Insights

How Overcoming Bias Can Add Billions Of Pounds To The Technology Sector

Monday 8 November 2021

There are some fantastic female leaders and founders in the technology sector who are ready to rapidly accelerate their startups.

It’s estimated that by investing in these women-led businesses we could add £200 billion to the UK economy.

 The 200Bn Club is an organisation that is committed to decreasing the gender gap that’s prevalent in the investment process, and getting more people investing in these highly successful businesses.

Founders Bridget Greenwood and Dr Amber Ghaddar joined us on our podcast to discuss what needs to change.

You can hear the full conversation on episode 25 of “Extraordinary Entrepreneurs Together”.

 

The main issues

At EHE Capital, we recognise that the female tech market is underserviced. It needs support and backing. During the podcast, Amber explained the main issues.

Amber: “We identified four drivers that make women less investable than men:

  1. Deal flow.
  2. The pitch.
  3. Due diligence.
  4. Deal closing.

Most of the bias occurs in the deal flow and the pitch. There’s a lot of unconscious bias.”

Amber explained that it was harder for women entrepreneurs to have indirect access or a warm introduction to venture capitalists because they often had smaller networks in this sector.

Bridget went on to explore why this is the case.

 

Systemic bias

Bridget: “Female founders had 2.8% of venture capital funding (globally) at their peak (pre-pandemic). The share of funding has dropped dramatically since then to 2.3%. The investors themselves chose to double down on the investments they already had, which meant that new female founders were left out.

It’s not as though we believe that everyone is withholding money from women, but there are systemic biases that we need to educate people about. The bias comes from investors full stop, whether they’re female or male. Women are treated based on their experiences, and men treated based on their potential.

Men are asked questions around what they will do when they achieve a business goal, whereas women are asked how they plan to achieve it. This leads to the investor choosing between what the woman will achieve and the man’s grand vision of his potential.”

The 200Bn Club has data to back this up.

 

Stereotypes

A 2014 study showed that when a CV is put forward with a man’s name, he is more successful than that same CV presented with a woman’s name. It’s the same with a pitch: if the identical storyline is delivered by a man, he’d get the funding. The woman would not.

Bridget: “In our subconscious mind there’s a stereotype as to what we believe a leader should look like. We ran a study with a small number of participants showing a picture of a man that looks like Bill Gates (tall, skinny, badly dressed with glasses), and a female equivalent. We gave the participants two choices as to who the person was.

90% of the responses said the female version was a science teacher, but the male? CEO of a tech company. We did the same with images that looked like Winston Churchill and Margaret Thatcher. The male was identified as a politician, the female? A librarian.”

It’s obvious from what’s been shared so far that there is an issue to be addressed.

 

Leadership styles

Amber: “I’m a proponent of pushing women to change certain behaviours, especially when they are pitching because it’s easier to adapt. If you want to grow your business, you need to get the money. No money, no business. Part of the training we are delivering at the 200Bn Club is around how best to interact with investors.”

Amber and Bridget have slightly differing views on how best to secure investment.

Bridget: “There are usually two styles of leadership. One is circular, transformational, co-operative and with a preference for flat structures. The other is more pyramidal, transactional, competitive and with a preference for hierarchical structures. Most males fall into the pyramidal structure, and females the circular structure.

I believe in getting the result (the investment) 100%, but I don’t think we should do it blindly. If you have portrayed one style of leadership and that’s what the investor has bought into, I think there’s potential conflict if you cannot be yourself in your business.”

Bridget and Amber have agreed on a clear way forward.

 

Best approach

Bridget: “We need to open up the network to female founders so we immediately get rid of the problem of how we get women in the door to deliver a pitch. The second is to be pitch-ready. They’ve got to recognise if they’re being asked a preventative question and turn that around to a promotive one. We also need to look at how to get more female venture capitalists.

Data shows that if you’re investing in female-led businesses, you’re going to get higher returns and higher profits.”

 

Next steps

The 200Bn Club is looking to bring investable businesses into a 12-week accelerator programme where it will teach you how to pitch effectively, negotiate powerfully, and put your business in the best possible position for funding success. It will also put you in front of a network of investors seeking startups just like yours. 

You can find out more information and apply for the three-month training programme here; and if you are interested in supporting 200Bn Club’s vision to invest in more female founders and help create a powerful network to do that, you can get involved here.

If you have a question for EHE Capital or would like to talk to us about mentoring or funding support, then contact me at guy@ehe.capital

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