The tech startup tech ecosystem remains a male-dominated world. The numbers speak for themselves: last year only 1 per cent of all venture capital in The Netherlands went to startups with solely a female founder, according to Fundright, based on data from Techleap. Several new initiatives aim to turn the tide.
Fundright: only 1% funding for female founders
The research from Fundright paints a somewhat sombre picture. In the first nine months of 2020, only 1 per cent of venture capital in The Netherlands went to startups led by women. That’s even worse than in 2019 when it was an already measly 1,6 per cent. Startups with a diverse team received 13 per cent of all funding in the same period.
The data was made available by Techleap.nl and gathered by Fundright. Fundright started nine months ago as an initiative that aims to improve diversity in the tech and startup scene. Its goal is to have an ecosystem that consists of 35 per cent women by the year 2023.
‘We need to do better’
Eva Mol, managing partner of CapitalT and member of the Fundright initiative realises a lot needs to change to achieve that goal: “This new data shows that female founders need a man in their team to get the funding in”, she says. “This is unacceptable and sad in the twentieth century. We need to do better.”
The decline in funding for female-led startups is partly due to the outbreak of the pandemic, causing investors to look for safer options says De Mol: “Because of COVID, investors are more inclined to stay in their own network, looking for deals. When your network is homogenous, COVID makes it harder to break out of that bubble.”
Despite the apparent setback, the goal of Fundright is still to have 35 per cent women in the Dutch startup ecosystem in two years. One way for VCs to look beyond their own network is by supporting the FundRight initiative.
TechMeUp launches for ‘worry-free’ education
De Mol is not alone in her effort for more diversity. With the launch of TechMeUp, The Netherlands has a fund to offer scholarships to underrepresented people in tech. The fund, that launched today, offers an interest-free loan for people to enrol in a tech-related education. The main goal is to increase diversity in the ecosystem, says one of the founding members Corinne Vigreux, co-founder of TomTom and founder of Codam.
The lack of diversity in funding is directly impacting innovation, Vigreux says: “People don’t know what they don’t know. It’s nearly impossible to come with innovative solutions to problems you cannot relate to because of who you are. So to create meaningful innovation, you need a diverse group of people in the first place. If you only have one type of people to solve issues, you’re only going to solve one type of problem, in one type of way. Innovation cannot happen without a diverse team.”
Interest-free loans for tech academies
For Vigreux, it all starts with education: “That’s why institutions like Codam Coding College not only focus on delivering a high level of education in Computer Science but also on making it accessible to the most diverse population.” In the last cohort, Codam has attracted 41 per cent women for their software engineering courses.
TechMeUp has only just started and already raised 375,000 euros for its training fund from ASML Foundation, Exact Foundation, Rabobank Amsterdam, StartupAmsterdam, CA-ICT, SIDN and the Municipality of Amsterdam. It aims to raise 2 million from the business community. Selected students get ‘worry-free’ access to private educators such as Codam, Growth Tribe, Ironhack, TechGrounds, Techionista and Winc Academy. Tuition and in some cases living allowance, ranging from 2500 to 7500 euro, are provided as an interest-free loan. Students pay it back once they find a job.
WomenTech and Founders Institute Amsterdam join forces
Another initiative that has recently launched is the partnership between Founders Institute Amsterdam and WomenTech. The collaboration between the massive pre-seed startup accelerator and the network of women in tech is part of the Amsterdam – Silicon Valley Virtual 2021. It offers access to a local and global support network of mentors, investors, and advisors, many of them women, and boasts over €1.5 million in partner deals and resources. The program is open to all founders but aims to increase diversity by offering additional support for women.
For Anna Radulovski, founder and CEO at WomenTech Network, Amsterdam is a great place to touch down, but she acknowledges there’s room for improvement on the diversity front: “Based on various research Amsterdam ranks high as a tech and startup hub. While many indicators are in the top percentile, gender diversity in tech and startups is still relatively low, implying a high potential for development and growth.”
COVID impacting female entrepreneurs
Just like Fundright, Radulovski notices the pandemic isn’t helping female founders in particular. She points at countries like New Zealand, Taiwan, Iceland, Germany and much of the Nordics, where female country leaders seemed to do well during the pandemic: “It is kind of a paradox, on one side there is evidence that female leaders are handling the pandemic better, and on the other side, female-led startups receive less funding, which could potentially serve also as solutions to issues created by the pandemic.”
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Radulovski says the collaboration between the Founder Institute and WomenTech aims to eliminate bias against women in venture capital and tech leadership. “While this is not a solution to the imminent issue, we want to help our founders to overcome and work around, by understanding how bias works, when it appears, for example, in the pitching process, and equipping them with tools, motivation, and methodologies to reach their funding goals.”
What VCs can do
But in the meantime, there are simply not enough women in the startup and tech ecosystem. Eva de Mol urges female founders not to be discouraged, but to keep thinking big and look for VCs with a track record of investing in diverse startups: “Sure, we as Fundright can do more. Create more awareness or more campaigning. But in the end, the decision lies with VCs.”
Vigreux agrees that female founders can claim their rightful spot by getting more ‘out there’. “Don’t be too modest, and show what you are capable of.” She also advises VCs to do some soulsearching as well: “They need to have diversity as one of their main goals to bring this percentage up. They can be the change.”
Header image: Eva de Mol / Fundright.nl