Tech Transfer eNews Blog

Study examines why female-led start-ups attract less funding


By Jesse Schwartz
Published: January 15th, 2020

A new study from Oxford Brookes University shows that women entrepreneurs make up only a small fraction of start-up founders based on university research.

Funded by the UK’s Engineering and Physical Sciences Research Council (EPSRC), the study examines the barriers to the participation of female researchers in university spinouts. It also found that women in executive positions were more likely to work in smaller start-ups, and that the more female founders a start-up had, the less funding it tended to receive.

Simonetta Manfredi, head author of the study, says the findings are significant, as university start-ups are becoming increasingly important due to government incentives to demonstrate the real-world impact of university research.

Other studies in fact show that there are real benefits to encouraging diversity in tech start-ups. According to research conducted in 2017 by McKinsey & Co., companies with the greatest gender diversity on their executive teams were 21% more likely to outperform peers on profitability and 27% more likely to create superior value.

As for the reasons behind the lack of diversity, Robin Mellors-Bourne, co-author of the Oxford study, says one problem is that so few women study physics or engineering, reducing the pool of potential founders. Manfredi points to the male-dominated culture in science, as well as the lack of female entrepreneur role models.

The study also looks into why female-led start-ups tend to attract less funding. Olivia Champion, founder of the successful start-up BioSystems Technology, suggests that women tend to ask for less, possibly a reflection of the attitudes of male investors who don’t take female-led companies as seriously.

Champion recalls being conscious of pitching for significantly less money than her male counterparts. “I stripped it all back to think, ‘What’s the absolute least I could ask for?’” she says. “The guys all ask for loads of money and get it.”

The next stage of the study is slated for release in April and will examine whether men and women have different characteristics that may affect their involvement in start-ups, such as variances in self-confidence or willingness to take risks.

Source: The Guardian

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