IWD 2024: Bridging the gender gap for women tech founders

Technology startups happen when someone has a good idea, a bunch of college graduates' mastermind an innovation where they see a gap, or a problem needs solving in a business. Many tech startups are bootstrapped, but as I was privy to in December 2022, some are just based on an idea.

In 2022, I listened to a pitch by a man who talked about what ChatGPT could do to an audience of 30 or more investors. As he explained its ability to write, design and reimagine, the audience was frothing at the mouth. The pitcher's aim was to raise $20 million to build solutions that complement ChatGPT and use GPT-3, which was the most updated version at that time. Days later, I asked one of the organisers, "How much did they raise?". The Answer: We fell short. We raised US$12 million, but we still have some more follow-up to do. 

My immediate reaction was being 'pissed-off'. Here, I had a startup, essentially in the terra incognita of innovation, revenue positive, clients and a channel for sales secured, and I struggled to raise 1 million dollars.

I began speaking to 'Female Funds' and I fast realised that these funds love retail founders and companies they can understand. They also could wrap their heads around health-related startups but when you move away from these categories, they were stumped. In fact, on more than one occasion, I was told that their fund could invest if I had more partners in the business. That experience deflated my appetite for raising capital, and I stopped.

You see, I had been in marketing for 30 years at that point, of which over 20 years owning my own agency and 18 years of developing technology in one form or another. I had built multiple million-dollar businesses, and my startup disrupted an industry that was still using a manual approach to strategy. I could get sales but had to constantly go back to ensure my other businesses were bringing in enough profits to fund the startup, which had a number of PhD AI specialists, Python Developers and Data Scientists whose salaries, even at a starting point, were more than $100,000. 

This disturbing trend echoes the halls of venture capital (VC) firms and boardrooms is sometimes an unconscious bias against women tech founders but it remains there no matter which label is placed on a VC fund. Many women realise that 'Female Funds for Technology Innovators' are quite often subsidised by tax payers and struggle to find female only founders because they don't want to look hard enough or still sit in the mindset that there needs to be more than one founder. 

Further disillusionment comes for female-only founders when you look at how many of the female-led tech startups are from 'husband and wife' or 'brother and sister' teams. While it may not be the case, it does sometimes feel like there is more opportunity to get investment if you push the woman out in front. While I am not saying this is a fact, although I have heard this situation from 'the horse's mouth' previously, I can't help but wonder.

Women founders are not struggling to secure meetings with potential investors; their battle lies in being genuinely heard and valued for their innovations and leadership capabilities. In stark contrast, their male counterparts often raise astronomical sums of VC funding based on the merit of an "idea," without the stringent requirement of presenting comprehensive metrics and projections that are frequently demanded of women-led ventures. This discrepancy not only highlights the uneven playing field but also raises questions about the criteria used to evaluate the potential of tech startups.

The issue extends beyond mere numbers and touches on the perception of competency. A prevailing, albeit subconscious, belief among some VCs suggests that unless a founder has a direct sales background, their ability to lead and grow a tech company is somehow in question. This skepticism disproportionately affects women, further exacerbating the challenges they face in securing funding and support for their ventures.

Despite the increasing visibility of women in tech, thanks in part to media efforts, the reality remains that without male endorsement, women founders often struggle to gain the credibility and respect afforded to their male counterparts. This bias is not only disheartening but also counterproductive to the innovation and diversity that the tech industry desperately needs.

The Australian government, among others, has attempted to address this disparity through grants and initiatives aimed at supporting female founders. However, these efforts have fallen short, as women leading technology startups, particularly those without a male figurehead or operating outside niche areas like healthcare or app development, continue to face significant hurdles in gaining recognition and funding.

The call for change particularly after the State of Australian Startup Funding report, where only 4 percent of the $3.5 billion of funding in 2023 went to women founded businesses. That 4 per cent was across only a handful of deals, of which a male co-founder could be found in each. This is further supported by the fact that the median size of deals was $3 million for all-male-founded businesses, compared to just $700,000 for all female-founded businesses and $1 million for mixed-gender startups. 

To bridge this gap, it is imperative for women in influential positions, whether in VC firms, tech companies or government bodies, to actively support and advocate for women tech founders. We need to create more inclusive platforms that not only recognise but also celebrate the contributions of women in technology. Mentorship programs, funding initiatives and policy changes aimed at leveling the playing field are crucial steps towards achieving this goal.

The tech industry must foster a culture that values diversity and inclusivity, recognising that innovation thrives in an environment where different perspectives and experiences are welcomed. It is only by challenging the status quo and holding ourselves accountable for change that we can hope to dismantle the biases that have long hindered the progress of women in tech. We all have a part to play in creating change and as we celebrate International Women's Day, it's important that women and men hold their counterparts to a higher consciousness around women in technology and helping bridge this gap.