Women Investors

Why are there Less Women VCs in the Indian Startup Ecosystem?

"The statistics are abysmal: Only 7% of women are partners at top 100 VC firms"
Why are there Less Women VCs in the Indian Startup Ecosystem?
Image credit: Pixabay
Entrepreneur Staff
Correspondent, Entrepreneur Asia Pacific
3 min read

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In today’s booming startup world, the term Venture Capitalist (VC) has become a new buzzword. As much as the entrepreneurs are starting up, the demand for more reliable investors is increasing by the day. But today most of the women entrepreneurs in India are struggling with the dearth of investors who can support and encourage them.

The ratio of male and female investors in India is sadly of 10:1. A lot have been written about the male-dominated startup culture in India, but when it comes to female investors and Venture Capitalist, there is a conspicuous amount of absence.

Earlier this year, TechCrunch published the “First Comprehensive Study on Women in Venture Capital.” Their analysis concluded that a mere 7 percent of investing partners at the top 100 venture firms were women. In fact, the Harvard Business Review explored the impact that female investors can have on their portfolios’ prospects in the context of US. It revealed while the success gap may not altogether “disappear when women fund women,” it’s notable that female entrepreneurs saw their prospects for successful follow-on investment and eventual exit improve significantly when they were backed by VC firms with female partners.

Entrepreneur had a chat with a few female Venture Capitalists and angel investors of India to discuss more about what’s stopping women to get into the Venture Capitalism and how it could be resolve to leverage women entrepreneurship in a better way.

Cultural Barriers One of the Big Issues for Women

In India, cultural barriers for women entrepreneurs certainly don’t help the situation. Mridula Ramesh, angel investor, “There are huge impediments for women entrepreneurs to come into angel investment. In India, a lot of married women grapple with challenges as they have a key role to play in the family.”

“If you’re an investor, you must have an experience of an entrepreneurial journey to understand the challenges,” she further added.

Lack of Female Role Models in Indian VC Ecosystem

Unfortunately, just like the rest of the finance industry, venture capital is a heavily male-dominated field. The statistics are abysmal: Only 7% of women are partners at top 100 VC firms.

According to Apurva Damani, Director, Artha India Ventures, the biggest reason for the paucity of women in the Indian VC industry is the lack of female role models. “This seems like a chicken and egg problem but the lack of women in the C-suite is drawing fewer women to enter the industry. Thus, an even smaller number of women graduate to the C-suite. Therefore, we have a vicious cycle that is hard to break,” Damani added.

Women Have to do Multi-tasking at Every Point of Time

In an interaction with Entrepreneur India magazine when India’s leading Venture Capitalist Vani Kola, founder of Kalaari Capital was asked about her challenges, she replied, “Of course, there are challenges for a woman.”

Talking about the right balancing act, Kola said, “Your peak career and your family demands they all intercede at the same point, which is not necessarily for men.”

While giving a sneak peek into her life, she shared on of her incidents. Kola said, “I was at a TED conference last week and I was having lunch, a  person sitting next to me started talking to me and he said, you have come alone or with your husband? And I said ya! Most of the guys have come alone to the conference without their wives and nobody asks that question," Vani said.

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