Female technology founders are in short supply, but that doesn’t mean they want special treatment.
Instead, “we want to be treated like any man asking for investment or support in running my business,” said Vivi Friedgut, CEO and founder at Blackbullion, during the recent Women in IT and Venturers Club roundtable, which featured leaders who have won and been shortlisted in the Women in IT Awards Entrepreneur of the Year category.
Resoundingly, the founders during this roundtable were united in what they do want from an industry that is traditionally male-dominated: a fair playing field when it comes to investment.
Currently, female founders must bootstrap when it comes to running their business and they have become very good at it, as most times this is the only option.
Zara Nanu, CEO and founder of Gapsquare, who were recently acquired by RELX, confirmed “we’ve bootstrapped and grown organically on sales for the whole journey [until the acquisition], because the system is not built in a way that helps us get money.”
Different funding routes
These founders have the same funding options as their male counterparts — self-fund, venture capital and lending.
However, access to venture capital investment is disproportionally skewed towards men, with the Extend VC report highlighting that only 12% of VC funding went to female tech founders between 2009 and 2019 in the UK. The picture is even more concerning for Black female entrepreneurs, with the report concluding that a total of only 10 had received venture capital investment across a ten-year period.
Highlighting the challenge of gaining investment, but also an alternative route to funding her business, Elizabeth Vega OBE, Group CEO and founder at Informed Solutions, commented: “I have a degree in economics and computer science, and I’m the byproduct of big corporates for my management graduate training. I joined Unilever and then ran the aeronautical engineering systems at Hawker Pacific before joining tech giant Oracle. My background was ideally suited to setting up a tech company, even as a female. But, I couldn’t get funding. So, like everyone else, I had to bootstrap.”
Looking for funding elsewhere, Vega moved away from the VC market and approached high street banks.
Informed Solutions is now funded through the NatWest Group – which has provided the company with good project funding, export funding, working capital and overdrafts, as needed to scale.
“Sometimes people think equity in the VC market is the only end of town. But, with banks – even though it’s a longer journey if you want to accelerate and exit – it’s less onerous; they don’t expect equity and you have a lot more freedom to do things your way, as long as your business model is self-sustaining and you have the discipline to reinvest profits for growth – you can grow a company nicely, without so much stress,” Vega added.
Like Vega, Nanu’s Gapsquare didn’t opt for VC investment. The company grew organically through sales for five years until they decided to scale when they were acquired by RELX.
She commented: “Most of my peers who spent all their time focusing on investment, didn’t take the opportunity to hone their skills, make a minimum viable product and sell it. They took years taking investment and their businesses were only worth the investment being put into the business. If you bootstrap, it’s a challenge, but it allows you the freedom to do what you do best.”
Vega highlighted these restrictions: “With external investors, they have already got a pre-agreed plan to execute an exit strategy, and part of the investment is complying with that strategy. Your autonomy is hindered to an extent.”
Elena Sikorsky, CTO and co-founder at digital agency Ink Mills, explained how a challenge to get VC funding led to a new business. “When I secured a solid angel investment for the first fashion tech startup, VC was viewed as the next stage. We ticked all the boxes apart from one — having a co-founder with a tech background. This ‘failure’ served as a turning point and I secured a place in one of the first cohorts at Code First Girls, a company that transforms tech by providing coding classes to female founders. The co-founders Alice and Matt started the company back in 2012 as they noticed a lack of women applying for their VC Entrepreneur First accelerator programme. Upon completing the course, I identified a market gap where startups needed a more affordable set of digital services on the market
and that’s when our agency stepped in.”
However, every entrepreneur is different and for many, VC investment is the right choice for them, their business and leadership team.
“When it comes to investment, I have had innovate UK, horizon 2025, NHS and family office funding. In my experience, these investors have given me the autonomy to grow my company sustainably, while giving me guidance and access to a great network. They based their investment on my five-year business plan and making sure we stick to this is my priority,” she said.
