Why Indian venture capitalists must stop discriminating against women founders
I am a mother of a seven-year-old and a serial entrepreneur. I started my latest company Sheroes, an online portal that helps women of all age groups find jobs and career resources, last year. While I was trying to raise funding for my startup, these were the two questions most investors asked me:
“Do you have male co-founders?” and “Is this your husband’s venture?”
The answer to both the questions is no. I funded my startup myself.
In theory, the startup and venture capital (VC) world is gender-neutral. But the reality is very different. Men in their 20s populate the Indian startup scene. They dress and look alike, share similar interests and possibly similar education background. There are many talented people who do not fit this mould, and are sadly excluded from the elite club of well-funded, successful Indian entrepreneurs.
According to several investors, women entrepreneurs—whether they are married or unmarried—are bad bets. Some of the reasons behind their disdain are: they lack aggression, they have no tech background and they might have children.
Most prominent Indian VCs feel that women are not pitching businesses worth investing in. This is only partially true. While many women set up businesses that cater to a very small market and are not scalable, it is not the entire picture. Out of every 10 pitches an investor hears, only two are worth taking forward. And this rule applies to both men and women entrepreneurs.
Rise of sheconomy
The spending power of Indian women is steadily increasing and they are changing the way corporates operate. Sheconomy is here to stay. A plethora of businesses are now built, run, supported for and by women.
Limeroad (an online shopping portal for women), Zivame (lingerie shopping website), Popxo (fashion website) are a few new, scalable and innovative models in this space in India.
Don’t wait for the Valley
The sexism is not the fault of VCs, but the patriarchal society we grew up in. Most teams at VC firms, especially in India, are led by men. Women are at associate or secretarial levels. Having few women at organizational levels sets the tone for gender exclusivity.
While we admire the innovative spirit of Silicon Valley, we don’t have to import the mistakes the Valley ecosystem has made—sexism, among others. (An informal study of the Valley’s technology firms found thatthere are only about 15% female engineers across almost 200 companies.)
India is home to a very large number of entrepreneurial women. Many women in India leave their jobs after getting married or having children. According to a study conducted by my company, women find it harder to come back to their corporate jobs—especially if they had high-paying, senior profiles—after such breaks and prefer starting their own companies.
The VCs have to realise this. This is a potential opportunity.
For many years, I have been hearing about plans to set up a women-only venture capital funds in India. Such funds exist in the US also, but usually the investments they make are very small.
I believe that such a separate fund in not the real solution. We need to build an ecosystem which is actually gender neutral and pro-choice.
This was originally written and published here on Quartz.