Silicon Valley’s ‘brogrammer’-heavy start-ups and boys’ club investment firms have been lambasted by the likes of Ellen Pao and Susan Fowler, but toxic chauvinism still lingers in the air as the Valley reels from bad PR. While the Bay Area remains the epicentre for start-up growth, its culture threatens to spill over to other entrepreneurial cities that rely on venture capital and a male-dominated tech talent pipeline.
As far as diversity goes, compared to the United States, those working in UK start-ups are five times more likely to be female; two and a half times more likely to be under the age of 36 and ten times more likely to be from a different ethnicity, other than white and Asian.
London is widely seen as the torchbearer for diversity and fundraising in the UK, and is three times more likely to have women working within its start-up community than both Silicon Valley and Tel Aviv. The capital is also hot on the heels of New York City – identified as the world’s leading hub for female entrepreneurs – with over 24 per cent of women identifying themselves as being in a leadership role.
But is that enough? London may not be able to fly the flag for diversity too high if only a quarter of its start-ups are led by women.
All entrepreneurs – not just female founders – encounter bias and stereotypes. It is clear that the most frequent difficulties faced by founders are universal and not gender specific, such as finding the right co-founder, finding ways around the lack of resources, fundraising, retaining control over the business, and the need for more support.
For women and ethnic minorities, the challenges are more pronounced. Fundamental structural factors such as a dearth of women studying STEM subjects, leading businesses, responding to and addressing discrimination across all industries all lead to a rockier road for support. Female founders still lack easy access to know-how and funding, including limited access to practical and valuable support networks which bring together mentors, other entrepreneurs and potential employees and co-founders.
“It goes back to the way these businesses are founded,” says Lu Li, founder and CEO of Blooming Founders, a London-based business social network for early stage female entrepreneurs. “Tech start-ups are developed by men for men; women can be a part of it. The concept of accelerators and incubators essentially came out of Silicon Valley, and favours young, technical men. That’s why accelerators struggle to attract more women.”
“A women-only environment is important to encourage honest dialogue. If networks started out women-centric, then opened it to men, they will attract men who are automatically supportive of female entrepreneurship. I don’t have the time nor the energy to educate the men who don’t get it, but I welcome those who do.”
Accelerators offer funding and a support network, but even this model needs a revamp to attract a more diverse crowd of entrepreneurs, says Poppy Wood, chief of staff at CyLon, Europe’s first dedicated cyber security start-up accelerator and incubator. “50 per cent of CyLon’s cohort is female, and while we’re proud of our diversity, it’s very difficult to keep it up. There are so many things to consider. Do we make our programme virtual, or shorter but more intense? The current model expects entrepreneurs to be ‘all-in’ for three months. But then there’s the concern that female founders might not be able to relocate or spend all that time far from their families. That simplifies the issues facing female founders; the assumption that (female founders) need ‘family friendly’ initiatives to be part of an accelerator,” Wood adds.
No one wants to be backed by an investor just looking to tick a box for diversity. Cassandra Harris, CEO of VentureSpring, says this is where accelerators can make a real difference. “I very much stand for women in business but I don’t really like to promote it in a way that makes it a blatant obvious push for women. I believe in showing through results and or influence rather than stating “oh lets create a special programme just for women”. I know how hard it can be to be a women in business,” she says. “I believe it’s important for women to be viewed equally when it comes to business as they have just as much skill and ambition.”
“Creating a separate programme for women isn’t the answer in my opinion as both women and men should be treated fairly and equal. Why should we get privileges just because we are women, that automatically creates an opportunity to be judged differently? Yes, perceptions need to change, but we should help to change those perceptions by showing both women (and men) what women are able to achieve.”
Venturespring works with big brand corporates and connects them to a curated pool of start-ups through the Ignite programme. Start-ups are selected based on their potential to help solve corporate challenges or create opportunities through innovation.
“We have created a new model in business creation and acceleration which is backed by our corporate partners. This goes beyond ‘classroom-style learning’. The start-ups that join us have exclusive access to hard-to-reach corporate resources that allow them to scale quickly and the corporate get to fully embrace innovation in a way that future-proofs their business,” says Harris.
Investors may constantly be on the lookout for the next great start-up, but just as venture capitalists are largely white and male, so too are the founders of start-ups that get funded. Among 71 of the top venture capital firms, 94 per cent of investment team partners are male and 78 per cent are white.
While Uber’s reputation is in tatters, mostly due to its popularity and value of the company, it is hardly a one-off example. The brogrammer is a long-running cultural meme. The problem is so pervasive that it was recently explored in the Netflix original, Grace and Frankie, which follows two septuagenarians on, among many other adventures, a start-up journey. After being turned down for a bank loan, the titular characters turn to an incubator, only to face a lot of ridicule from too-cool-to-care brogrammers.
According to Xavier Rolet KBE, chief executive of the London Stock Exchange, adversity breeds innovation. Speaking at the 20th annual Women in Banking and Finance awards luncheon on Friday, he explained that the biggest hurdles for diversity can be the biggest opportunities for the people facing these blocks.
If female founders are facing funding challenges, female-led fintech may be the answer.
“The countries where women are treated most discriminatorily are where we find the most outstanding talent,” he said. “The establishment is going to find it difficult to reform itself. The best way for challenging and reforming outdated systems is to find yourself in difficult situation. The banking and finance sector is excellent for smart, capable, ambitious women to disrupt. If the companies where you work do not give you the right opportunities, start up on your own and compete with them.”
As male dominated as start-up world may be, Rolet emphasised that the purpose of finance is to fund new ideas. “We all have a duty to help old Europe reinvent itself. There are 23.5 million people unemployed. What we should be doing is found new companies that can create new jobs. The opportunities are in the 23.5 million start-ups,” he added.
“If the glass ceiling is getting too heavy think about it. You may fail once or even twice. But innovation is the most fun we can have. Women, as you know, have done most innovation in the last century. You come from the position of perceived and real disadvantage. That challenge is fundamentally what also stimulates the need to innovate; to get through the obstacles on the way.”
Is sexism the only thing holding female-led businesses back?