“I work through the lens of a big company working with entrepreneurs – helping startups get business from CVCs and a share of IT budget from big corporates so that they could fund themselves, rather than go out and need to give away equity or take on debt. Over the last 10 years, as corporates shift their strategies, there have been a pipeline of clients with huge pockets, who don’t know how to change or do the things they need to do, while there has been an explosion of entrepreneurs who know how to make things happen. How do you bring these two groups together?
“What we found was the need for an invisible intermediary or translation agent, to enable that connection and facilitate and tap into entrepreneurial talent in a way that works for the entrepreneur, and not just for the corporate.”
What does it take to succeed as a founder?
Aside from funding a business, there are many other factors that lead to succeeding as a founder.
Sikorsky said: “there are three core pillars that we need as female tech founders.
“One is vision: without a clear business vision we cannot communicate the goals we set out for to our investors, co-founders and the rest of the team.
“The second is resilience, because it’s going to be an arduous journey and being adaptable as an entrepreneur is an excellent advantage.
“And, third is agility, as we see updates and trends every day while working in a tech startup or a digital agency, we have to adapt and learn new things in a fast and versatile style.”
Achan also suggests that as founders, “we have to have an imaginable level of self-belief, because people are going to make assumptions about you before you’ve spoken. For me, they often assume I’m in a lifestyle or social justice business, or something to do with your ethnicity, when in fact, I work in the $36 billion potato processing industry and it’s nothing to do with being black, or a woman. Everyone eats food and needs food preservation systems.”
Diversifying the future: diversity trends in tech for 2021
The diversity challenge
There is currently and will continue to be a huge need for jobs in technology, whether that’s in IoT, cyber security, data science or AI.
These roles are traditionally male dominated, while female dominated jobs, that are typically lower paid, such as in accounting or retail, are on the decrease.
“We need to shift how we think about certain jobs. What does a data scientist’s job entail? Is it only about understanding Python or do they need to also have very good, solid understanding of the business,” asked Nanu.
“We need to turn the system on its head, because if we don’t, by 2025, the entire sector and global economy will be even less representative of women,” she added.
Achan suggested that one way this could be achieved is by “talking about the practical applications of tech to make it more interesting and relatable to women – blockchain for traceability in food systems or machine learning in power generation, for example.”
Culture change to champion diversity of thought
The lack of diversity, whether that is gender, racial, background or sexual orientation, in the technology industry is well documented. This leads to a lack of diversity of thought within businesses that can create negative environments, but also the potential successful growth of the organisation.
There are a variety of reasons for this imbalance. Nanu suggested the lack of diversity “is a symptom of occupation segregation, a lack of women in senior roles,” while Vega explained that in her view the reason women don’t go into data engineering, AI and ML “is because the environment is not welcoming to women.”
To address this in her company, Sikorsky believes in the continuous education of the team as it contributes to a stronger variety of thought.
“As a tech company we partner up with various leading software development providers. For instance, we work with Bitrix24 SaaS CRM platform and effectively use their solutions and training courses to upgrade the skills of our team. Constant learning allows a tech company to build upon the unique expertise and in addition to encourage diverse fresh input from every employee.”
Going one step further, some founders at the roundtable believed that some organisation’s, perhaps the larger corporates that are more established, need to undergo a significant culture change to champion diversity of thought in their organisation.
Vega commented: “Companies that are innovative, successful and competitive are diverse, but I think if you only try to engineer diversity, I don’t think it changes the culture. It’s not sustainable if it’s not built into the foundations.”
To ensure this foundation of inclusivity, Vega started Informed Solutions based on an egalitarian culture – where everyone’s input in encouraged, not in the context of things like gender or race.
“Last year, 68% of the technical graduates going into tech jobs in our company were women, because we have a workplace, that is not just tolerant of women, but accepting and welcoming of women, partially to do with my active contribution to the culture and to do with our reputation,” she said.
“We’re not made of glass”
In concluding the roundtable, Friedgut suggested that while it is harder being a woman, this should not define whether they should pursue the founder journey, or any other career.
“We’re not made of glass,” she said. “Of course, we should create businesses that are welcoming, but we don’t need a man to help us on this journey. Being a woman is a superpower and we should use it positively.”