Female founders require stronger ecosystems

Companies with female founders account for only 15.5% of all startups in Europe and this is due to various factors. The  ones a new report by Startup Heatmap sheds light on are the level of awareness on female entrepreneurship, representation in tech hubs and accelerator programs.

There is no doubt that the number of female-founded startups worldwide has remained low, despite the never-ending discussions on how to address the disparities between male and female founders. With a mere 15.5% of all start-ups in Europe being led by women the major question remains: Why have the numbers remained low?

Startup Heatmap Europe, which has been mapping and analysing the development of startup ecosystems since 2015, has provided some answers in its newly published report ‘Women Entrepreneurs’. The study analysed European ecosystems based on three distinct datasets to capture information on three main aspects: 1) the level of awareness about female entrepreneurship over time, 2) representation of female founders in Europe´s tech hubs, and 3) women in accelerators and their company’s early trajectory. The report refers to female (women) founders/entrepreneurs to anyone who has actively contributed to the establishment of a startup regardless of their position in that company. The third aspect looks at startups with a female CEO.

More awareness, support and funding is required
According to the study, creating awareness about female entrepreneurial activities of female founders can be achieved through various means. On top of the list are conferences and their role in dissemination information via social media and other channels. Meetups geared towards connecting the tech community and role models are crucial. In the wake of COVID19 however, the level of awareness has declined since many events had to be cancelled or postponed.

Zurich with a high number of events and a low number of female founders

A matrix illustrates the percentage of female-focused events to the percentage of female founders in some of Europe’s top tech hubs. Accordingly, Zurich has more meetups but less female founders and this is an indication of the potential to increase its female founder base. Pertaining to the representation of female founders in Europe´s tech hubs, the study found that even the largest ecosystems have failed surpassed the 20% mark of represented women in their hubs. Zurich counts among this category with only 15% female in its tech hubs.

In the same context, the study highlights the role of accelerators for promoting female entrepreneurship. It found that women tend to join such programs later than their male counterparts do due to the unfavourable eligibility requirement for high-performance potential. Although accessing support through accelerators is easy, the study discovered that female CEOs participating in Europe´s top 200 accelerators in 2020 is the same as in 2015. Moreover, although 75% of supported female CEOs receive funding after the program, the medium amount collected is 38% less than that of their male counterparts. However this can change as some countries show. In ecosystems such as in Finland, Ireland, Hungary and Denmark, female-led startups raise significantly higher amounts than male-led startups.

The detailed report is available at Startup Heatmap website.