tech pioneers, women in tech

Article by Megan McLatchie

Despite the UK being the 3rd largest startup ecosystem globally, the nation ranks only 15th in terms of the “global gender gap”.

Though there has been a rise in the number of female-founded startup companies valued at over $1 billion (from just four in 2013 to ten in the first half of 2019) the gender gap within the ecosystem still remains far from equal.

According to a report from British Business Bank, for every £1 of VC investment in the UK, only 1p get invested into startups with female founders. To make matters worse representation of women in tech greatly struggles with gender equality having only 20% of females making up the whole of the UK tech workforce, and only 5% of senior roles being held by women. Therefore, It doesn’t come as a surprise when I say that there are less female tech founders compared to any other startup sector.

Yet regardless of the challenges, there is a need for more women in the UK to become founders of technology startups and I’m here to tell you why.

Female Experiences & Perspective

Men and Women experience the world differently. Though the differentiation of their views has narrowed in recent decades and is continuing to do so, male and female experiences still remain undeniably different. And this is reflected in their startups.

Stereotypically, women have multiple roles in society, the top 3 being wives, carers, & mothers. Because of this, they might see it as important for their employees to have certain benefits, such as daycare and childminding due to experiences of either themselves or their partner trying to juggle work and family life. But also experiences unique to women such as periods, giving birth and the menopause can shape product ideas for viable and growing markets. Examples include Mooncup – the world’s first reusable silicone menstrual cup and bitbaby – a wearable device for expectant mothers to monitor their baby’s movements on their smartphone. By having a female founder that not only thinks of these products but understands and has experienced the problems that those products hope to solve, ensures the product meet their needs of a feminine market, drawing on their own experiences to do so.

Additionally, if you’ve got a product that’s based at both men and women, having a male and female founder as a representative for both customer segments ensures the product remains gender-neutral.

Capital efficient & higher ROI

Even though there’s a higher ratio of male founders than they are a female founder in the UK, there is evidence to show women are a safer bet for an investor. According to the Kauffman Foundation, tech startups establish by female founders are more capital-efficient, achieve 35% higher return on investment and have a 12% higher revenue than those run by their male counterparts.

So with all this promising data to back up female founders, why aren’t investors jumping at the chance to invest in their startups?

The short of it is, investment panels aren’t fairly representing a diverse range of founders. 92% of the top 100 Venture Capitalist panels are made up of highly educated, white, middle-class men, so investment decisions are being made in environments which miss utilising a diverse range of voices and opinions. So in this instance, if someone was to come and pitch the idea for the worlds best menstrual solution to a board of investors that are majority men; 1) They might not understand the problem, but 2) They might not want to invest because it is something they have no experience in and therefore can’t empathise with the importance of the product. They may instead choose to favour a company such as a FinTech, as it is a market they can understand and are used to seeing.

More money to the economy

Earlier this year, HM Treasury found that the gender gap accounts for approximately 1.1m missing businesses. If we shrink the gender gap by matching the number of female founders to male founders this would generate a £250 billion opportunity for the economy. I need not mention the taxation benefits, the increase in the number of people employed, and the attractiveness for foreign investment that this would bring, but most significantly, it fuels the development of growing economies across the UK. A current example is what is happening in the North West. Now a more welcoming climate for startups than ever before, boasting over 13,000 tech businesses and a £4.98bn digital tech turnover. Nova, a Liverpool-based tech startup cofoundery has helped produce this revenue by elevating sectors that were already blooming in the North, particularly FinTech and MedTech. With a healthy portion of those coming from their female founders including, Rebecca Taylor founder of Aquarate, Juliet Awang founder of Woowi, and Rachael Namiiro founder of PaidYou.

The UK needs more female tech entrepreneurs, not so they can improve their mediocre ranking of 15th in the Global Gender Gap, but because more diversity builds stronger startups. We know that the 3 big obstacles women face when creating a startup are funding, mentorship, and experience, but if a female founder is given support and mentorship to guide them through their startup journey, they’ll flourish.

Nova co-founds startups with talented people, working alongside them to realise their entrepreneurial ambition. Partnering with Nova, founders have everything they need in one place and can focus on doing what they do best – building and growing their business.

About the author

Megan is a Marketing Executive working at Nova, a tech startup cofoundery. Their startup programme supports founders who are in the early stages of starting a business, providing them with expert guidance, an experienced startup team and continuity of investment. Megan is a frequent contributor to Nova’s blog and has also been featured in Health Tech News, and Just Entrepreneurs.