By Louise Doherty
There are simply too few women in the tech industry and, as a result, the industry is failing to reach its full potential. Cindy Padnos, founder of Illuminate Ventures, has gathered data from 100 studies on gender and tech entrepreneurship, and she concludes: “When you have gender diversity in an organisation, you have better innovation, and I don’t know where innovation is more important than in the hi-tech world.”
Catalyst studied the link between gender diversity in senior management and company financial performance in Fortune 500 companies. It found that women in leadership roles increased Return on Equity (ROE) by 35% and Total Return to Shareholders (TRS) by 34%.
A study by PwC showed that 42% of female board directors (but only 24% of male directors) considered racial diversity important. The turnover rate is 22% lower for companies with diverse teams, according to Cumulative Gallup Workplace Studies, which also found that companies with inclusive cultures recruited more talent.
So, it’s clear; the tech industry needs more women now, and in the future, if it is to reach its full potential. And here lies the problem: it has a serious lack of pipeline. Less than 15% of European startups are founded by women entrepreneurs. Why? Because the odds are seriously stacked against them raising the funding needed even to get a business idea off the ground.
Only 10% of investor funding goes to women-led ventures. Yet, VC-backed women-led tech firms bring in 12% higher revenue than male-owned tech companies. And their ROI is a whopping 35% higher. It’s estimated that in the U.K. alone, if every single woman who wanted to start her own business had the support to make that possible, it would immediately produce 340,000 new businesses and support 425,000 new jobs.
In other words, we need to increase dramatically the number of female-led tech businesses.
So, how do we do that? Here are a few ideas:
- Personally invest in female-founded businesses on equity crowdfunding sites like Crowdcube. Even a small amount can help that business reach its target. You’ll be supporting the next generation of tech leaders and will have a ‘stake in the game’ which could also give you good returns in the future. I’ve just raised more than £375,000 on the platform from a highly diverse investor base that will support my social planning app PlanSnap as it grows.
- Mentor a female-led business. Or set up a company-wide mentoring programme that supports women who are looking to start their own business.
- Set up a corporate business accelerator to fund women from the business you work in. AB InBev did this in partnership with Techstars in New York, a programme that I took part in. They looked inside and outside their business for innovative ideas to help them maintain a culture of innovation and an edge on talent.
- Quit your job and become a female founder yourself!
I strongly believe that supporting more women into tech businesses will help grow the industry and begin to solve its diversity problem. Diversity doesn’t just mean hiring senior women, but that is the start of encouraging a culture of diversity in all its forms – ethnicity, socio-economic, age, sexuality and more.
Louise Doherty, pictured above, is founder of PlanSnap.