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Why Women Entrepreneurs Are the Future Of the Startup Ecosystem In this day and age, women are aware of what they bring to the table and how their EQ and empathetic attitude contribute to the rise of every venture they associate themselves with

By Yuki Kawamura

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According to the Global Gender Gap Report 2020, it will take another 100 years to achieve gender equality based on the current rate of progress in the growth of female entrepreneurs in the ecosystem. This prediction has been significant in pushing decision-makers, stakeholders across industries, and access points to work towards bridging this gap and solving for female representation in boardrooms. In the face of the COVID-19 pandemic, the year 2020 was a historic one for women in leadership. The progress for women has proven substantial. More women have assumed leadership of huge and influential companies. More women have also been elected to high office around the world, be it Kamala Harris or Ngozi Okonjo-Iweala.

In this day and age, women are aware of what they bring to the table and how their EQ and empathetic attitude contribute to the rise of every venture they associate themselves with. This awareness has led to a rapid rise in gender parity and has witnessed women-led startups thrive and soar. It is proven that diversity in leadership positively impacts growth. As an investor, we have been fortunate to collaborate with and invest in some phenomenal female founders, and here's our take on why investing in women pays.

High emotional intelligence

It has been proven time and again that leaders with high emotional intelligence are more effective in managing teams. They lead with a transformational leadership style and have empathetic nature which nurtures a positive working environment in an organization and women entrepreneurs have often been observed leading with it, which unequivocally impacts the overall growth and environment of emerging startups.

Dynamic and adaptable

Startups work in a dynamic environment and adaptability is a key virtue for a leader. According to research conducted by Bain & Company, Google, and AWE Foundation based on the survey of 350 women solopreneurs and small business owners in urban India, it is observed that startups led by women founders are resilient and quick to adapt. They often believe in the approach of dissecting a problem and finding the solution thereon. Women are also better at multitasking than men due to conditioning, which helps them focus on multiple fronts of a business rather than one.

Women entrepreneurs bring a better retention rate

Female founders as thought leaders are more likely to possess a high level of knowledge around financial success than their male counterparts. Another study from BCG shows that female-led businesses generate 12 per cent higher revenues annually, and use an average of a third less capital than male-led startups. It is noted that women founders are more likely to understand broader target markets which leads to a better retention rate.

The motivating factor

Female entrepreneurs are less likely to be motivated by money than male founders. Research conducted by Illuminate Ventures observed that males are nearly eight times more likely to be motivated by financial gain. Around 15 per cent of male entrepreneurs are motivated to start companies for financial gain compared to only 2 per cent of female entrepreneurs. This ultimately leads to them thinking about long-term financial gain rather than short term.

We live in and create for a very diverse set of audiences today. Meaningful businesses and innovations need to be bespoke, relatable and inclusive. We cannot achieve that unless we tap into that diversity for leadership representation. So, this International Women's Day, let's support women in leadership for an equal future in the COVID-19 world.

Yuki Kawamura

Partner, AET Fund

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