The Surprising Differences Between Men's and Women's Motives and Obstacles in Becoming Entrepreneurs
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Stereotypes can limit founders, regardless of whether a person’s circumstances truly do limit them. A venture capitalist might think, “She’s a mom, she’ll be burning the candle at both ends if she tries to start a company,” even if the aspiring entrepreneur doesn’t have a single doubt about her ability to balance business and family.
Women-led early-stage VC firm Illuminate Ventures recently surveyed a small group of tech company founders who raised VC funding in 2017 to gauge what motivates women and men to start businesses, as well as what deters them. From there, Illuminate also questioned VCs about their perceptions of founders of both genders, based on common circumstances that one might assume would help or hinder them. Across both groups, the firm collected 400 responses, according to TechCrunch.
In a summary of the findings, Illuminate highlights that fewer than 5 percent of venture-backed companies in 2017 were led by women. A mere 15 firms had a woman co-founder. (The proportion of VC-funded companies led by women of color is even lower.) Biases about women’s risk-averseness, cost-consciousness and overall viability as entrepreneurs persist, even though, as a group of Swedish researchers pointed out earlier this year, venture performance data doesn’t bear out these beliefs.
Illuminate found that VCs rated men more likely to display attributes associated with success in entrepreneurship, and they rated women more susceptible to common barriers to success. Across 10 success attributes, from networks for advisors/capital to prior startup experience, there was not a single attribute for which even 10 percent of male VCs rated women as stronger than men.
Women VCs, too, perceived women founders as less equipped than men across these success indicators. The only trait they viewed women founders possessing more strongly than men was smart risk-taking.
On the flip side, VCs of both genders believe that 15 out of 16 identified potential barriers to success in entrepreneurship (such as “fear of impact of failure”) are more likely to affect and limit women than men.
Counterintuitively, male founders were more than twice as likely to report that “balancing family and work” was a barrier to them starting a company. And, despite the fact that VC funding is much harder for women to come by, men were a bit more likely than women to cite a “need for financial security” among their strongest deterrents.
VCs are a bit out of touch with founders’ real concerns, according to the survey findings. Not one of the VCs who responded to the survey listed “gaining the support of family” among the top five barriers to entrepreneurial success; however, about one-fourth of male and female founders alike listed it among their own.
Meanwhile, while more than half of VCs (of both genders) assumed male founders are much more prone to having “prior startup experience” and the “desire to scale a business massively,” women and men founders reported similar experience levels and ambitions.
As far as a problem VCs view plaguing men and women in equal numbers, the one issue VCs think men and women face equally is “lack of a unique idea.” So, get out there and differentiate yourself!