Five changes that would boost female-led start-ups
While research shows Australian women are among the most entrepreneurial in the world, they continue to be underrepresented in major sectors such as finance and information technology.
Other challenges – such as access to funding and the public standing of female business leaders – also continue to impact women.
This International Women’s Day, the question remains – how does Australia encourage more women to start businesses, particularly in these sectors?
StartupSmart spoke to a range of industry experts and players to determine five changes that would potentially boost female-led start-ups.
1. Better access to capital and contracts
“Access to capital is the number one issue,” says Yolanda Vega, chief executive of the Australian Women Chamber of Commerce & Industry.
“Women who start up a business are not able to access capital because the majority are in service-based industries, so lenders won’t take the risk.
“Angel investors are not interested in service-based companies, and for VCs it’s too early in the piece.
“Because they don’t have access to capital, they’re starting up with their own money. Our research shows the majority – almost 80% – are starting up their business with less than $5,000.
“If you don’t have access to capital, you don’t have access to market. If you’ve got a great product and the market doesn’t know about it, you can’t grow your business.”
Vega also believes female entrepreneurs have less access to contracts.
“Say you’ve started up a company and maybe you’ve been running for two years. The corporates are too focused on getting women on boards and ignoring the external supply chain, which are these women that used to work for them,” she says.
“Local, state and federal governments are so archaic in the way they engage suppliers that they’re failing to acknowledge the growing number of women business owners.
“Governments won’t deal with sole traders, and more than 40% of women are sole traders, and they won’t deal with small companies.
“We need to ensure we support women because women provide the majority of these services.”
2. A female-friendly approach to fundraising
“I’m thinking it’s things like this new women-only venture fund [Springboard Australia] where women are supported in whatever stage they’re at,” says Polly McGee, founder of the Mumpreneur IDEAS program.
“Is there a need to be flying all around the world, doing deals and working at ridiculous hours? … Maybe [we need] more women who steadfastly refuse to play the game in that way.
“There have been so many reports commissioned of why women aren’t participating and trying to get on board, but of lot of women choose not to go through that.
“Most women in their twenties and thirties don’t want to stand in front of a group of venture capitalists and pitch because they’ve never been given the confidence to do that.
“We need a set-up where we can stand up and feel we can speak confidently about what we do and who are.”
Rebekah Campbell, who founded Posse, says there needs to be more female investors.
“I first pitched at Innovation Bay and in the room of 40 or so investors there was only one woman. It was a bit weird,” Campbell says.
“I think that more women investors would encourage the development of women-led companies designed by women.
“We need more women to design products because they’d have a different perspective – imagine how different dating sites would be if a woman designed one!”
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3. Support from family and other women
“Women supporting other women who have become successful [could boost female-led start-ups]… Gaining some insight about women, from women, is necessary,” says McGee.
Wendy Simpson, who heads up Springboard Australia, believes families also have a key part to play in boosting female entrepreneurship.
“When a woman goes to her family and says, ‘I want to start this business’, more families should say, ‘That’s great’. Too often families are saying, ‘What do you want to do that for?’” she says.
4. Ditch the tall poppy syndrome
“We all know… it takes a whole business community to raise up an entrepreneur. And yet there’s sometimes a mindset of ‘I did it all by myself’,” says Simpson.
“Women tend to shy away [because of that perception] because they often prefer to work in a team. We need to redefine what it means to be a successful entrepreneur.
“When we had the US visitors coming out to visit Australia [for the Springboard program], one of the things they noticed was Australia tells people to be humble and keep a low profile.
“Women who do celebrate their achievements… are told to curb their enthusiasm and stop being tall poppies. How does that help the economy?”
5. More emphasis on tech skills
“Most tech companies are founded by engineers and there’s hardly any female engineers,” says Campbell.
“When I was at school all the smart kids studied French, history and Latin, so that’s what I took.
“I would have loved to learn more about computers but I went to a girls’ school and it wasn’t really an option so I never thought about it as a career.
“I wish I could write code – it would make life so much easier.”