When Indian businesswoman Tanul Mishra talks about the first step in her entrepreneurial journey, she recalls when investors reminded the now co-founders of Afthonia Labs about raising their children. “And the children?”, asked the investor to the women entrepreneurs when they proposed to him to finance their former organization “Eatelish”.
However, the female entrepreneurs sarcastically responded to the investor and said they did not believe in child labor, pointing to the lack of close contact with children in the workplace to maintain work-life balance. and personal.
“As there were two of us women entrepreneurs and during one of these pitches, the investor asked us what about the children? In a humorous way, we replied that we do not believe in child labor. »
Working women sighed with the rigid thoughts of a male-dominated society after being confronted with the patriarchal mentality of investors. According to her, “such a question may never be asked of male entrepreneurs”.
“These are some of the examples of bias that we see in the ecosystem. As mentioned, I have worked in the executive sector before, so the investment cycle has been much easier for Afthonia,” said Tanul Mishra. Living mint.
While the scenario was completely different in other countries. Tanul compared India’s fundraising situation with that of the United Kingdom, China and the United States, where women do not face difficulties. gender funding gap.
She told us: “When I looked at other ecosystems like the US, UK and China, they had a very structured support system to help. startups in the form of incubators and accelerators. This motivated me to create Afthonia, a structured ecosystem to grow startups.”
Afthonia’s idea is to focus on fintech (a combination of money and technology), influenced by the fact that it is a complex sector with far-reaching implications, she added.
According to government data, India ranks 57th out of 65 in the MasterCard Women’s Entrepreneur Index, which gauges the progress of women in business globally, and only one in five businesses in the country is led by a woman. .
However, unequal access to capital is a major obstacle for women entrepreneurs. When women entrepreneurs approach potential investors for funding, they are more likely to be rejected.
Many Indian small businesses are either self-funded or funded with family support – two more difficult situations for female entrepreneurs. In a survey by Bain & Company and Google, 43% of women said their family and spouse didn’t support their business, causing them to seek funding from others.
In 2021, only 0.3% of the Indian population venture capital financing went to female-led startups. A 2022 survey by non-profit organization Bharatiya Yuva Shakti Trust (BYST) said that more than 85% of women entrepreneurs have faced difficulties in availing loan services from public sector banks.
It is pertinent to note that the Indian government has financial support programs for women-led businesses, but only 3.4% of all women entrepreneurs have benefited from them, according to a study by the Initiative for What Works to Advance Women and Girls in the Economy. (IWAAGE).
However, exceptions always exist. Some businesswomen have a smooth entrepreneurial journey while seeking funding.
Ritambara Das, co-founder of Better Beauty grew up in a family of entrepreneurs and was therefore fortunate enough to encounter relatively less funding problems than others.
“I was fortunate to have established connections and investor support early on. Indian female entrepreneurs presented their own obstacles. One of those challenges was navigating a male-dominated society. Despite significant advances in gender equalitygender biases and stereotypes continue to influence various aspects of business and entrepreneurship, leading to an undervaluation of women. direction abilities,” Das said.
She recommended that women focus primarily on building a strong network that involves finding mentors, joining entrepreneurial communities and attending networking events to bridge the gender funding gaps in the sector. Indian startup ecosystem.
Other than that, women entrepreneurs should actively seek funding sources that specifically target women-owned businesses, as many venture capitalists are keen to promote women entrepreneurs in today’s world, a said Das. Living mint.
Harsirjan Kour of the PedalStart founding team also recalled one such incident where the investor also discussed his personal life choices or being subjected to more averse assessments in risk than their male counterparts.
“Many potential investors express a lack of confidence or interest based on assumptions or stereotypes about women’s abilities in certain industries or business areas,” Kaur said.
When it comes to funding, women entrepreneurs often find themselves scrambling to convince investors of their seriousness, dedication and abilities – an uphill battle that requires showing up with increased strength, she added. .
Therefore, she recommended that believing unwaveringly in your vision and constantly working towards achieving it are crucial factors in overcoming the gender funding gaps faced by women entrepreneurs.
Meghna Mittal, co-founder of Hoopr, said she remains focused on making her business idea customer-centric as it has helped her a lot in convincing funders to invest their money.
“By highlighting the compelling market need, I presented a clear picture of why our product/service will find favor with target audiences. Such a fact-based and needs-driven approach appealed to lenders and allowed them to focus on real issues rather than making decisions with subjective issues such as gender of the entrepreneur in mind. , among others,” Mittal said.