Karima-Catherine Goundiam is chief executive officer at Red Dot Digital Inc. and B2BeeMatch
I was on Twitter one day chatting with a few venture capitalists when one of them wrote, “Any moron who comes out of college with an idea can get a cheque for $4-million.” When I asked why I wasn’t getting cheques like that, he responded: “Show us what you can do.”
It was a short conversation, but to me it showcased a set of contradictions that I’ve come across multiple times in my journey as a small-business owner. Why do some people have startup money thrown at them while others struggle to drum up any interest from funders?
A clue to the answer is right there in that brief exchange. See, I’m no moron, and I graduated from college many years ago. I’ve got lots of ideas and I run a successful small business. According to that venture capitalist’s first statement, all this should make me an excellent bet as a funding recipient. I should be rolling in venture capital.
But I’ve received only minimal external funding in my time as an entrepreneur. Why is that? Because for me and people like me, a college education, an idea and basic intelligence are simply not enough. People like me also need to have a track record we can flash as proof that we’re a good investment. And by people like me, I mean women in particular, and women of colour all the more so.
Women are judged more stringently than men
In my experience, there’s a segregated system operating in the realm of funding for small businesses: Men are assessed on how promising their ideas sound, while women are judged on whether they’ve already delivered.
My experience is very much in keeping with the documented inequities in small-business investment. For instance, as noted in another Globe and Mail article, in pitch meetings, male entrepreneurs get quizzed about their plans to promote their businesses while female entrepreneurs are asked how they plan to anticipate and prevent problems. This skews the tone of the conversation, and it’s not in women’s favour.
This gendered difference in funding isn’t surprising. It matches up with other kinds of inequities in how men and women are judged in the workplace. For instance, a recent set of studies showed that when they’re being hired, men are evaluated only on their skills, whereas women are judged on their competence, social behaviour and morality. As well, a study released in 2019 found that, for managerial positions, male job candidates are largely judged by their potential, while women tend to be evaluated based on their past performance.
In short, the research shows that two different assessment systems operate at every level of the business world, whether you’re an employee, a manager or a founder seeking to move your business to the next level.
Female founders need hard cash, not soft skills
Some suggest that female entrepreneurs need more mentorship and coaching in order to surmount the problem. It sounds supportive, but I actually disagree with this idea. Women aren’t naturally less able to succeed in business, and I think it can be patronizing to suggest that we need extra help.
In one of my attempts to secure funding, the funder wanted to refer me to resources and give me mentorship. I responded that what they were offering wasn’t a good fit. I told them that I’d done the homework, I had the business relationships, and I knew what I needed: cash. Their response was to tell me I was being pigheaded.
After that experience I decided I didn’t want investors; I wanted to do it on my own. Ultimately I’ve been quite successful. But the experience left me with a lingering bad feeling. If mentorship is intended to help us succeed, but this is the kind of reception we get when we ask for the money we need to actually achieve that success, what good is that mentorship?
The mentorship line is even promoted by businesswomen’s groups. Not long ago, I was asked to be part of a group for women who run $1-million businesses. The group was offering mentorship. But think about it: If female entrepreneurs have reached the point of operating a million-dollar business, they don’t need mentorship – they’re already succeeding. Chances are, they could use investment to support their next moves: expansion, diversification, research and development. But even with proven track records, women are treated as though we’re still in need of soft skills and connections rather than money.
Give women free rein
The numbers don’t lie. This fall, The Globe covered the jaw-dropping information about how little venture-capital funding female startup founders receive: just 2.3 per cent of the worldwide total in 2020. To me, this tells a clear story about funders’ lack of willingness to take a chance on female entrepreneurs to the same degree they do with men.
The problem for female business founders lies entirely in the lack of opportunity. We can fix ourselves and hone our skills as much as we want, but ultimately, if funders are judging us on unfair criteria, all the mentorship in the world won’t make much of a dent in the real issue.
Rather than giving us mentorship, I want funders to give women money, and then give us free rein. Let us learn, the same way men do. Let us take risks, and accept that some entrepreneurs will fail. Funders let men run unsuccessful businesses, and it doesn’t seem to stop them from continuing to fund them at a much greater degree. I want them to treat women the same way. It’s by taking that kind of chance – equitably, by funding businesses run by people of all genders – that we see success.
Give us the funding, and then we will show you what we can do.
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