Why Women Need To Be Investors and Not Just Entrepreneurs
The number of women at the top of the investor pyramid are virtually non-existent.
The share of women founders in the Indian startup ecosystem may have risen to almost 10% in 2016, from virtually being non-existent a decade back, but investors for the sector largely remain limited to an all boys club. Although opportunities may be infinite for potential women investors, the execution is alarmingly low.
Compare this to corporate India, where according to a Forbes report in 2015, almost 30% of corporate management and decision-making roles were occupied by women, a figure much higher than the global ratio of 24%. So what’s stopping women from being represented higher on the entrepreneurial map and more importantly the investor map.
“It’s gender bias and most of it is societal,” said Rekha Menon, Chairman and Senior Managing Director, Accenture India, at a recent event held in Bengaluru. “The ambitions of women in this country have been restricted for so long that they often limit themselves in key business skills like negotiation and risk taking,” she added.
Larger Participation Required for Fostering Entrepreneurship
India is still at a nascent stage when it comes to startup funding and VC firms, giving the handful that exist an important but disproportionately large role in the startup ecosystem. To top that the number of women at the top of this pyramid are virtually non-existent.
In fact, Vani Kola of Kalaari Capital and Bharti Jacob of Seed Fund are the only two prominent founding members of a VC firm in India amongst the many that exist. There may be women angel investors in the startup ecosystem, but none that have been at the forefront like some of the male investors.
“This low engagement of women VCs is eventually leading to women entrepreneurs securing a very low share in the funding pie and thus having inadequate access to capital. To top this very few mentors in the ecosystem are also women,” added Menon.
Extending Menon’s views, Kiran Mazumdar Shaw, the Chairman and MD of Biocon, and one of the first and most successful women entrepreneurs from the country, feels much of this is rooted in the gender pay gap that has improved over the years, but is not there yet, where women are paid equally as compared to men.
“Not only are women paid less, industries are failing to promote women in the existing work structure,” she said at an event recently harping on how India could never become an economic superpower, unless it's women have adequate labour force participation.
What Needs To Be Done
The broader outlook is to get more women to participate in the entrepreneurial ecosystem, but how can this be achieved? Menon suggests some changes that may help increase female participation:
- Need to make an environment where women entrepreneurs grab all the opportunities
- Need to have targets in accelerators and incubators to hunt for women entrepreneurs
- Can have dedicated percentage of VC funds dedicated for women entrepreneurs
- Government can discuss on tax benefits to be given to women who invest in such schemes
She was generating stories out of Bengaluru for Entrepreneur India. She has worked with leading national and international business publications, including Newsweek, Business Standard, and CNBC in the past.