Collective action is the only Solution to Increase Number of Women Entrepreneurs in India
By: WE Staff | Thursday, 23 March 2023
‘Entrepreneur’ is technically a gender-neutral word. But, is it really? Although a make founder is simply called an entrepreneur, yet we still feel the need to underline a female’s gender while stating that they are an entrepreneur. Such a linguistic phenomenon probably persists owing to the huge disparity in several women entrepreneurs as compared to their male counterparts.
India, which is the third largest startup ecosystem in the world has more than 28000 technology startups today. But only 18 percent of these enterprises are run (in whole or part) by a female founder.
In today’s day and age, it would be rather banal to question women’s capabilities when it comes to running businesses. However, the proof is in the numbers. The disparity in numbers is staring us in the face. And the culprit could be ‘stereotypical myths and perceptions prevalent in India’. A recent study
‘Creating 10X Women Founders in India’, by TiE Delhi-NCR, Zinnov, Google, NetApp, and Indian Angel Network delved deep into understanding the various factors that hindered women’s growth and success in the Indian startup ecosystem. The study also talked about constructive steps that all stakeholders in the start-up ecosystem can undertake to strengthen women’s position in the Indian start-up ecosystem. Let’s have a deeper look.
The general perception doubts women’s capabilities of running businesses but the survey clears it up. The performance of startups led by men and women is comparable on several metrics. Looking at the success rate, we see that as compared to 8 out of 1000 male-founded startups reaching the late stage, the number for women-founded firms is 7 out of 1000.
This success was also witnessed in the usage of DeepTech too. According to the survey, 8 percent of women-founded startups are leveraging DeepTech, as compared to 11 percent of male-founded start-ups.
Women-led unicorns also create employment and revenue at a comparable rate as compared to those founded by their male counterparts.
According to the survey, 57 percent of women-founded startups are from sectors including Retail, EdTech, BFSI, and Healthcare. These startups were also the ones that attracted major VC-led investments. Women have also created a comparable number of B2B and B2C startups. 43 percent of the women-founded start-ups are B2B businesses.
Therefore it would not be presumptuous to conclude that startups founded by women are almost at equal odds of succeeding as firms led by men.
A Look at the Challenges
Although the metrics point to a comparable success rate, and high entrepreneurial intent, it is socio-cultural barriers that cause the undoing of women in the Indian startup ecosystem. Women are still underrepresented in technology and business domains which is another major inhibitor to their foray as startup founders.
The study found that the entrepreneurial intent of the Indian workforce, including women, is high at 76 percent. However, demarcated gender roles make entrepreneurship a less conducive career option for women.
Women also face an uphill battle when it comes to raising capital. There currently exists an eight percent difference in the amount of funding received by women-led versus male-led startups. The survey concluded that women founders come off as ‘more cautious’ to investors than male founders. Women-founded startups also take much longer to get ready to raise Series A.
Finding the Way Forward
The study suggests a two-pronged approach to removing the obstacles in women’s path leading into the entrepreneurial world. The first step is to identify the underlying causes stopping them from ‘starting up’. The next is to undertake outcome-oriented steps that can bring about tangible, measurable change.
6 priority areas were outlined by the study and steps on how to address each of them have been mentioned.
Atit Danak, Partner at Zinnov, said, “Women founders have proven their ability to successfully build start-ups, with over USD 30 Bn in the total valuation of unicorns and 800+ B2B businesses that they’ve built. However, despite their success, women founders still face challenges and biases in the Indian start-up ecosystem. Addressing these challenges is critical to unlocking the potential of 10X women entrepreneurs and bridging the existing gap. With buy-in and collaboration from the larger ecosystem, equity is possible.”
Srikant Sastri, President, of TiE Delhi-NCR, commented, “TiE Delhi-NCR, through its focused initiatives, has been at the forefront of creating a level playing field for women entrepreneurs. By launching this report, we aim to outline actionable steps and identify key focus areas and frameworks that will help create a more inclusive ecosystem that benefits all. We’re grateful to our partners for their support.”
Sanjay Gupta, Country Head, and Vice President, of Google India spoke about the study and said, “Over the last decade, India’s start-up ecosystem has made steady progress to cement its position as a leading hub of innovation for the world. It has made determined progress, overcome many set notions, and proven its credibility by building very successful and large enterprises. As we enter India’s digital decade, it’s also incumbent on this dynamic start-up ecosystem to reflect and review its impressions and biases when it comes to women-led start-ups in the country. This report shines the light on this fast-growing community of women founders and calls upon the ecosystem to make India an equitable and inclusive land of entrepreneurs and progress.”