Start-up funding for Woman and other minority groups

Trends & challenges

By Virginia Linehan

Have you ever noticed business managers, leaders and successful entrepreneurs all over the world are mostly white men? Throughout the world, white men can fail in business, pick themselves back up, dust themselves off and start all over again. Whilst they are allowed to fail it appears unlikely that woman and minorities are given the same equal opportunity. To get others involved in the economy perceptions and attitudes need to change. Woman and minorities need to feel that it is ok to fail and not to get it right the first time or every time. The bias is not due to better education, more income or social capital but rather white men are given more chances to take risks. In doing so “they are allowed to fail and succeed in greater numbers than women and minorities”. (Clay & Camfield , 2011).

Access to funding is harder for women entrepreneurs according to Global Invest Her, the online platform dedicated to funding for Women Entrepreneurs (Global Invest Her, 2015). Unconscious bias plays a big role in holding women (and minorities) back resulting in missed opportunities and preventing them from reaching the top (Chu, 2014). Unconscious bias is defined as “our implicit people preferences, formed by our socialisation, our experiences and by our exposure to others’ views about other groups of people” (University of Leicester – Department of Physics and Astronomy, 2015). Unconscious bias is in the minds of all – women and minority entrepreneurs and investors alike. It has played a big role in why less than 5% of ventures receiving equity capital had women on their executive teams (Brush, 2014).

Despite the fact there is more women than men in Europe, female entrepreneurs account for slightly over one third of the self-employed within the EU. Statistically, women make up 52% of the total European population but only 34.4% of the EU self-employed and 30% of start-up entrepreneurs (European Commission, 2015). The European Commission has recognised this gender gap and states that female entrepreneurial potential and creativity are an “under-exploited source of economic growth and jobs”.  The Commission recommends further development in this area. Access to finance and information, training, access to business networks and reconciling business and family are cited as the main challenges faced by female entrepreneurs (DG Enterprise and Industry European Commission, 2008). While this data comes from a report commissioned in 2008 it remains a live link on the European Commission’s website which suggests the report and its recommendations remain valid today. The European Commission promotes and supports female entrepreneurship through the Entrepreneurship 2020 plan and Small Business Act (European Commission, 2015). One of the main initiative is to promote and support networking amongst female entrepreneurs through a series of networks such as the Women’s Enterprise for Sustainability (WES) – the European network to promote women’s entrepreneurship, a European network of female entrepreneurship ambassadors, a European network of Mentors for women entrepreneurs and an E-platform acting as a one-stop-shop for women entrepreneurship.

The Irish government, in its National Policy Statement on Entrepreneurship in Ireland, has recognised the under-representation of certain groups in entrepreneurship in Ireland namely women, migrants, youths and seniors. The statement acknowledged the need for tailored, transparent and inclusive policy intervention to increase the entrepreneurship levels of these underrepresented cohorts (Department of Jobs, Enterprise and Innovation, 2015).

On November 11th 2015, Enterprise Ireland (EI) announced a €500,000 fund for female entrepreneurs with an application window of two weeks. “Ensuring that business women realise their full business potential is critical to Irish Economic prosperity” was stated as a major priority for Enterprise Ireland. Recognising the European commission and international research, EI cited lack of role models and technical expertise, low self-confidence, limited access to networking opportunities and lower levels of risk taking as the main challenges facing female entrepreneurs in 2014 (Enterprise Ireland, 2015). Through the Competitive Start Fund (CSF) women entrepreneurs were encouraged to apply for a funding to the value of €50,000 each. The CSF called for applications from female entrepreneurs or female –led new start-up companies active in the manufacturing and internationally traded services sectors including subsectors such as Internet, Games, Apps, Mobile, Saas, Cloud Computing and Enterprise Software amongst others. The fund was open to early stage companies who met the criteria outlined by EI including the capability of creating 10 jobs in Ireland and realising sales if €1m within 3 years of starting up (Enterprise Ireland, 2015). EI Female Entrepreneurship Unit was established to address the under representation of female-led start-up business to give tailored and focussed support including co-funding development programmes such as Going for Growth, NDRC Female Founders, DCU Ryan Academy and CIT Rubicon Cork as well as sponsorship of women in business awards to identify and promote role models through the Image Business Awards and Business Networking for Women Across Ireland.

