Female IT startup founders disadvantaged — really? | Business| Economy and finance news from a German perspective | DW | 31.01.2018
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Female IT startup founders disadvantaged — really?

Women are not starting enough companies in the digital economy, although they are considered to be particularly innovative. A new study on Germany thinks it's a case of discrimination. DW's Insa Wrede debunks that myth.

When a study by the Vodafone Institute appeared on my desk,  I felt a slight discomfort coupled with fatigue. Yet another "women at a disadvantage" topic; this time about women starting a business — more specifically, women starting startups in the digital economy. The raw figures show that indeed women are setting up shop less than men in the digital economy.

Even consulting firm KPMG, which monitors German startups, confirms that relatively few women found startups — new companies with innovative ideas.

And although the proportion of female startup entrepreneurs has increased in Germany, it is still below 15 percent of the total. Yet if all the self-employed are counted, then the figure climbs to a 40-percent share for women. So it really does seem to be a problem in this particular field.

It is a strange thought that so few women are in the startup scene when such companies are considered to be very innovative and cosmopolitan. The authors of the Vodafone Institute study found several reasons for this.

For example, women are often at a disadvantage when searching for investors. After taking a look at the study, I started looking for women startup founders to hear their stories.

A sobering and happy sampling

First, I asked a friend who founded an IT company years ago. Ironically, she is in the defense industry, an extremely male-dominated field. But disadvantaged? As a woman? No, she said she had never felt disadvantaged. OK, admittedly she is not the type of woman you can easily overlook and discriminate against. But is she just an exception?

Miriam Wohlfarth (RatePAY)

Miriam Wohlfarth is the founder of RatePAY

I kept looking and talked to Miriam Wohlfarth who in 2009 founded RatePAY, a company that offers online payment solutions. So she's not only in the IT industry, but also in finance, which is also considered very male dominated.

Her reaction: "I have never felt disadvantaged." I am surprised, especially since the Vodafone Institute put me in contact with her.

Read also: Are women better investors?

Next try: Lea Lange, another startup founder, who since 2014 has run Junique, an online platform for affordable art. She has already made it onto Forbes' "30 under 30" list, which brings together 30 of the most successful "under 30-year-olds in Europe." And her experience? "I have never been in a situation in which I felt disadvantaged as a woman. On the contrary, we are a mixed team, which has always been very well received."

But where are they then, these disadvantaged women? According to the Vodafone Institute they must be somewhere. After all, 112 women IT industry founders were interviewed for the study.

No room for pecking hens

In Germany, it is still the case that those who pass out the money are often men. So anyone wanting funding for a startup has to impress the gentlemen behind the desk, although these men often reward boisterous, clucking roosters instead of quieter more industrious hens. 

"We've found that women behave very differently than men, for example, they dislike the showmanship, the exaggeration and the excessive self-confidence of many men," says Alice Deissner from the Vodafone Institute. Often women don't want to perform in that way. In short, women want to be judged by their merits and not by their performance.

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Nina Cejnar is the owner of a company that advises founders — men and women — and looks for investment opportunities in startup companies. In line with the findings of the study, she confirmed that women have more difficulties to raise money. And she thinks that's because women are more reserved and less brash than men.

"I see the startup scene as very results-oriented," says Lange, adding that success is not related to gender, but to performance.

The experiences of Wohlfarth seem to confirm this. After many years in business she advises aspiring founders to "prepare very, very well and know your industry."

Good ideas don't hurt either

Whether or not an entrepreneur succeeds in raising money depends not only on how they present themselves, but also what they present. It was striking that during my research, I mainly found founders who worked in the fashion, design, cooking or art worlds. If more women were investors, perhaps some different business models might be brought to the forefront.

However, many of the startups founded by women are often in the "world of beautiful things." Wohlfarth believes that could also be a reason why women are not taken so seriously as founders, and therefore often don't get the money they need.

In a sense, the creation of IT startups seems to be a man-woman issue. First, because men think differently and are impressed by other factors, and second, because in general men may not take women's projects seriously.

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"I think the most important thing … is that you can not allow yourself to be beaten," says Deissner from the Vodafone Institute. "I think it's more difficult, but you can not be awed and get blown off track," adding, "this is a message that I would like to convey to young women."

In the end, of course, it must be kept in mind that I did not speak with women who tried to found startups and did not succeed whatever the reasons may have been. But such women weren't considered for the study either.

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