Top VCs discuss whether the pitch process is failing female entrepreneurs

by Startacus Admin

 

Insights from Speedinvest, Amplifier, La Famiglia and Redstone, four of Europe’s leading early stage venture funds, on current VC funding for female founders and what changes are needed

Overall VC investments in 2020 are at par with previous years – but in Q3 2020, venture capital funding for all female founders is on pace for its worst year since 2017(US data). In the week of Global Women's Entrepreneurship Day, four of Europe’s leading early stage venture funds (Speedinvest, Amplifier, La Famiglia and Redstone) got together to look into the reasons behind the grim statistics and explore what changes need to take place for more female entrepreneurs to get to a term sheet.

The overall atmosphere in the pitching process can impact women negatively - even more so than the explicit questions. “If you are a female entrepreneur, sitting in a room that is purely male-dominated, it affects the way you feel – you don’t feel relaxed, seen or represented. It is much more difficult to succeed in this environment.” – shared Marie-Hélène Ametsreiter, partner at Speedinvest, quoting a female entrepreneur from the firm's Portfolio.

The 'Ecosystem' panel moderated by Tzvete Doncheva, referenced research that found the questions female founders are asked indeed differ in framing – men tend to be questioned more about the opportunity and women about the risk.

Mohamed Foulser, investor at Redstone, commented, "It’s a confidence thing – walking into a room confident, you would be less likely to be asked tough questions once you show you are able to defend yourself from the initial part.”

Namratha Kothapalli, senior associate at Speedinvest, also shared details about the firm's internal initiative aimed to improve the diversity of the portfolio.  

By being intentional about increasing the number of women on their investment teams and acknowledging the diverse talent around them, senior decision-makers in venture can contribute to changing the grim statistics.

Furthermore, working on removing the ‘access barrier’ will enable more women to start and succeed in business.

"The reason why I went into entrepreneurship is because it suddenly moved into the sphere of my own network. The problem we should be solving is for women to be connected to other entrepreneurs. Those can be other women, but don't have to be women - let's not forget that."– shared Judith Dada, partner at La Famiglia.

Marie-Hélène added: "One of the most important issues at stake here is network and is where many female founders miss out. They are so concentrated on the facts, building the business and working on the product, rather than building out these relationships that are so valuable. It will probably be my number one advice : Spend a fraction of your time and put it in your calendars to build up the network that can recommend you directly to investors."

Helping less networked founders overcome the ‘warm intro’ barrier and thus broadening access to venture capital is also one of the aims of Doncheva’s ‘Ecosystem’ project.  

Although there is a long way to go, the speakers noted a shift within the industry has already taken place – and stressed that five years ago, a panel on this topic would not have been possible. There was also a uniform agreement that men should be actively involved in similar conversations to make a meaningful impact.

Venture capital investment is a driver of economic growth, fueling both innovation and job creation. When designing the future world, it should reflect the entire population – and to do that, diversity of thought on both sides of the table is needed.

 

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Published on: 26th November 2020