepreneurs should no longer face. Eradicating these barriers provides opportunities that will benefit women and men, business, and society.We call on governments, funders, business advisors and businesses of all sizes to seize this opportunity to identify, quantify and remove the grey-suit-factor.”
- “Actions for female entrepreneurs”
Here are calls to action from the report:
- Despite similar levels of education and experience, less than half of women feel confident they can start a business compared to two-thirds of men. Men show more positive perceptions about opportunities and their own capabilities, as well as lower fear of failure. Women should be inspired by the positive findings of this research to realise their potential and fuel their confidence and understand the opportunities that seed crowdfunding presents them
- Be confident to use seed crowdfunding, as a tool of choice, to secure positive cashflow and market validation
- Seek and participate in women-focused incubators, accelerators and platforms such as Allbright and The Crowdfunding Centre’s business funding accelerator for women;
- Start or continue backing crowdfunded projects: some of the most crucial lessons about how to run a successful crowdfunding campaign and launch a thriving business come from being a supporter of crowdfunded projects
- “Actions for education and business support organizations”
The report notes that many parties need to participate if equality is to stand a chance:
- Add seed-crowdfunding, as well as the other forms, to their funding toolkit, alongside more traditional debt, equity and grant based options, by ensuring that all client facing advisors have a clear understanding of the models, the business scenario to which they apply and how they can also support more traditional forms of funding
- Provide training to (aspiring) women entrepreneurs for them to improve their pitching skills, media engagement planning, and internet marketing
- Embed crowdfunding within the curriculum of business support programmes and the academic curriculums of all entrepreneurship programmes
- “Actions for men and women”
As for you men …
“For those of you already supporting crowdfunding campaigns, be more gender aware as you consider the campaigns you’d like to fund, and feel empowered by the findings of this research to become a champion of female crowdfunders.
“For those of you unfamiliar with the world of crowdfunding, explore the opportunities it presents you to become a mini-VC and, in particular, the opportunity for more women to champion growing and startup businesses by stepping into roles which were formerly exclusive to investors.”
- Actions for financial institutions, banks, and venture capital firms
For the decision makers at the firms that make the VC industry work:
- Measure and audit, on at least an annual basis lending and funding patterns from a gender perspective to unearth potential systemic biases
- Consciously adjust your perceptions of risk when it comes to investing in women entrepreneurs and businesspeople
- Understand that experience of crowdfunding offers businesses a competitive advantage
- Give businesses who have used crowdfunding credit for the market validation and customer understanding they have generated
- Create more funds to invest in start-ups run by women
- Train decision makers on unconscious bias and its implication on decision making and build awareness of female entrepreneurial success stories
- “Actions for Governments”
Governments, too, play a role:
“Promote crowdfunding as a way for women-led initiatives to fundraise and increase visibility and platforms to connect willing investors with women-led initiatives.”
It’s long past time for EVERYONE to get to work on the diversity in VC.
Read the full report at: