ELIAN D. ALVAREZ

- VENTURE CAPITAL - ANGEL INVESTMENT -
- ENTREPRENEURSHIP - LATAM - INNOVATION -
- INVESTMENTS - PRIVATE EQUITY - FINANCE -

Women Still Struggling in the World of Technology and Innovation

Apr
13

Although, it seems as if things are moving in a positive direction for female entrepreneurs, there is yet a lot to be done. Women have made accomplishment in every field, but they are still facing a number of challenges, especially when you talk about the increasing number of female startup owners and their ability to get funding.

David S. Ricketts, the senior innovation scholar at the Technology and Entrepreneurship Center at Harvard, said that this is the number one challenge they face when their businesses are experiencing growth.

 

Challenges Faced by Women Entrepreneurs in the IT Sector

Female owners of IT companies have to come across various obstacles when they try to raise capital from venture capital firms. This holds true in case of the Silicon Valley and tech hubs in Amsterdam, Berlin, London. Not only does it adversely affect the progress of women entrepreneurs, but it is also bad for the technology sector, because restraining their leadership and talent hampers the overall growth and impede innovation. Moreover, the gender gap is rapidly increasing around the world, with 90 percent of the venture capital going to male entrepreneurs and only 10 percent retained by female founders. In addition to that, only 10 percent of the strategic level positions in tech companies are occupied by women.

According to the report by the National Women’s Business Council, women invest half the amount of capital invested by men in the startup businesses. It was further mentioned in the report that firms with female founders usually get far less equity financing from venture capitalists and angel investors as compared to companies with male owners, i.e., 14.4 percent vs. 3.6 percent.

Furthermore, only 1.8 percent of the women ask their close family or friends to raise capital as opposed to 9.2 percent men.

 

Female Entrepreneurs in the European Market

A similar trend has been observed in the European market as well, wherein, the IT sector is on the boom, yet the percentage of women leaders is a lot less as compared to men and only a small percentage of venture capital is allocated to startups led by female entrepreneurs. The United Kingdom (UK) is the second biggest startup hub after Berlin. 86 percent of the startups in the UK that receive venture capital funds are owned by men. Whereas, the percentage of angel investment secured by men and women is 56 percent and 44 percent respectively. Unfortunately, even in the IT sector, the distribution of capital is not based on merit.

With such funding constraints, women owned startups in the UK only represent 15 percent of the entire sector. They either revert to self-funding or seek crowdfunding opportunities to survive in the long run.

 

Female Entrepreneurs Generate More Revenue than Male Founders

It is worth noting that female owner companies earn 12 percent more revenue as compared to companies run by men in the IT industry, and their return on investment is 35 percent higher than the firms owned by their male counterparts. If they are given appropriate support, not only do they give better performance, but also make exceptional achievements. This holds true for women living in any part of the world.

 

How Can Female Entrepreneurs Contribute to Better and Sound Economy?

According to one estimate, if women in the UK, who wants to have their own startup companies, get the right support, they can instantly generate more than 300,000 new businesses and create more than 400,000 employment opportunities. Moreover, female-led businesses can contribute to innovation and better quality products with great consumer satisfaction.

 

The U.S. Firms, such as Backstage Capital and Kapor Capital, and the UK firms like Albright are some of the prominent examples of women-led capital firms that have proven to be the game changers in the venture capital (VC) community. To let the innovative and productive ideas flowing in the IT market, VCs should open the doors to give female-led companies a head-start, because it is possible that the owner of the next big unicorn is a female entrepreneur.

Rise and Fall of the Venetian Empire

Feb
24

The Rise and Fall of the Venetian Empire should be a must-know Lesson for Innovators

In the fast paced world of technology, innovation is the name of the game. If entrepreneurs do not keep up with the innovative strategies, they would eventually end up losing their market share. A great example can be none other than the rise and fall of the Venetian Empire. To get a better idea of what happened, following is a brief background of the empire along with the lesson learned from it:

 

Background of the Venetian Republic

Every business would want to last for centuries just like the Venetian Empire did. Between 697 and 1797 AD, the empire flourished the most as a result of its ability to make good decisions in the field of technology along with its unconventional ways and geographic location. However, you should bear in mind that if one has to face a sudden change, it can cause the strengths to turn into weaknesses, leading to a fall of thousand years of success.

  • The Military Technology

Having a military technology and central position on the main trade routes gave the Venetian Republic a strong edge. The Arsenal, a naval military weapon factory that was considered a production line method of manufacture, was a core of the empire’s naval industry. It fostered creativity and encouraged entrepreneurship and innovation in building its galleys.

  • Central Geographical Location

The Venetian Republic’s location allowed it to protect itself from sea based as well as land based invaders. Its geography propelled it to develop a money lending and trading economy as there was a limited area that could support agricultural activities. Moreover, it was situated at the top of the Adriatic Sea, which enabled it to become an important trading hub, connecting both the west and east side through the Mediterranean.

  • Exploitation Over Exploration – A Beginning of the End

Like a number of successful organizations, Venice also hit the level where it started focusing on exploitation instead of exploration. Entrepreneurs decided to follow a traditional route, as established practices gained popularity as compared to exploration. Traders and merchants focused on incremental innovation through efficiency and optimal use of resources. Having a focus to quickly increase their fortune, they deviated away from mapping new directions.

 

According to Alessandro Barbero, a professor of medieval history at the University of Eastern Piedmont, galleys were favored by the city’s navigators for a very long time. But as seafaring galleons began to surface, it allowed countries, situated at the border of the Atlantic, to create new routes for trading. These routes were not flowing through the Adriatic Sea. Venice lost its competitive edge with the introduction of ships that could survive at sea for a longer period of time i.e., months and years. This was the age of exploration, and this is when the city began to fall. So, with the invasion of Napoleon, the Venetian empire officially collapsed.

 

Lesson Learned

One of the most important lessons learned from the fall of the city was that stronger you believe that the future will function as the present does, the greater the likelihood of a decline in the state of affairs. If a company does not explore new directions, it will not be able to survive for a very long time. Therefore, it is important to conform to the fact that future will not be the same as present. The future is always uncertain and opened to all sorts of options. A ground breaking move by a competitor or launch of innovative technology is all it takes to cause an empire to fall. Having a sound business with high walls and neat gardens is not enough, because you might come across opportunities or threats beyond those walls.

 

Innovators’ Approach to Success

Innovators and entrepreneurs avoid the concept of “success as usual”. They rather invest their time and money in new business models along with exploring latest technologies. They keep a bigger perspective in mind and are cautious of being too effective or efficient, which enables them to foster unconventional mindset, problem solving skill, and an art of challenging the status quo. An innovator will not go after a fixed horizon. Instead, his focus will be on how the horizon moves as they take a step in that direction.