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How women entrepreneurs can get more funding, as told by women entrepreneurs

It’s an established fact that companies led by men receive far more funding than women. It’s a problem that’s long been known to entrepreneurs – and it’s something they’re actively working to combat.

Women from all walks of business gathered in Auckland on 25 November to attend the Fantail Network’s MINDMATTER Symposium. The event – which included speakers like Eat My Lunch founder Lisa King, The Hunger Project chief executive Lisa Gunnery, and ASB digital general manager Fiona Colgan speaking about her story and the latest digital trends – was held with the goal of supporting, connecting and enabling women in business with a particular focus on technology, innovation and entrepreneurship.

Idealog spoke with Natalie Robinson, founder and CEO of Mum’s Garage, and Jane Kennelly, trustee and co-founder of the Fantail Network, about ways to promote equality in entrepreneurship and more.

Idealog: I understand you teach entrepreneurs how to grow their mind and develop the skills necessary to become an extraordinary entrepreneur by running transformative entrepreneurial programmes and events. What’s the importance of this?

Natalie Robinson (NR): I’m glad you asked! It’s important because there are so many talented kiwis with great ideas who are working in unfulfilling jobs because they don’t know how to turn their ideas into a reality.

We’re conditioned to be employees not entrepreneurs. Throughout school, university and for most people, upbringing, we’re primed for the perceive route of success which is a well-paying, secure job. So when you come up with a great idea that requires flipping this model on its head by quitting your job and starting something that is perceived to be very high risk, of course it’s hard to do. There are a lot of psychological barriers at play that most people aren’t aware of, which is why the mind-set piece is so important. Some people are fortunate to be brought up in an environment that helps to condition them for success as an entrepreneur, most people aren’t.

Through the events and programs we run, we teach those who aren’t how to develop the mind-set and skill set for success, and provide a support community to make entrepreneurship accessible for more people.

Is networking a key part of the events you run? What is the importance of networking, especially for women entrepreneurs?

NR: Yes absolutely, connections are fundamental for building a business. Finding someone who believes on your idea or who can connect you with customers, partners, co-founders or supporters can be the difference between making something a reality, and not. A lot of what I do is connecting people.

I think networking is equally important for men and women. The important consideration is creating an environment where everyone feels comfortable networking, and everyone gets value. When it comes Mum’s Garage events I’m conscious that almost everyone feels uncomfortable being in an environment talking about entrepreneurship and startups when it’s something that’s new to them. We actively create and promote an authentic, non-intimidating environment so people are comfortable with not knowing all the answers. We clarify buzzwords and address the fact that no one really knows what they’re doing when they start out. This sets the tone for networking.

While women start their own companies at twice the rate that men do, just 2.7 percent of venture funding goes to companies with female chief executives. What are some things we can do to help women-led businesses get more funding?

NR: Investors are looking to invest in companies that will give the biggest return. Especially venture capital firms as that’s what their mandated to do by their own investors. Like every individual, investors are also conditioned to be bias towards a perceived pathway to success, which is based on reference experiences. If you look at the more successful startup in the world, most of them are founded by a particular type of entrepreneur. So there is going to be biases towards a particular type of founder and a particular type of company until someone changes this perceived pathway to success. It’s not necessarily conscious sexism, it’s just human nature.

So what we need is more investors who are prepared to back founders and companies that don’t fit the perceived success model. We need investors to fund companies based on the merits of the founders alone, without being influenced by the biases of social norms. Then when teams with women CEOs start to succeed at an equivalent or greater rate than teams with male CEOs, for example, the old beliefs will quickly change.

What are some obstacles women entrepreneurs are currently facing? What can we do about them?

NR: Confidence is a big obstacle for most people, but it’s particularly relevant for women. A number of studies have found that women are less confident than men, especially on topics they are not experts on. Confidence is a huge factor in building a successful business, because you’ve not only go to convince yourself that you’re going to make the idea work, you’ve got to convince potential co-founders, investors, customers and partners to get behind you. As I mentioned earlier, when you’re building a business for the first time you’re doing something completely new, so you are far from an expert on the matter. You’ve just got to have confidence in your ability to make it work. This tends to be more difficult for women. 

