Gender Bias in Start-Ups - Does It Still Exist?

By Sachi Kulkarni

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Business is booming, and start-ups are multiplying by the dozen. In the UK itself, in the tax year 2018/19, 672,890 new companies were founded (Gov.uk, 2019). Entrepreneurship is in demand, and it’s growing fast. With the amount of ideas and dynamic people out there, who are constantly innovating and working towards bringing new commodities to the public, there’s no doubt that creating a business is more than just a eureka moment. However, there’s so many other factors that govern and build a fantastic business. Finding the right amount of capital, the right people and the right time to break into the market makes entrepreneurship a difficult journey for even the strongest minds. However, there is a huge disparity between who is given these opportunities, and how welcomed they are into the start-up market. Women, and especially women of colour, have more barriers to entry. Already the workplace has put them at a disadvantage, and the entrepreneurial world does too. The truth is gender biases and even racial biases exist heavily in start-up culture.

Start-up culture is difficult to define in itself, as each start-up has its own distinct culture, revolving around identity, growth strategy and relationships. Start-up founders struggle to figure out their corporate culture at the beginning of their company journey (McAveeney, 2013). There is a certain gap in understanding when it comes to how deeply culture affects the organisation, and also how the organisation is presented to the rest of the world.

Gender is one of the biggest dividing factors in the start-up world. The technology sector especially has a difficult time retaining and attracting women in the start-up world, due to what is known as the ‘digital gender gap’. This speaks of women and girls lacking the facilities to access information or the skills to use digital means in an effective manner. It’s not just this though. Women are less likely to be inventors, recipients of seed funding and investors (UNESCO, 2020). Women may be in regular roles in the company, but they aren’t given importance in money-related matters in the company and are perhaps more unlikely to be given funding. Women-founded businesses have begun to make more money than their male counterparts but keep receiving less funding. According to a study by Crunchbase, male-only founders raised $195 billion, versus female-only founders raising just $6 billion in 2019. Even more concerning, female founders that had male cofounders had an advantage at $20.9 billion (Crunchbase, 2020).

There is a silver lining though. Across the board, women are receiving more funding at almost every funding stage, setting the basis for what could be coming in the future. It shows that perhaps, eventually, female founded companies will raise more at later stages in the funding journey (Crunchbase, 2020). It’s important that companies take a firm stance on the gender gaps, not just for female founders, but for the women working in leadership and money related roles in start-up firms.

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Key Takeaways

· The effect of Startup Culture is an enigma

· Women receive less funding than their male counterparts in start-ups

· However, women are now receiving more funding in every stage than before

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References

1. Crunchbase, 2020. Funding To Female Founders Report. [online] About.crunchbase.com. Available at: <http://about.crunchbase.com/wp-content/uploads/2020/03/Funding-To-Female-Founders_Report.pdf> [Accessed 26 July 2020].

2. Garrett, B., 2020. There’S Still A $189 Billion Gender Gap In Startup Funding—But Efforts To Move The Needle Are Stronger Than Ever. [online] Forbes. Available at: <https://www.forbes.com/sites/briannegarrett/2020/03/04/theres-still-a-gender-gap-in-startup-funding-but-efforts-to-move-the-needle-are-stronger-than-ever/#356764305f39> [Accessed 26 July 2020].

3. Gov.uk, 2019. Number Of Companies In The UK From 2018 To 2019. [online] GOV.UK. Available at: <https://www.gov.uk/government/news/uk-company-statistics-2018-to-2019> [Accessed 26 July 2020].

4. Levy, A., 2019. Council Post: Diversity In Entrepreneurship: What We Can Do To Create A Level Playing Field. [online] Forbes. Available at: <https://www.forbes.com/sites/forbescoachescouncil/2019/01/08/diversity-in-entrepreneurship-what-we-can-do-to-create-a-level-playing-field/#59f07f582ab4> [Accessed 26 July 2020].

5. McAveeney, C., 2013. How Do You Define Startup Culture?. [online] WIRED. Available at: <https://www.wired.com/insights/2013/09/how-do-you-define-startup-culture/> [Accessed 26 July 2020].

6. UNESCO, 2020. Gender Equality: A Fundamental For Tech Startup Success. [online] UNESCO. Available at: <https://en.unesco.org/news/gender-equality-fundamental-tech-startup-success> [Accessed 26 July 2020].