Geneva, March 2018
By Maya Plentz
How to make sure more women receive public funds for research?
We must make sure that more than simply voicing our outrage on social media platforms we hold governments, corporations, and venture capital firms accountable in the sense of sponsoring, funding, and granting the necessary financial means to women founders – and that we support the creation of women led venture capital firms.
The glaring disparities in venture capital and seed funding for tech companies founded by women is not only at the at the early stage and series A level. It is on subsequent rounds, the ones that can ensure scalability. Let’s look at these statistics also from PitchBook.com: “Consider the 10 biggest deals raised by female founders compared to the 10 biggest rounds landed by men. While the largest round invested in a woman-led startup was $165 million (Moda Operandi’s Series G), the largest that went to a male-led company (WeWork, also a Series G) was $3 billion.”
But that is not all, we need men and women to come forth and support the evidence. The evidence that investing in women is good for the bottom line, not only because it is the ethical thing to do, for the positive economic impact of women working in equal footing and with equal funding is clear.
There is a substantial amount of funding available by government agencies such as the NIH, NSF, DARPA, and e-DARPA in the US, various multilateral organisations, as well as the European Commission Framework Programme for Research and Innovation. Trillions of public funds, tax-payers money, that mostly fund startups and research led by men.
Consider this: women constitute 1/2 of the population of most countries, if not slightly more, they pay taxes, they do unpaid labour care for relatives, they work in less well-paid fields, and then when they are paid, they receive on average 70 cents to the dollar. And on top, when they go looking for grants, “free” money, from government agencies they are often turned away.
So, they pay taxes and never get to see their tax money fund their projects whereas male engineers and startup founders do.
Is it not a form of perpetuating women’s poverty?
Is it not a vicious circle, no pay, little pay, pay gap, and no grants? We need to ask ourselves, Ladies and Gentlemen. Is this the future that you want for your daughters? For your sisters? For your mothers, that once they are through raising you, and want to go back to the workforce, or launch a business, that they will have no access to these funds?
Continued outreach must be made not only at the university level, but also for mid-career professional women from all sectors, not only Engineering and Computer Science, but in the Social Sciences too. That the funding that exists be promoted directly to women researchers and startup founders and calls for applications be designed in a way that makes it a priority to have women funded.
Let’s take a look at unconscious bias when selecting startups and research projects for funding. Maybe we should establish new ways for review panels, where the names and gender of the applicants would be not seen till the end. It worked for Classical music auditions in the Eighties. You know, musicians would audition behind a curtain, so their gender would not be known by the judging panel.
Time is ripe to be a bit more directed in our efforts to achieve gender parity at the workplace. Time is ripe for investing more in women.It is not only because it is moral and ethical to do this, but several studies, including a recent one by the American incubator, seed and venture capital firm First Round, shows women-led tech startups are consistently more profitable.
Jason Calacanis, founder of Launch, a seed fund and incubator in San Francisco, said repeatedly that their investments in women led companies have proved to be the best bets they made.
Yet, overall, women startup founders only received 1.9% of all the available venture capital in 2017, in the US. These figures are even lower in European countries.
To make a parallel, in the trade area steps are being taken, a similar proposal could be put forth for funding startups through EC frameworks:
The European Parliament just voted, last week, for the inclusion of gender in trade agreements, and I quote: “MEPs call on the EU Commission and the Council to support the inclusion of a specific gender chapter in all future EU trade agreements. They also want all future trade deals to promote international commitments on women’s rights, gender equality, gender mainstreaming and the empowerment of women, based on international standards such as the UN’s Beijing Platform for Action and the Sustainable Development Goals.”
And why is that?
Because at the present “only 20% of current EU trade agreements mention women’s rights.” Only 20%? But I am optimistic for the press release about the MEPs vote continues, and I quote: a “review of current EU trade deals, only 1 in 5 of these agreements mention women’s rights, and only 40% include references that aim to promote gender equality. MEPs also emphasise that trade policy should be used to improve the living and working conditions of women, on equal terms with men, notably by supporting the reduction of gender pay gaps by creating better quality jobs for women.”
