Female founders, particularly in B2B startup companies, face unique challenges when it comes to gaining funding and support.
When we look at the challenges women face in entrepreneurship today, the discussion often involves the tech sector as a whole. This misses a deeper problem.
Although women are making gains in B2C startups, with women-founded Stitch Fix and Eventbrite going public in the last 12 months, women remain further behind when it comes to starting B2B companies. A 2018 analysis by Quartz that looked at the top 351 male- and female-led startups since 2013 found that only 2% of female entrepreneurs are founding B2B companies, compared with 12% of men.
As general partner of an accelerator that focuses its efforts in B2B, I see the barriers preventing women from making the leap to become founders — especially in the software as a service (SaaS) market, which is expected to reach $186 billion by 2024, most of it with B2B companies.
Differences in Mentoring and Coaching
Before they become founders, many B2B entrepreneurs gain the insight to start their companies by working at larger companies. However, in these prior roles, men and women often receive different information, mentorship, and coaching, meaning they will have varying knowledge and skills as they look to establish their own companies.
When founders come to me, I ask them about the kinds of mentorship and coaching they’ve received in their careers. Frequently, men have received coaching around business strategies and tactics, while women are coached on navigating internal politics, building confidence, and presenting themselves in the workplace. Often, women are taught how to fit into the work culture, with less focus on how to use their own strengths to get ahead.
It’s understandable how this happens. Women often face different challenges due to office environments and leadership dynamics and naturally seek guidance from mentors on how to face these immediate challenges.
But it’s crucial to make sure women receive as much tactical and strategic training as their male peers in order to be prepared for leadership roles in the long term. Without these insights, women are not in an equally advantageous position to start companies that solve enterprise challenges.
What Managers Can Do
Managers can reverse this trend by establishing lists of critical skills that all employees should be coached or trained in, so that training is equalized across genders.
In my work at Acceleprise, I coach all of our founders, one-on-one, in certain subjects — no matter what kind of business they’re launching. These include leadership, communication skills, business strategy and sales basics, and even how to ask someone for help. (Yes, people need to be trained in this!)
We also customize coaching for each participant in our program, giving them core knowledge in subjects that are specific to their business needs. And I encourage businesses to do the same with their development programs, offering specific coaching based on the individual.
The key is for all of these decisions to revolve around what helps people become strong business leaders, regardless of gender or background.
Given the disparity in how men and women are often trained, I encourage employee resource groups to help close this gap by focusing lunches and events on essential business subjects.
This focus on gender equality must also apply to the private conversations business leaders have with their reports. At times, I’ve found leaders more likely to share strategic insights informally with male reports than with women. This is due to the nature of how people spend casual time together at work and outside of work; hence, the concept of the “old boys’ club.” Gender-neutral, diverse activities that encourage the development of relationships and trust are essential to bridging the gender gap.
Of course, the disadvantages B2B female founders face must also be tackled with investors. Women entrepreneurs need investors who recognize the value women-led companies bring to the table. A study by the Boston Consulting Group and MassChallenge declared women-owned startups “a better bet,” noting that while they get much less funding on average, they perform better over time.
Leaders of investment firms need to learn to recognize the strengths of female founders, which often show up in behavioral patterns different from those of men. For example, women more often exhibit an indirect, collaborative approach. As Barnard College’s Athena Center for Leadership Studies puts it, “While perhaps newly recognized as a successful attribute in the business world, collaboration has long been a central tenet of good female leadership practice.”
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Investors should also note that, increasingly, the people inside enterprises who will make decisions about whether to buy B2B products and services are women, who often respond positively to women entrepreneurs. In U.S. businesses, women now make up 41% of employees with authority to make purchasing decisions. These figures are also on the rise across Europe and Asia.
The landscape is changing. With new development programs in place and a VC community that embraces equality, we might see the rise in female-founded B2B companies we’re all looking for.