In recognition of younger people as an under-represented group in entrepreneurship, EI launched Ireland’s Best Young Entrepreneur (IBYE) competition on the 27th May 2015. IBYE is a national competition administered through 31 Local Enterprise Offices throughout Ireland with a €2m investment fund. This was a tailored response by the Department of Jobs, Enterprise and Innovation to foster a spirit of entrepreneurship at an early age targeting 18-30 year olds.

It appears that migrants and seniors identified as a under-represented group remain untapped at this time. It is hoped that the government will give the right tailored and focussed funding and support to these cohorts.

Through government policy and intervention giving the right support and opportunity for women and minorities along with a change of mind-set on a global scale women and minorities can play their part in creating a diverse population of a world-wide network of successful business leaders and entrepreneurs. This will pave the way for a level playing field where women and minorities, just like the white man, can perceive failure as part of the road to success.

References

Brush, D. C., 2014. Diana Report. [Online]
Available at: http://www.babson.edu/Academics/centers/blank-center/global-research/diana/Documents/diana-project-executive-summary-2014.pdf
[Accessed 29 November 2015].

Chu, T., 2014. How unconscious bias holds us back. [Online]
Available at: http://www.theguardian.com/women-in-leadership/2014/may/01/unconscious-bias-women-holding-back-work
[Accessed 29 November 2015].

Clay , A. & Camfield , J., 2011. To Succeed, Women And Minorities Need To Be Able To Fail. [Online]
Available at: http://www.fastcoexist.com/1678889/to-succeed-women-and-minorities-need-to-be-able-to-fail
[Accessed 29 November 2015].

Department of Jobs, Enterprise and Innovation, 2015. National Policy Statement on Entrepreneurship in Ireland. [Online]
Available at: https://www.localenterprise.ie/Documents-and-Publications/Entrepreneurship-in-Ireland-2014.pdf
[Accessed 29 November 2015].

DG Enterprise and Industry European Commission, 2008. Evaluation on Policy: Promotion of women innovators and entrepreneurship, Brussels: GHK, Technopolis.

Enterprise Ireland, 2015. Calling all Ambitious Women, Your Potential is our Priority. [Online]
Available at: http://www.enterprise-ireland.com/en/Start-a-Business-in-Ireland/Startups%20led%20by%20Ambitious%20Women
[Accessed 29 November 2015].

Enterprise Ireland, 2015. Competitive Start Fund for Female Entrepreneurs. [Online]
Available at: http://www.enterprise-ireland.com/EI_Corporate/en/funding-supports/Company/HPSU-Funding/Competitive-Start-Fund-for-Female-Entrepreneurs.html
[Accessed 29 November 2015].

European Commission, 2015. Female entrepreneurs. [Online]
Available at: http://ec.europa.eu/growth/smes/promoting-entrepreneurship/we-work-for/women/
[Accessed 29 November 29].

European Commission, 2015. The Entrepreneurship 2020 Action Plan. [Online]
Available at: http://ec.europa.eu/growth/smes/promoting-entrepreneurship/action-plan/index_en.htm
[Accessed 29 November 2015].

Global Invest Her, 2015. Our Mission – We Demystify the Funding Process so Women Entrepreneurs. [Online]
Available at: http://www.globalinvesther.com/en/homepage/about-us#our-mission-and-team
[Accessed 29 November 2015].

University of Leicester – Department of Physics and Astronomy, 2015. Unconscious Bias. [Online]
Available at: http://www2.le.ac.uk/departments/physics/people/equality/unconscious-bias
[Accessed 29 November 2015].

 

 

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