{"id":24402,"date":"2023-06-19T03:28:34","date_gmt":"2023-06-19T07:28:34","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/why-its-still-harder-for-women-to-get-funding-for-their-start-ups\/"},"modified":"2023-06-19T03:28:36","modified_gmt":"2023-06-19T07:28:36","slug":"why-its-still-harder-for-women-to-get-funding-for-their-start-ups","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=24402","title":{"rendered":"Why It’s Still Harder for Women to Get Funding for Their Start-Ups"},"content":{"rendered":"
\n

The bar for female-founded businesses to find success continues to be \u201cincredibly high\u201d as women in the corporate world face a dearth of funding and uncertain economic conditions, said Ann Chung, senior managing director and global head of consumer for Blackstone Growth.<\/p>\n

Chung and other panelists discussed a range of topics relevant to women in business during the Barron\u2019s<\/em> Level Up event in New York on June 14, including the challenges female-founded start-ups face when searching for funding, how to navigate economic headwinds and lessons learned on their path to entrepreneurship.\u00a0<\/p>\n

\n

Here are the takeaways from the discussion.\u00a0<\/p>\n

Barriers to Entry <\/h2>\n

Research shows that female-founded start-ups only received 2% of venture capital funding in 2022. Comparatively, women who pitched their company with a man in the room received roughly 16% of funding.<\/p>\n

Kathryn Minshew, co-founder of online career platform The Muse, highlighted the challenges associated with being stuck \u201cinside\u201d statistics that showcase how underrepresented female-founded businesses are in the venture capital world. Women have to be \u201cphenomenally buttoned-up\u201d when pitching their start-up, she said.<\/p>\n

Uncertain Solutions<\/h2>\n

Chung said the finance world has found itself \u201cat a loss\u201d for how to address systemic barriers to funding female-founded businesses. To increase investment in women-led start-ups, corporations need to hire more women who will write checks, Chung said, but those roles continue to be dominated by men.<\/p>\n

\u201cThere hasn\u2019t been movement in the way that I think we would all really like it to be,\u201d she said. \u201cIt\u2019s really about cultivating cultures and organizations that are open and honest, and that are freely accepting of women and their ideas.\u201d<\/p>\n

Finding Funding in an Unsteady Economy<\/h2>\n

While working to fund new start-ups during uncertain economic times, Chung has prioritized connections with businesses that have reached profitability. With some consumers limiting their spending because of inflation, businesses must prove they can weather precarious economic conditions. \u201cEspecially if you\u2019re a female founder, I\u2019ve found that the bar is even higher and that you do have to have all your I\u2019s dotted and your T\u2019s crossed,\u201d Chung said.<\/p>\n

Female-founded start-ups often generate more returns with less capital because of the funding barriers they face, Chung said. Blackstone is seeing a lot more female-founded businesses using their resources more wisely and \u201cdoing more with less,\u201d she added.\u00a0<\/p>\n

Although Chung acknowledged that these start-ups face a long road to profitability, she said that once they cross a certain growth threshold, there is a \u201crush\u201d of success.<\/p>\n

More broadly, Chung sees consumers changing their habits because of the economic backdrop\u2014they are willing to spend more on premium products in some portions of their budget and are trading down in other areas. The result: Private labels are taking more market share, the middle market is getting hallowed out and the premium markets are in good position\u2014an area Chung is looking at more closely for opportunities.<\/p>\n

The Future of Work<\/h2>\n

As businesses try to get employees to return to the office, women still heavily favor roles that provide remote opportunities, Minshew said.\u00a0<\/p>\n

According to recent metrics from Minshew\u2019s company, 75% of all workers are considering switching jobs in the next year. That\u2019s a ten percentage point increase from last year\u2019s metric, she said.<\/p>\n

<\/p>\n
<\/p>\n<\/figure><\/div>\n

Workers can now see more of other companies\u2019 culture and opportunities with the rise of social media, leading to higher discontent, Minshew said. That discontent is punctuated by a new workforce attitude among younger generations. According to a recent survey by The Muse, 80% of Gen Z and millennial employees believe it is acceptable to leave a new job in less than six months if their day-to-day role isn\u2019t as advertised.<\/p>\n

The dominant narrative around career growth for centuries placed emphasis on an employee\u2019s commitment to their company, Minshew said. As younger generations abandon that mind-set, she predicts this \u201cseismic change\u201d will rattle companies with what could be high turnover rates.<\/p>\n

What Trips Up Company Growth<\/h2>\n

New companies tend to get bogged down when they make too many investments in overhead before they grow, Chung said. That can make them less attractive candidates for funding from major investment banks.<\/p>\n

\u201cWe look for businesses where the demand has outstripped the infrastructure,\u201d Chung said. \u201cThose are the companies we actually prefer because we can ask value-added investors to help them build out infrastructure.\u201d<\/p>\n

Establishing a Support Network<\/h2>\n

Women looking to improve their investment prospects can also find success by establishing a network of people they have interacted with throughout their careers\u2014and can turn to for guidance. <\/p>\n

Chung feels the \u201cgirlboss\u201d era of the 2010s\u2014which described women who cultivated their own businesses but was criticized for emphasizing individual advancement over collective women\u2019s empowerment\u2014is over. <\/p>\n

Those who have found career success now have a responsibility to uplift other women, she added. This support is crucial because so many women in the corporate world struggle with self promotion, which can be an \u201cincredibly hard skill to learn and develop,\u201d Chung says. <\/p>\n

\u201cRather than transforming ourselves for the system, we should change the system and we should all be promoters for others,\u201d she said.<\/p>\n

Minshew said it is equally important for women to explicitly ask for guidance and advocate for themselves to advance their goals. When female founders pair this with a strong support for other women, they hit on \u201cthe most powerful secret weapon,\u201d she said.<\/p>\n

Write to editors@barrons.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The bar for female-founded businesses to find success continues to be \u201cincredibly high\u201d as women in the corporate world face a dearth of funding and uncertain economic conditions, said Ann Chung, senior managing director and global head of consumer for Blackstone Growth. 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