Why Only 10% of VC-Backed Startups Are Led By Women
To the naked eye, it was obvious that participants of last week’s Startup Weekend EDU, a 54-hour experiential program on how to create a startup in education, was overwhelmingly male. But, audience favorites and the ultimate winner were all women-led teams. By targeting a women-dominated field – education – Startup Weekend EDU created a platform where women’s subject matter expertise could be scaled for influence and authority in creating new education startups. This is a model worth replicating.
The concept of “women in business” attracts media attention because businesswomen strengthen the economy and serve as an indicator of our progress in gender equality. A 2008 study found that women-owned businesses have an economic impact of $3 trillion and produce employment for 23 million Americans, or 16% of the workforce. Research shows that women run businesses more efficiently and make them 30% more profitable.
Women’s impact on business may be understood but their representation remains low. Male students constitute two-thirds of every business school. Women occupy only 16% of boardroom seats in Fortune 500 companies, 25% of CEO chairs, and only 10% of venture-backed startups. Many theories float around about why this inequality exists, including the fact that fewer women have technical backgrounds (and investors tend to put their money in core technical areas), women have less confidence about their own abilities, and an “old boys” network dominates parts of the business world. Despite these differences, there does seem to be agreement on one thing: Women need more training.
Several committed groups have stepped in to give women the education, networking, and mentorship to make them successful entrepreneurs and businesswomen. Forte Foundation specifically targets women candidates for business school; Women 2.0 (led by tech expert Shaherose Charania) seeks to “inform, inspire, and educate a new generation of females that are entrepreneurial and successful;" and startup incubators like i/o ventures create unique programs to help promising women start a new business. There are even opportunities like the Pipeline Fellowship that creates angel investors out of high-achieving women in diverse fields, including law and philanthropy. These organizers are driven by the belief that women need an extra boost to unleash their full potential in business.
Such women-focused efforts draw a fair amount of criticism, however. Penelope Trunk, the Meryl Streep of career blogging, ignited an internet spat over her article “Stop Telling Women To Do Startups.” She repudiates the idea that women face structural impediments to achieving as much as men, attributing differences in income to women’s decision to choose “children over startups.” While few agree that women have equal opportunities, many do agree that “ghettoizing” women in single gender efforts do not account for women’s diversity of strengths, interests, and abilities and simply reinforces the sharp binary between men and women in the workplace.
Amidst this debate, we should pay attention to under-the-radar models like Startup Weekend EDU which offer a solution worth replicating: invest in professional areas like education and nursing where women are better represented. Startup Weekend EDU is a spin on the virally popular Startup Weekend, and it specifically empowers educators to translate their classroom experience into a viable enterprise. Given that 76% of public school teachers are female, education is a prime place to identify, nurture, and train a cohort of women with a proclivity towards enterprise and a commitment to double a bottom line. The success of this approach was proven this weekend: Three of the audience finalists were women, and the first place winner was a female Teach For America teacher who showed an incredible aptitude for business.
Startup Weekend EDU is not a gendered approach to entrepreneurship, nor is it trying to be. Yet it was still effective in promoting women’s entrepreneurship by nurturing a field where women are well represented and, as primary caregivers in many households with children, more invested. This is not to say that this approach can exist on its own. However, by targeting women-heavy fields, like nursing and caregiving, we avoid the pitfalls of lumping women in one category and are better able to identify the specific women for whom entrepreneurship training will make them the next Catarina Fake (don’t actually know who that is? Click here).
Photo Credit: Library of Congress