The same goes for funding women’s research, not research about women, we have plenty of that, I mean research designed and led by women.
To which I add: where is the funding for Research and Innovation that delivers social impact going?
When agencies, intergovernmental organisation, and multilateral bodies fund women led teams and projects what is the result? MEP’s “encouraged the Commission to cooperate closely with relevant organisations and national statistics offices to improve the collection of such impact-assessment data.”
Excellencies, distinguished colleagues, ladies, and gentlemen, I give you questions, and a plea. Design your programmes and calls for funding in such a way that it reaches women researchers and women startup founders at all levels of their careers, do not focus only on the “30 under 30” prizes, as nice they can be.
For populations across the globe are ageing. We have increased life span by 30 years in the last five decades. In Europe’s and most developed countries, as well as emerging economies, such as Brazil and India, populations are ageing. We need to be more inclusive, age-inclusive too, in our programmes, funding mid-life, mid-career women too.
Last but not least, lets increase the amount of funding available to advance gender equality in research organisations and universities.
Horizon 2020 Work Programme for 2018/2020 in its Science with and for Society strategic orientation, will invest around 3 Million Euros in projects, per project, that are aligned with gender mainstreaming. Let’s hope that more awareness of proper funding for gender mainstreaming reaches the high-levels of decision making at governments and institutions alike.
In 2016 only 7% of the partners in venture capital firms worldwide were women and just 2% of venture capital funding went to female founders. How can we change this landscape?
There was small progress in 2017, according to an article by Fortune magazine “all-women teams received just $1.9 billion of the $85 billion total invested by venture capitalists last year, according to data from M&A, private equity, and VC database PitchBook. That’s equal to about 2.2% of 2017’s total venture capital invested in deep tech and digitally enabling startups. ”
“Meanwhile, all-male teams received about $66.9 billion—roughly 79%. (Of the remaining 19%, 12% of funds were raised by mixed-gender teams, while 7% was raised by teams whose gender makeup PitchBook was unable to confirm.”
We all agree that the size of the gap is shocking, however, it is slightly better than 2016. For, and I quote: “In 2016, female founders raised just $1.4 billion—or 1.9% of total VC funding. In fact, with the exception of 2014, 2017 marks the largest percentage of total venture dollars that has gone to female founders since PitchBook started tracking the data in 2006.”
There is a lot to be done, and here I believe that it has to be two-pronged effort where private sector actors, together with public sector funding agencies, must make a concerted and directed effort to address these gaps.
As you all know, many private equity and venture capital funds tap into state pension funds and other public funds to generate their investment funds.
There must be some way to address these glaring disparities in funding women tech companies if the public funds in question demand that a fair share of the investment be made to women founded and led tech startups. And by that I mean both deep tech, biotech, nanotech, the life sciences, the social sciences, as well as digitally enabled businesses where women often have deep expertise.
I am not here representing a company or single organisation, I am representing women who work in tech, and the digital economy. Women who want to create tech companies, run and scale real businesses, 100 million USD exits, not a side gig.
I see these ambitious and eager women all the time, at the accelerator MassChallenge where I am a mentor, in buses, in the streets, in seminars, in accelerators, in conferences, where most of the time 80% of the audience is male.
I see them trying to sell their ideas to a mostly male seed and venture capital audience, to tell their concepts just to be overlooked, interrupted, talked over by male colleagues and partners.
There is a cultural shift that has to happen in our societies.
After a year of hearing and reading horror stories about women being held back professionally by bullying, sexual harassment, and other forms of abuse of power it is time that we calculate the costs for our economies of these women’s lost time and lost money.
Please get in touch if you would like to find out more about the studies I sourced for this policy statement.
See reference links:
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