In the short term, we can help to build the confidence of women and other groups with less confidence by teaching them how to start businesses and providing support communities. When you know how to do something and you’ve got the support of others, you become a lot more confident at it. We can also share the real stories of founders and how they started out, to get rid of the perception that you have to fit a particular mould in order to be successful. I run a regular event called Entrepreneurs Unleashed where I invite founders to share the stories of how they started out, with the purpose of helping to realise that everyone starts out as an ordinary person. This seems to work really well.

In the long term, we can address the reasons why particular groups of people are more confident that others and look to change the systems that are having an impact on social conditioning, for example the schooling system.

What kind of progress with getting more women to successfully start their own businesses have we been seeing in the last few years?

NR: The startup ecosystem in New Zealand has been growing in leaps and bounds over the last few years. There are some great examples of companies doing well in New Zealand that are led by women founders that we can draw from, such as Eat My Lunch, Dexibit, Sunfed Meats, just to name a few. With more examples of successful women entrepreneurs come more role models, which help the reality of becoming an entrepreneur more realistic for more women.

Natalie Robinson (centre), founder and CEO of Mum’s Garage.

What are some goals you have for the future?

NR: My goal for Mum’s Garage in 2017 is to reach 1,000 Kiwis and help them to take the next step towards turning their their idea into a reality. Making entrepreneurship more accessible is the problem that I care about solving now, but there are a number of other problems I’d like look into solving in the next five years. I’ve also just co-launched New Zealand’s first pre-accelerator program, The Validator, in partnership with Jeff Mann who was the Program Director for Lightning Lab Auckland in 2016. The program is digital which means it can be accessed by teams from all over New Zealand. We’ve got 14 teams going through the program at the moment, so our goal is to significantly ramp this number up next year and continue to develop it as a highly effective program for helping founders form a well validated startup idea.

Anything else you’d like to say?

It would beneficial for women if there was more emphasis on celebrating the positive qualities and competitive advantages we have when it comes to building businesses. For example, women tend to be more empathetic than men. This is a significant advantage when it comes to starting a business because understanding the problems and emotional drivers of your customers is essential for building a great product.

The mindset that we should be encouraging, if we a more diverse range of entrepreneurs, is a growth mindset whereby we recognise that we have certain beliefs based on our experience to date but we have the ability to change these beliefs by creating new reference experiences. We need to create the environments that promote this way of thinking to remove the perceived barriers preventing people from taking the first steps.

Jane, I understand you feel young women in business are not being taught how to network, while men have long had their “boys’ networks.” What can we do to fix this problem?

Jane Kennelly (JK): Networking isn’t just a matter of who is connected to who, it also matters who the connections are. It’s about having a high network as well as a wide network – and it is an area where men excel.

With men holding 80 percent of the jobs in senior management and naturally networking together, little wonder that the information flow regarding positions, opportunities, news and career opportunities are communicated within this group first.

With this being said, all the more reason to start encouraging young women to begin to emulate these networks so they start to plant themselves in the pathway of the information flow. By developing a network that has high-level people, peers, cross industry contacts, is non-gender biased and includes people that are considered influencers, young women become part of the flow.

This type of thinking doesn’t come naturally – it needs to be nurtured.

Jane Kennelly, trustee and co-founder of the Fantail Network.

I also understand part of the goal of Fantail Network events is to work for a mutual purpose and get away from dysfunctional silos. What do you mean by “dysfunctional silos,” and how can we get away from this?

JK: The silo mentality has been prevalent in many organisations where several groups or departments don’t want to share resources or individuals [‘stuck to themselves’] which in turn impacts efficiencies.  Typically, with this type of thinking, communications are challenging, time-consuming and the wheel is reinvented time and time again. 

Contemporary thinking is focused on encouraging collaboration.  As projects become increasingly complex or ambitious, partnering is called for and is very much part of the solution thinking we have in place with the Fantail Network. 

