In our pursuit of greater diversity and equal opportunity in business, we still have a long way to go. Despite numerous studies showing that mixed teams perform better, there is still too little focus on diversity. This is also true in the world of startups and funders. For example, over the past twelve years, some ninety percent of the growth money spent in the Netherlands has gone to startups with only men at the helm. Fundright wants to improve that situation, NOM wants to help increase equality of opportunity, not only among women, but also other groups that receive too little attention.
Worldwide, several countries have policies when it comes to equity in bringing in investments. The Netherlands does not. And the figures on this may be an expression of that. "Of all investments, 1.6 percent goes to female startups. That is extra bad when you consider that it is often indirectly government investment. There is apparently too little attention to diversity there. And so there is a brake on all kinds of innovations.''
So says Simone Brummelhuis. She is founder of the Borski Fund, a VC fund that focuses specifically on women innovative entrepreneurs. That such a separate fund is needed actually says a lot. ,,There is quite a bit going on, the situation is improving, but it is going very slowly. An example? A recent report shows that women seeking funding have 60 percent more meetings and end up raising 21 percent less capital.''
Bad choices sometimes understandable
The key question, of course, is: how can that be? ,,Especially when you know that all the figures show that statistically, women entrepreneurs make more returns for their investors with their investment. It has to do with all sorts of things. One important factor is that the way men present themselves on average in conversations for funding apparently inspires more confidence.''
This certainly also has to do with the investors. ,,Who mainly ask men questions about the future and women more questions about their past. And it is also quite understandable sometimes. I understand that as an investor you are more inclined to put your money in a middle-aged man who has already had five companies than in a woman who is just starting out. Still, that's certainly not always the best choice.''
Point remains that far fewer female startups apply for money than male ones. According to Simone Brummelhuis, that has a lot to do with the nature of women. ''There are differences, you have to be that honest. A woman who has received a rejection is upset about it. A man just tries again. It's like a girl who gets a 6 on math. She thinks: I'll drop that subject. A guy thinks: fine, that can only get better.''
Making funnel wider
Because of the differences, it is imperative that women be approached differently than men. This is also why Simone Brummelhuis initially created The Next Women (now led by Rixt Herklots), an organization that provides access to capital, programs, resources and networks to women entrepreneurs. ''We want to widen the funnel, also reach women who don't choose the entrepreneurial path by themselves. We encourage them to take the plunge, to initiate growth, to really go into business.''
That doesn't come naturally. ''You have to go to them. We scout all over the country. At universities and colleges, for example. We offer a network, programs for women who want to continue. And now we are so well known that more and more women come to us.''
And then the time may come when those entrepreneurs need funding. ''We look at the same things with the Borski Fund as other investors. We invest in very ambitious entrepreneurs. We look at the plan, the finances. We examine team dynamics with our science-based human capital scan. And we have an eye for other innovations. Our emphasis is not always on rapid growth, more also on the whole picture. We know how women think and act, we know their motivations and concerns. Women sometimes do business in a different domain than the enterprise tech guys. That doesn't matter as much with us. In fact, it's often an advantage. And yes, that certainly has to do with the fact that some seventy percent of our investors are women. That makes for more understanding between them.''
That approach has been successful. The Borski Fund helps women entrepreneurs and various teams, but it is not a relief organization. It's also just about the marbles. The fact that several other investors and banks joined the fund says a lot in that regard. Apparently, the companies that knock on Borski Fund's door are "just" successful, and Borski Fund also invests in companies with other investors.
Fundright as a movement is a great start, says Simone Brummelhuis. ,,First recognize the problem, then set goals and commit to them. I think that is the right order. We are now leaving too many promising women by the wayside. We are missing out on beautiful innovations, successful business activity, employment and economic growth. That's just a mortal sin.''
In this white paper:
- What challenges do you face and how do you deal with them?
- Becoming investor ready in four steps!
- An overview of all funding options
Please note that this whitepaper is only available in Dutch at the moment. We are in the process of translating this whitepaper.