Shivalee Duara

ABSTRACT

The article talks about the gender gap that exists in the field of entrepreneurship even today. This discrimination is evident in various forms. It ranges from the mindset, societal norms, limitations, and investment gap. India is home to more than 8,000 start-ups founded by women; however, 6,000 of these start-ups remain unfinanced. The investment gap is primarily due to gender bias that is prevalent in society. Women face various challenges such as the ‘motherhood penalty’, harassment in the workplace and also lack of confidence. This article focuses on how the above factors have heightened the funding gap and also talks about potential policy recommendations that can help bridge this gap.

INTRODUCTION

As each day progresses, the concept of gender equality seems to be discussed more but translated less into action. It is only on paper that breaking the glass ceiling feels unnecessary. Reality is much more shattering. Only 18% of start-ups in India are women-led. This statistic alone is enough to indicate how big the disparity is. Women today still face gender bias daily, especially in fields like business which are significantly male dominated. It is still believed that women do not have great business acumen as compared to men. Even their leadership skills are judged because they are considered ‘emotional’, which is an interesting point to be noted as EQ and IQ go hand in hand. But this restraint is not just limited to this, it extends much deeper.

INVESTMENT GAP

India ranks 57 out of 65 on the MasterCard Index of Women Entrepreneurs, which testifies how women in business are progressing globally, and only one in five of the country’s businesses are led by women, according to Government data. This data is not surprising if we bring our focus to thestatus of funding for female entrepreneurs in this country as well as globally. Women-led businesses face an unmet credit gap of more than $11.4 billion and female entrepreneurs received only 5.2% of the outstanding credit granted to enterprises by Indian public sector banks, according to the International Finance Corporation (IFC). Just 0.3% of India’s venture capital funding went to women-led start-ups in the year 2021. This negative bias is manifested in the way female entrepreneurs are treated.

BIOLOGICAL BIAS

Women also face the burden of the ‘motherhood penalty’ which discriminates against them based on the fact that they chose to be mothers. It is a societal bias which leads people to believe that the only person responsible for a child’s growth is the mother because it is her career that is affected. It often causes investors to not invest in women’s ideas or take them seriously.

An interesting point to observe is that start-ups are not always funded by an investor, a lot of the time they are self-financed or supported by family members. The gender pay gap still exists today; women earn 16% less than men on average. Also, most women are employed in entry-level low-paying jobs. The global average for the number of women in CEO/MD positions is 24% in mid-market companies, in such a scenario self-financing becomes an issue.

Another serious concern is the fact that most of the start-ups are funded by family members or relatives but when women are the ones taking charge of these startups, families do exhibit discouraging attitudes at times. In a survey conducted by Bain & Company and Google, 43% of women disclosed that their families and spouses did not support their businesses. This further exacerbates the investment gap.

BREAKING THE CEILING

The studies have shown that it is not just the investment gap that is retarding women from thriving in the field of entrepreneurship but it is also the overall mental toll that women face due to societal norms. When it comes to education, the fields are still very separated by gender. Women are inclined mostly towards subjects like Political Science, Sociology, Design and Liberal Arts. A big reason behind this is that women have been internalised to believe that they are not smart enough to dominate STEM, Economics and Finance. Another factor is that women often do not visualise themselves in leadership roles. Today only 15% of CEOs in Fortune 500 companies are women.

The conducive environment is the foremost requirement for women to feel comfortable to work. There has been a 20% increase in the total number of harassment complaints received by Nifty 50 companies in FY22. Moreover, women also face harassment during transportation. At the same time working late night shifts can lead their security to be compromised.

CONCLUSION

As discussed in the article above women today still face a lot of discrimination when it comes to entrepreneurship, their abilities are continuously questioned. But even after these hurdles, they have continued paving the way for future generations to come. However, that simply is not enough. Proper Governmental intervention is necessary for making sure that women’s voices are heard. There should be a proper board that is specially set up for women entrepreneurs where they can report any discrimination or harassment they have faced or might face. Also, women who are mothers or expecting mothers should not be undervalued. Funding should be arranged or provided by the government to women in rural areas and those who come from economically weaker sections.

Moreover, start-up incubation centres can be started to focus on women-led start-ups. Women should be taught relevant skills and also about the art of pitching to investors. Another important measure is campaigning from an early age which can be done with the help of education. Students can be asked to take up a course on entrepreneurship where they also take up discussions on gender disparity.

References

How can India’s women-led startups beat gender funding gap? (2023). https://economictimes.indiatimes.com/tech/startups/in-depth-how-can-indias-women-led-startups-beat-gender-funding-gap/articleshow/101324261.cms

Jain, A. (2023, July 7). How women-led Startups Bridge the gender funding gap in India?. mint. https://www.livemint.com/companies/start-ups/women-entrepreneurship-in-india-how-women-led-startups-bridge-the-gender-funding-gap-11688612404028.html

Leitch, C., Welter, F., & Henry, C. (2018). Women entrepreneurs’ financing revisited: taking stock and looking forward: New perspectives on women entrepreneurs and finance. Venture Capital, 20(2), 103-114.

Author:

Shivalee Duara

[email protected]

Research associate, GAEE India

Editors:

Riya Kumari Shah

[email protected]

Secretary, GAEE India

Kavya Suri

[email protected]

Associate Editor, GAEE India