Tzvete Doncheva‘s work in the startup scene as a leader, mentor and advisor for The Entrepreneur’s Network has made her well aware of gender inequality in tech and venture capital. Speaking from her own experience navigating male-dominated fields, she discusses how good leadership allows for better diversity and inclusion.
How have you navigated being in male-dominated industries like venture capital and entrepreneurship?
Throughout my experience working for a PropTech startup, at a corporate-owned urban mobility co-creation facility, and a PropTech venture capital firm – female underrepresentation has been apparent. Тhe UK tech sector is still increasingly dominated by men by around 81% – PropTech and Mobility even more so. It is paramount for these industries to be inclusive for the women who already work there. On a micro level, it stems from good leadership – good managers can create a culture of trust, integrity and inclusion.
I am still learning how to best navigate both industries. But, thankfully, I have worked with, and been around great leaders, some of which have turned into mentors. Good leadership, role models, support networks and internal resilience are all important pieces of the puzzle.
Surround yourself with people you look up to. Devika Wood, Amali De Alwis, Iglika Ghouse and Vanessa Vallely have inspired me and are changing the tech industry for the better. In my previous role, Samantha Rush set a great example not only as a woman in a male-dominated real estate sector but as a leader.
Being confident is important too and relates to my point about mentors – who often recognise our abilities/successes before we do. Self-doubt is an obstacle to career progression and is something women struggle with more than men, attributing achievements to chance. To combat gender biases and superficial stereotypes, we as women need to develop an awareness of our capabilities because “if you are in the room, you deserve to be there”.
How have you used your platform to help improve gender equality in entrepreneurship?
Society influences entrepreneurial culture – there are still a lot of social perceptions that exist even in the most economically developed countries. For example, 65% of young women in the UK could not name an entrepreneurial role model. It is important to display good leadership and to raise awareness of the benefits of entrepreneurship in the younger generation, which is what I’ve tried to do as an Alumni Volunteer at Queen Mary University London.
I also mentor female founders and have been involved with activities, helping to highlight the achievements of female entrepreneurs, their contribution to the UK’s economy, while at the same time understanding the challenges they face as female business owners.
On a smaller scale, I try to highlight women who are setting an example of good leadership with their work through my Ecosystem project, which features a series of webinars that bring together key players of Europe’s innovation ecosystem. You cannot be who you can’t see – there should be more visible female role models at all levels.
Why is improving diversity and inclusion in VC so important?
Venture capital is an important engine of economic growth – investment fuels both innovation and job creation. Across industries, the economic benefits of diversity are hard to ignore, as statistics show gender-diverse firms outperform their competitors by 15%. The case for funding female founders is also clear, as female-led startups have proven to outperform male-led businesses and exit a year faster than the broader market.
Although there is progress, the systemic issue of female underrepresentation in the VC industry remains – whether in pipelines, investments or at a fund level. It is a cycle – female investors are twice as likely to back women. The less diverse a VC team is, the higher the likelihood of tapping into similar networks or third party introductions.
Diversity of experiences, background and education are essential, as innovation doesn’t take place in silos, and a variety of viewpoints are needed to get a well-rounded view. Real change can take place only through a combination of a top-down/ground-up approach. Good leadership is indeed a crucial factor – hiring diverse talent, developing an inclusive culture and inspiring others to make a positive difference. In the VC space, some of the leaders I look up to are Jean-Marc Patouillaud of Partech, Manu Gupta of Lakestar, Anya Navidski of Voulez Capital and Sonali De Rycker of Accel.
What does the Future Fund Loan mean for diverse founders and female-founded startups – is there a danger they may be excluded from the scheme?
The Future Fund is definitely a positive step by HM Treasury to help UK startups and scale-ups go through this challenging time.
The structure of the funds may deepen existing inequalities in the tech sector. Firstly by favouring companies that have already raised VC funding and are more likely to secure follow-on rounds and secondly, by potentially excluding angel investors. Diverse founders are less likely to have raised the £250K threshold and are also at a disadvantage when it comes to ‘warm intros’ to VC investors – an extension of the ‘pipeline’ problem. This is why the prior investment requirement and the need for match funding within such a short time can exclude female, and BAME entrepreneurs as Yvonne Bajela, founding member and principal at Impact X Capital has highlighted.
The Future Fund scheme aims to protect innovation in the UK, and it is good to see this new form of support. What should be ensured is that it represents diverse ways of thinking, experiences and is inclusive.
Nevertheless, The Future Fund has become a signatory of the Government’s Investing in Women Code, “a commitment by financial services firms to improving female entrepreneurs’ access to tools, resources and finance” and thus supporting the advancement of female-led businesses in the UK.
In light of the coronavirus epidemic, why is it essential now more than ever to fund female innovations?
An economic downturn coupled with uncertainty makes investors a lot more risk-averse, startups are high risk/return investments even in good times. We have seen VC deals with all-female founding teams drop to 4.3% for Q1 2020 (7.1% in Q1 2019). As reported by the UN, the pandemic could reverse the limited progress made on gender equality and women’s rights across sectors – the tech industry doesn’t make an exception.
The shift in the external environment leads to the discovery of previously unrecognised market gaps and gives an extra sense of urgency to address already existing challenges. I’ll use the example of health tech – for obvious reasons, it is a high-priority sector. Of the global healthcare workforce, 70% of them are female, and their domain expertise can help spur innovation. Nevertheless, less than 10% of health tech startups are founded by women. It is dangerous not to have women involved in solving the world’s healthcare challenges – at a founder and a funder level. A two-fold risk: one it may lead to the creation of gender-biased products and two, innovations that could be life-saving may never come to light.
We live in unprecedented times – now more than ever, we need to hear from diverse entrepreneurs who may see the world from a different lens.