This article is run in collaboration with Makan For Hope, a non-profit initiative by Asia Startup Network. The Makan For Hope Festival brings notable mentors and aspiring entrepreneurs in 30 meaningful virtual conversations over food from Social Enterprises to raise S$125,000 for Fei-Yue to support the children and seniors from low-income families.
At this Makan For Hope session hosted by exited entrepreneur and investor Qing Ru Lim, she led the discussion with 10 seasoned startup founders, angel investors, and venture capitalists.
The roundtable took a deep dive into the headwinds women faced and discussed the steps we can take today to empower female founders and encourage more to thrive in the Southeast Asia startup scene.
Setting the context
Globally, venture funding allocation to female-founded companies is an astonishingly low percentage –two per cent in 2020, according to Crunchbase News.
The number is nine per cent in female co-founded companies. In Southeast Asia, the numbers are higher, though still on the low side: companies with female founders or co-founders raised 16.4 per cent of total funding.
Yet, according to a BCG study, women-led startups provide better financial returns for investors — for every dollar of funding, they generated a return of 78 cents. In contrast, male-founded startups generated less than half that.
On the investment side, only 2.4 per cent of all VC partners globally are women. Yet, having more women in funds provided higher fund returns and more profitable exits, according to a research report by Harvard Kennedy School –VC firms that increased the number of female partners by 10 per cent experienced a 1.5 per cent increase in fund returns each year, plus 9.7 per cent more profitable exits.
Data from both sides of the table suggest that females could outperform their male counterparts.
Now more than ever, we need to support more females in startups
Besides the strong hypothesis that women make great entrepreneurs, the other reason for this urgency is the COVID-19 pandemic.
More women than ever are leaving the workforce, as shared in McKinsey’s Women in the Workplace study. Without deliberate intervention, as the report suggests, it will be “unwinding years of painstaking progress toward gender diversity.”
It would also hold our economy back. Furthermore, there has been increasing investment into ESG funds to support the empowerment of women and minorities.
The timing is favourable, and there is no matter time to act than right now. But how can we increase the number from 16.4 per cent to 50 per cent?
What needs to be done, what needs to be changed? At the roundtable conversation, most believe that change needs to happen at all levels, and women also need to lead the change themselves.
More can be done to sustain the growing trend of females in tech:
At the Government level
One of the initiatives led by the Ministry of Social and Family Development is the “Conversations on Singapore Women’s Development” which aims to shift societal mindsets for a more inclusive society for men and women. While progress in recent years has been encouraging, we can do much more.
- Qing Ru Lim: suggested increasing access to funding by creating a Perpetual fund to back women-led startups (similar to SheEO, which pools money to loan to female founders at zero per cent interest) and a tax incentive scheme for female-led VC funds, which is already implemented overseas.
- Shao-Ning Huang: seconded the tax incentive scheme because tax is only relevant for profitable companies, which aligns with investors’ interests.
- Yiping Goh: shared that back in 2017, the government raised the paternity leave to two weeks from one week for working fathers. She opined that supporting men in the ecosystem is also important and believes they can create more incentives for husbands to support their wives in caregiving tasks.
At the Investor level
Investors could pave the way to empower more female founders. Women in startups often face headwinds of blinds spots and cognitive bias, making fundraising even harder than it already is.
A recent study conducted by TechCrunch found that women are asked more risk questions than men, which ultimately results in far less money being raised.
Even more surprising is that female investors typically exhibit the same gender bias demonstrated by their male counterparts towards female founders. And for most of them, they may not even be aware of it.
Here are three possible measures to lead change:
- Shao-Ning Huang: VC firms must look at ways to hire more women decision-makers, at all levels, especially at the top. This is important as female investors would have a better capacity to empathise, understand and communicate more effectively with female founders.
- Carmen Yuen: Investors or stakeholders could consider having a team of organisational development specialists offering guidance to their portfolios to overcome gender bias and implement female-friendly policies.
- Qing Ru Lim: Limited partners could promote gender diversity by requesting it to be a mandatory ESG component in Annual Reports of the funds they invest in. The same goes for investors — it will be game-changing for them to seek their portfolio companies to include how they have embraced gender diversity in their investor reporting.
At the personal level
To see sustained change, females also need to start with changing their own mindset and behaviour.
The group’s ideas boiled down to five priority areas for action:
- Senior Minister of State Sim Ann: Women need to revisit their own experiences and highlight the obstacles they have faced or what held them back. She encourages females to champion the change they wish to see.
- Doris Yee, Executive Director of Singapore Venture Capital & Private Equity Association: Education will be instrumental, such as leadership training for women leaders to change the tendency of holding themselves back.
- Edwina Yeo, co-founder, and CEO of Supermomos: She testified to the reality of gender-related subconscious bias, but also the reality that women may voluntarily decide to take a back seat after they have kids. She believes it is about paving the way to ensure these women could still score in their career while juggling other priorities, possible through more flexible work arrangements.
- Yen-Lu Chow, Co-founder and Executive Chairman, WholeTree Foundation and Over-The-Rainbow: He saw how many women, through his experience, have made a significant difference to the lives of people when allowed to lead. He urges more women to say yes to leadership opportunities — stand up, speak up, and be counted.
- Shao-Ning Huang: There is a need for female founders to be self-aware of the hero’s mindset and victim’s mindset that they tend to adopt. Both mindsets are unproductive and obstacles to building good startups. Women also need to be open to enlist help from others, use them and unitedly create a vicious cycle of female empowerment. A single chopstick may be easy to break, but a bunch of them creates a robust and unbreakable infrastructure.
Banding Together is how we can realise the vision of seeing female founders as the new normal. Here’s how you can play a part— support these ground-up initiatives listed here.
This article is co-written by Jessica Bong.
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