As a network, we are inclusive – this is about welcoming all people who are interested in enabling, connecting and supporting women in business to achieve our mutual goals.  It is not about being elitist or having to make an application to join.  Membership is free, we have removed as many blocks and obstacles as possible to encourage network growth with like-minded people and a range of activities will only be achieved via collaboration and partnering with those who have perfected their craft or system. 

Same question as for Natalie: what are some things we can do to help women-led businesses get more funding?

JK: It is frustratingly undeniable that the profile of a successful entrepreneur is male. Add to this the facts that:

1) Only a small percentage of investment venture professionals are women.

2) It is highly likely during the funding process that entrepreneurs are most likely to be presenting to all male audiences.

It is easy to see how an unconscious bias message is amplified as reinforcing men as a reliable investment.

To combat this, we must ensure the media, educators, and funders recognise that successful entrepreneurs are not all like Derek Handly and it is time for women to get their act together in the funding stakes.

Research is key – as in knowing who has funding available and when. 

Running your own gig means long unpredictable days with plenty of presenting, pitching and talking. 

Essential is passion, being prepared to make sacrifices, being single-minded in the quest, being persistent, and being open to learn new skills. This is where the value of a network comes to the fore when starting out. 

OK, great. What kinds of progress have we seen in the last few years? 

JK: There is no doubt that growth in women starting their own businesses is evident as market trends, lower interest rates and good ideas are being celebrated.

Apparently, women entrepreneurs are more adept at seeing gaps in the market and seizing the opportunity.  They have been cited as being agile, innovative, problem-solvers, meeting corporate needs quickly, adapting to change quickly, and providing deep value and cost effectiveness. [Kauffman Index, 2015]

It has even been mooted that the golden age of female entrepreneurs is upon us!  What a positive for us all – empowering women, good for the economy, good for consumers and good for society.

Which leads us neatly back to the reason that The Fantail  Network exists which is to connect like-minded people, encourage the heart, assist people take risks, be inspired  into action and to have latest thinking presented in a relevant useful way.

What are some of the key issues we’re facing?

JK: The gender gap in the workforce is very evident. Women continue to earn less than men, are less likely to advance their careers, are less likely to get funding for their startup and accumulate less retirement funds.

The aim of gender equity is to achieve some broad outcomes for women and men that foster:

• Equal pay for equal or comparable work.

• Removal of barriers to the full participation of women in the workforce.

• Access to occupations and leadership roles regardless of gender.

• Elimination of discrimination based on gender particularly in relation to family and caring responsibilities.

Gender equity is getting a lot of attention these days which is a positive step in at least recognising a problem exists.  According to McKinsey and their CEO guide to gender equality, top executives can apply four approaches to push gender initiatives:

Get committed – change initiatives MUST be a strategic priority.

Action stations – such as sponsoring women, managing the impact of maternity leave in career advancement, diversity in leadership roles.

Hold challenging conversations – amongst the executive team.  Four questions to get the executive team going:

• Where are the women in our pipeline?

• What skills are we helping women to build?

• How are we recognising unconscious bias?

• Are our policies helping?

Sweat the little things – gender equity requires a drive for action but you have to become adept at spotting it in the first place.

Wow, thanks for that. What are some goals you have for the future?

JK: Future focused activity involves:

• Developing a national mentoring framework through collaboration that gives a new spin on the value of being both a mentor and a mentee.

• Virtual network hook-up so women in business who are isolated (e.g. farming) are involved as part of the network via on-line activity.

• Regional coverage with Christchurch and Tauranga being launched in 2017.

• GirlTech focused on introducing young women into tech roles .

• Offshoot programs to meet needs such as funding support, venture capital.

•  Extension of the international partnership we have with Edinburgh School of Business MBA programme which is available to members of the Fantail Network, their sponsors and sponsors employees.

• Entrepreneurial Women’s forum development underway for 2017.

Awesome, thanks for your time. Anything else you’d like to add?

JK: Men and women have strengths and skills to offer that equally should coexist and complement each other. Why should this concept be so threatening?

Given the number of women in the workforce one would think that there would be a near-equal representation but… there isn’t. It’s about celebrating being a woman, it’s about receiving equal respect, it’s about giving equal respect.

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