According to the 2020/21 GEM Women’s Entrepreneurship Report, women account for half of the entrepreneurial activity globally. However, those activities tend to remain at a very small scale, impacting the women entrepreneurs and their immediate family, often not becoming growing companies that create jobs and employment opportunities for others due to lack of support and financing.
Having a closer look at the universe of tech-based, scalable companies, which is what the SECO-powered Swiss Entrepreneurship Program (Swiss EP) focuses on, the picture is not much brighter. A study by Startup Genome indicates, that about 10.8% of tech startups in Europe have a female founder and globally, only about 3% of female-led startups capture venture capital (VC) funding, which is crucial for further growth of the company.1
The program’s own data, collected every 6 months for 7 years, shows that women account for 40% of the startup workforce (data 2022), however, only 7% of the capital raised by Swiss EP supported startups go to companies with a female founder in the team – which is again a constraint to growth.
Why is that? Is it because women in general face a lot of cultural and societal constraints, making it difficult for them to manage expectations of family life as well as professional aspirations?
The Swiss Entrepreneurship Program (Swiss EP) has been supporting local initiatives and start-up support organisations since 2015 so that they can offer better services to founders. Swiss EP’s goals include creating future-oriented workspaces, making it easier for businesses to access investment and improving support mechanisms at every stage of the growth cycle. They achieve them by strengthening local business ecosystems in Peru, Vietnam, Serbia, Albania, Bosnia and Herzegovina, North Macedonia and Kosovo.
The Swiss Entrepreneurship Program is financed by the State Secretariat for Economic Affairs (SECO) and implemented by Swisscontact.
Besides the fact that gender bias starts as early as childhood, continues at school and university with different expectations on behaviour for girls and boys, several studies indicate, that whether subconsciously or consciously, men can relate better to other men and value men’s input over that of women.2 Given that the business world is still male dominated, that there are much more male than female investors, the result is more VC money is invested in male-led companies.
An interesting research by Dana Kanze comes to the conclusion that during startup pitches to investors, female founders get rather defensive questions, pointing at risks and problems with their business models compared to male founders who are more often asked about the opportunity they see in their product and business models.
An interesting statistic was presented in the latest Swiss Startup Radar. Female CEOs hire significantly more women than their male counterparts (44% compared to only 9%). This begs the question of why women seem to be able to hire based on competency, yet men hire rather based on relatability.
So how can this be challenged and changed? Startup ecosystems and economies overall need more female role models - as founders, CEOs, investors or in other decision-making roles – to have a critical mass in order to undermine the bias and provide equal opportunities.
From its early days, Swiss EP has had a focus on enabling more female founders to participate in entrepreneurial ecosystems and to start successful companies. The first step was as simple as it was effective: Bringing them together. Showing female founders that they are not alone, that they face similar issues and that the entrepreneurs are in the best position to support other entrepreneurs. One example is the Women Entrepreneurs Week (WEW), inviting promising female founders, mentors and investors from all 7 countries where the program is operating for a weeklong exchange and joint learning. The first WEW was held in 2017 when hardly any organized networks existed. In the course of time, programs focusing on women were established (WISE in Vietnam and Women STEM in Peru) as well as several founder networks that evolved out of Swiss EPs facilitation role, such as Preduzimanje focusing on Serbia and Bosnia-Herzegovina, Womenpreneurs in North Macedonia and women founders in Albania or Kosovo. They all have the same goal to provide education and a platform for female founders to meet, exchange experiences and in the best case, do business together and invest in other (female founder) companies. This strengthens ties among each other, increases confidence and makes them successful business leaders that can lead the way forward for the next generation.
In conclusion, while the current gap is wide, ecosystem builders who have been present since the earlier days of emerging ecosystems can attest to the growth of support and success stories of women founders and supporters. This is also indicative of the long road ahead, where all hands on deck will be needed to continue closing the gap, especially in the funding space, so that globally we can harness the entrepreneurial spirit of women everywhere to create better solutions, job opportunities, and inclusive growth.
Camila Cordero, Arta Istrefi-Jahja, Ivana Sabo, Jakob Modéer, Hub Langstaff