Challenges of female entrepreneurs and how to overcome them
Apart from them, each year, more and more women set out on the journey to become successful founders and CEOs of their own companies. While these business-savvy ladies are inspirational to women with dreams of launching a startup across the globe, entrepreneurship remains still a traditionally male-dominated territory. Therefore, the shortage of female representation seems not due to a lack of entrepreneurial appetite, instead there is a wealth of evidence to indicate major barriers women face when founding and leading a business.
Struggling to be taken seriously
It is certainly not easy being a working woman in any workplace. In general, men form the majority in most setups and unfortunately they often form alliances. It is therefore not easy to break into the proverbial “boys club” and make space for oneself as a woman as the problem lies in deep gender biases and stereotypes which still exist. At one time or another, most women CEOs find themselves in a male-dominated industry or workplace that does not want to acknowledge their leadership role and as a female entrepreneur in a male-dominated industry, earning respect can be a struggle. But also outside the male-dominated industries women sometimes still lacking respect. The sectors in which the majority of women are founding their businesses can be roughly summarized under the fields of lifestyle consumer goods, fashion, art, health and education and are often bespoken as less serious and important than startups in software engineering and development.
Accessing funding
Not all startup founders look for investors to help get their businesses off the ground, but those who do know how difficult the pitching process can be. Raising capital is even more difficult for women-owned businesses. In 2019, less than 8% of companies in Germany with venture capital funding had female founders or CEOs. When it comes to fund raising, investors typically look for businesses that can grow their valuation to more than $1 billion. Women tend to be more conservative, don't overstate projections and often pitching too realistic numbers. Men from experience often overstate and exaggerate that investors often discount the numbers off the bat. So investors, who are usually men, tend to assume that the women entrepreneurs are operating just like men and inflating their numbers. Therefore, they will provide funding at lower levels than requested or any as they don´t see the $1 billion potential. Women need to understand this dynamic and approach their pitches accordingly or focus directly on venture capital firms that dedicate their funding only to female entrepreneurs and support not only by money but also by strategic educational workshops.
Balancing business and family life
Work-life balance is often a goal of entrepreneurs across the board, but being a “Momtrepreneur” means running a family and a company simultaneously which is in everyday life a huge challenge. Therefore, the concept of work-life blend has been gaining traction — and for good reason. For many “Momtrepreneurs” it can be difficult to fully shut off from work. Creating a work-life blend means that there is no “ideal” balance between the two to strive for. Instead, women should work for a blend of priorities, which can be regularly shifted to achieve balance rather than perfection. To find the best work-life blend, women entrepreneurs need to learn to be comfortable delegating tasks and asking for help when necessary.
Getting comfortable with risks
But not only external factors lead to the fact that for example in Germany the rate of female entrepreneurs is only 15%. When a woman starts a business, it’s often the first time in her life that she is completely banking on herself. In that case, women tend to fall into one of two camps: Some dip their feet in the water and get in slowly, while others dive in headfirst after having an idea. If you’re in the first cohort and are having trouble getting yourself going, take some time to figure out why. It may not be about the money on the line, but other factors, for instance fear of what your family will think, or nerves when it comes to promoting your idea in front of people. Also more often women are afraid to fail and therefore holding themselves back to avoid getting confronted with the actual result, although studies show that women-lead company are more successful.
Setting the bar too low
Apart from insecurity to take risks, many women underestimate what they can accomplish. Sometimes, women create interesting businesses without realizing how successful their companies have the potential to be. They start their businesses in a “hobby mindset,” to make a bit of extra money on the side and by that keep their business on a low scale. That’s a completely valid goal, but it’s also okay to have grander visions, to think big like men do! It is important to surround yourself with supportive women who want to see you succeed and with whom you can openly discuss your fears and concerns to build up confidence and overcome negative self-talks.
The Future Is Bright
The future of female entrepreneurialism is certainly bright as there are more successful female entrepreneurs than ever and an ecosystem supporting women entrepreneurs and women-owned businesses is growing. Being a woman doesn’t have to hold you back as an entrepreneur, but still in 2020 you may need to work harder and get more creative to earn the respect of your male colleagues and contemporaries.
Sabrina Gildehaus is a fashion expert and specialist from Berlin who now lives in Kiev in the Ukraine.
She is the founder of the fashion consultancy Gildehaus. Her mission is to support and develop fashion brands and create a community of fashion experts.
She has more than 10 years of professional experience in the fashion industry. Previously she worked with Tom Tailor, Joop! and Zalando SE.
