Female Founders: Addressing the Gender Disparity in Founder Representation

The numbers are frightening: only 38% of all business start-ups in Germany were made by women in 2020, and only 16% of start-ups. These values have hardly increased in recent years. Why are there so few female founders? We get to the bottom of that in this article, along with the experience of the founder of OH MY! FANTASY, Annika Breu.

Why are there more start-ups than start-ups by women?

Both starting a business and founding a start-up lead to self-employment. However, while start-ups envisage little growth of the company, start-ups have more innovation potential and larger growth plans, both in terms of sales and staff. An important difference is already becoming apparent here: men seem to have bigger plans for their new ventures than women.

Annika: It's probably because women often underestimate themselves and their projects. They also tend to take fewer risks. It takes a lot of guts to start a business, and with that comes a lot of uncertainty.

What keeps women from being self-employed?

First, there is the infamous question of family planning and child care. It is still women who are more involved in the family and take on most of the childcare. In addition, the average age for starting a business often overlaps with the age when you want to have children. This quickly leads to a double burden, which can discourage women from starting a business.

In addition, women are much less frequently supported by investors, which is partly due to the fact that there are many more investors than women. This is noticeable in the funding, because business ideas where investors are part of the target group are more likely to be funded. So many concepts of women are lost. In addition, female founders often lack the necessary networks for financial support. They often lack useful contacts to finance their plans. Men are much better positioned in this area and accordingly more investments are made in their plans. 

Annika: The financing of a new company in particular can be very demanding. There are too few women in the field of investments, you can tell by which plans are funded and which are not. There is always a tendency to invest in the people who are similar to you. In addition, women often ask for less money than men, which is where the lack of courage comes to the fore again. In addition, women still do most of the childcare and household chores. Often they simply don't have the time to take care of a company.

Do female founders have to change in order to be successful? 

Many other possible reasons emerge that could explain the difference between start-ups by women and men: women are less willing to take risks than men, are more perfectionistic and also ask for less funding. Even if female founders today have to adapt to their male competitors to a certain extent in order to achieve success, the successful founding of companies by women means one thing above all: new, much-needed role models for all those who still want to follow them.

Annika: As such, women should be able to thrive their way and start their businesses their way. But it will still take some time before this reaches the general public. After all, it starts with upbringing: boys should be brave and strong, girls should take care of others and respond to their feelings. These experiences have a lasting impact on our society. I think that until society changes, there is no harm in promoting girls and women in certain areas so that there will be more female founders. Then there are more role models for new generations.

But there is also some good news for female founders!

In some sectors, however, there are already more start-ups by women than by men, e.g. in the health and lifestyle sectors. It is striking that these are the same occupational fields in which more women generally work. Another point where female founders are ahead is the pursuit of higher goals. Women rarely measure their success in terms of economic gains; sustainability or solving social problems often have priority for them.

Annika: It is striking that there are many female founders in areas where women and more are represented. However, where there is still a need to catch up is IT. There are most start-ups here, but almost none by women. Because it's such a promising field, women really need to be empowered here; preferably in school.

What needs to change so that more women start businesses?

There are many places to start, because there are many reasons for the small number of female founders. One point that should be promoted more are daycare and crèche places, because this relieves mothers of a lot of work. The professional fields in which few women start their own business today should be promoted in a targeted manner during school education. The same applies to all professions that are relevant to start-ups, especially in the investment sector. Ultimately, however, a rethinking of society as a whole seems necessary so that women can more easily realize their entrepreneurial dreams.