…Venture Capitalists reveal major road blocks

By Juliet Umeh

Different reports, researches and experiences shared by many female-led startups have proven that investors feel safer when they invest on men-led startup than women startups.

For instance, the analysis by Disrupt Africa in terms of funding in 2022, Nigerian startups raised $142,828,000 ($142.8 million), and out of that lot, the female-led start-ups attracted just $24.1m.

Another report titled: Africa: The Big Deal, said in 2021, female founders received only 1.4 per cent while male founders received 87.5 per cent of the total funding that came into Nigeria, with the remaining 21 per cent going to gender-diverse teams.

Speaking to investors, they itemised a number of issues contributing to the factor.

Managing Partner at Nubia Capital, a venture capitalist that invests in tech companies and  technology, Mr. Davidson Oturu,  said: “It would surprise you to note that according to data provided by the World Bank and AfDB, 58 per cent of Micro, Small and Medium Enterprises, MSMEs are run by women and there is a $42bn funding gap for these women-led businesses.

“One of the reasons is access because men may have access to people who they have known or can be referred to, it is easier to get funding.

“Also, stereotypes come into play. Some men may just feel that a fellow man can deliver better with the funds than a woman, especially based on their own experiences.”

Oturu said it will take concerted efforts from various stakeholders, including governments; businesses, educational institutions and society, to reduce the gender gap and create a more inclusive and diverse tech ecosystem in Nigeria and across Africa.

Solution

According to him: “I set up a new fund, Nubia Capital, to address these sorts of issues, amongst others. My firm is an equal opportunity firm that treats all founders equally, regardless of their backgrounds. Curiously enough, from my position as an adviser, as well as a board member on some start-ups, I discovered that women that lead several start-ups tend to be very resilient and innovative. They therefore need a lot of support to scale. 

“To reduce this gender gap and promote gender equality in the African tech ecosystem, governments and industry stakeholders can implement policies that support gender diversity such as quotas for board representation and funding allocation specifically for female-led startups.

Incubators, accelerators and venture capital firms can establish programs to support and fund women entrepreneurs.

“Investors should be made aware of the biases that can influence their decisions and actively work to overcome them. Creating more inclusive investment networks, organising pitch events specifically for women-led startups and promoting data-driven decision-making can help address funding disparities.

“There should be awareness about the importance of gender equality and challenging gender stereotypes within society can help foster a more inclusive tech ecosystem. Media campaigns, conferences and events focused on promoting women’s participation and achievements in the tech sector can contribute to changing attitudes and perceptions.

“Partnerships between tech companies, industry associations and organisations that focus on gender equality can be encouraged. Joint initiatives can provide funding, resources and training to support women entrepreneurs.”

Also contributing, Head of a programme, pre-seed stage technology agnostic companies in Africa, Madica, Mr. Emmanuel Adegboye, part of what is affecting female-led start-ups is the traditional view of leadership as a male-dominated field.

Adegboye said: “One major issue is the lack of awareness and understanding among investors and funding organisations about the value and potential of women-led ventures. There is a need for more education and case studies aimed at providing evidence of the impact and successes of women-led startups.

“Also the lack of inclusivity in the decision-making processes of most VCs can be another reason for this. There is a need to increase the representation of women in investment decision-making roles to ensure diverse perspectives are considered, leading to better funding outcomes for women-led ventures.

“The support female founders require in navigating the complex investment landscape is also lacking. Women need access to training and resources on pitching, fundraising and financial management which is in short supply on the continent. At Madica, we prioritize equipping entrepreneurs, especially women, with the necessary skills and knowledge to enable them enter globally recognised accelerator programs and attract top-tier investors for their seed rounds. Our aim is to level the playing field and empower women with the tools they need to succeed.