"We need to address all of the constraints that are impacting the growth of women-owned start-ups," said Julie Sinnamon, CEO of Enterprise Ireland, the agency responsible for the growth of Irish businesses and international trade. "In 2012, only 7% of the startups we were dealing with were female-led. We decided to try to understand some of the issues that might be impacting this.”
According to research by the Global Entrepreneurship Monitor, women in the United States are 18% less likely than men to perceive they have the capability to start a business. Sinnamon is working to address this confidence gap and boost the number of women owned businesses.
“In trying to increase the number of female-owned high potential startups, we basically boiled it down to three key things: access to finance, confidence, and a lack of role models or access to networks,” said Sinnamon.
By tackling each of these three key issues Sinnamon says Enterprise Ireland has been able to increase the proportion of female owned start ups in its portfolio from 7% to 22%. In this interview Sinnamon shares three solutions for increasing the number of women entrepreneurs globally and why this is the key to unlocking business innovation.
Michelle King: What are your solutions for tackling the barriers women entrepreneurs face?
Julie Sinnamon: Globally, fewer than 2% of female entrepreneurs are starting technology companies, so this isn’t a country specific problem. We started working on each of the three barriers by putting together a female-only fund to support women by providing access to funding. Then we established networks of successful female entrepreneurs to support new female entrepreneurs. We have also put a big focus on role models. By addressing each of these issues we managed to get traction.
King: What are the different challenges do women entrepreneurs face in terms of access to finance?
Sinnamon: Access to finance is one of the critical components in growing female entrepreneurship. You know, across the globe 90% of funds are managed by men. When you look at seed and venture capital funds, which are critical to start ups, the people making the decisions about funding correlates with the gender of people getting the funding. Because of this, it’s vital that we grow the number of female fund managers on the venture capital side. This may sound soft, but funding available to women is determined by the gender of the people involved.
King: Why do you think the visibility of women entrepreneurs is so important?
Sinnamon: I often tell people that, ‘If you can’t see it, you can’t be it.’ Research shows that women are much more impacted by role models than men. So, the fact that we actually have insufficient female role models that are entrepreneurs has further exaggerated the issue. We have put a lot of effort into profiling these women and getting them to speak up and encourage the next generation of entrepreneurs. We want millennial women coming along to see entrepreneurship as a real option.
King: Why is confidence a critical issue, especially for women entrepreneurs?
Sinnamon: A lot of women also carry family responsibilities in addition to business responsibilities. Talking about this and how we balance or don’t balance this is important. We need to normalize it so that women don’t continually feel this guilt. These are issues that we all struggle with. It is only by having conversations with other women that you realize that it is possible. A key issue is confidence, which is impacted by access to role models. We are trying to build women entrepreneur networks, and give them access to mentors so they can see the path other successful women entrepreneurs have taken.
King: What is the impact of this ‘lack of confidence’ on business success?
Sinnamon: It affects their attitude toward risk. Women have a lower risk tolerance than men, so we’re helping to build their confidence so that they are willing to take more risks. This is something women need to do (to take more risks) if they want to scale their business.
King: What can the industry do to better support women entrepreneurs?
Sinnamon: Diversity goes hand in hand with innovation. When you look at studies and what actually helps drive innovation diversity is key. It is not just gender diversity, but it is wider diversity. For too long people have been focused on recruiting similar types of people or supporting similar thinking. There is a growing recognition of the importance of diversity across all aspects of business. We tell our female entrepreneurs to make sure that their boardrooms are different as well. Make sure that their boardrooms are not just women talking to each other. Diversity works in all directions.
King: Based on your work with women entrepreneurs, what is the one piece of advice you would give?
Sinnamon: Take more risks. One of the things I have seen from a lot of the female entrepreneurs I work with is that they will always overachieve in the long term, but they set the bar too low initially. If they aimed higher they would achieve even more. Have the confidence to push the boundaries on the risk side - as this will drive your business growth.
