Why is it Challenging for Women Entrepreneurs to get Funding

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It’s hard to be an entrepreneur when you’re a female trying to make a mark in a male-dominated space. Yes, men make up 86% of Indian entrepreneurship and hence the obstacles for female entrepreneurs are many and the mountains are bigger to climb. It’s no wonder then that women make up only 14 percent of India’s overall entrepreneurs, according to the 2018 Ministry of Statistics and Program Implementation’s Sixth Economic Census. 

What does the Recent Study say?

In support of this claim, a recent study by HSBC Private Banking, She’s The Company, released figures. According to the study, more than one-third of female entrepreneurs are facing gender bias when increasing business capital. It is critical in such a scenario that women do not bog down and pass on to men the role of leadership. 

The lack of female investors and mentors in India is another major reason for women facing difficulties in raising funds.   

India’s number of female VCs is minuscule. Men may not always properly understand the perspective of a woman. Shared experiences and ambitions between female investors and entrepreneurs can at least address the gender bias issue in the funding process.

Capital Funding is Undoubtedly Hard to Achieve:

Whatever your gender, it’s challenging to get capital for business ventures. The overall approval rate is only about 50%. While female entrepreneurs are clearly at a gender disadvantage, in this area, even male entrepreneurs are having a difficult time. Venture capitalists are in the business of taking chances, but they are also careful about the risks they take. Gaining equity financing can, therefore, be daunting regardless of whether or not you are a female entrepreneur.

False Stereotypes are Hard to Overcome:

Who comes to your mind when you think of successful entrepreneurs? Probably not a businesswoman. The fact of the matter is that they usually depict successful entrepreneurs as people. To some extent, an entrepreneur’s male identity is perpetuated by actions of self-fulfilment. Women’s entrepreneurial past is more minimal, and it’s hard to change a prototypical entrepreneur’s public image overnight. So long as most businessmen are viewed as men, women’s access to capital will continue to struggle.

We still live among Biases, Funding seems a far fetched dream:

Biases are often subconscious, as demonstrated by the female investors in the study who viewed female entrepreneurs as higher risk. In believing something that is not true, people can be socialized. This is the case when it comes to entrepreneurship for women. If for a long period of time there are false beliefs, people may not even be aware that they exist. Therefore, the challenge facing women is not only to resolve prejudices, but also to make others aware of them. It’s not an easy task, as history has shown.

What Can We Do?

Society can and should do a better job of encouraging women who want to be risk-takers to follow their dreams.

The time is definitely changing. The good news is that the world of venture capital investing is shifting. Besides the number of women in venture capital firms, some female entrepreneurs are setting up their own investment firms. Many seek to specifically support women’s entrepreneurship by understanding the investment struggles women have had. Without these resources, given the success of businesswomen, the prospect of female entrepreneurship should be quite interesting and the day is not far when female entrepreneurs would easily get the desired funding for their startups.

We at CO-OFFIZ encourage more and more females to enter into entrepreneurship like our co-founders. 

Let’s talk in person. You’re welcome!

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