On the eve of Women’s Day, a post by angel investor and business strategist Jermina Menon on LinkedIn garnered some attention. In the post, she described how Vineeta Singh, founder of the ₹420 crore brand Sugar Cosmetics, reportedly faced challenges securing investment for her company because of her gender.
As per data from Tracxn, only 6.97% of Venture Capital-funded money went to Indian start-ups with female founders in 2023. In Karnataka, the figure was lower – 3.11%. Data also shows that the percentage of women-led start-ups in Karnataka stands at a mere 9.66%.
The good news, however, is the emergence of more women-focused funds, women-headed incubators, and an increased sense of sisterhood perpetuated through communities of women entrepreneurs.
Smaller cheques, larger effort
Shreya Krishnan, MD - India at AnitaB.org, an NGO that supports women in tech, notes that women founders often have to put in more energy and effort to get funded than their male counterparts. This makes scaling up a difficult process.
“There is also a class divide. Most of our women who lead unicorns come from classes where family friends and fraternity would pool in and support them. But for women from mid or lower-income backgrounds, the barriers are high,” she points out.
Tanul Mishra, founder and CEO of Bengaluru-based fintech incubator Afthonia Lab, believes that the change in the Indian start-up ecosystem has been faster and better when compared to global numbers. Nevertheless, she feels two areas need to see more momentum. Women founders see more cheques being written for them in the early stages of their start-ups. Towards later stages it gets difficult, Ms. Mishra says.
“The other is that checks are being cut for women entrepreneurs in certain segments…When you look at more tech-heavy domains like fintech or space tech the number of women founders is lesser and the number of investments that go to them even lesser than what you would see in other segments,” she says.
Several women who are part of the ecosystem feel that a good number of investors consider women entrepreneurs not as driven as men and fear familial responsibilities would overtake start-up ambitions at some point. It’s not uncommon that women who try to raise funds for their venture are asked to ‘get a man on board,’ they say.
Alternative options
According to Susmita Ghosh, AVP- Women Entrepreneurship and Head - Funding Desk at NSRCEL, not just Venture Capital (VC) money, but other external financing options are also not easy to come by for women founders.
“VC is one of the options. VCs have their own theses and sometimes if the business fits it, they are ready to go through with the funding irrespective of gender.But I think banks and others have much more apprehension about giving loans to a new female founder.”
She also notes that of the 70 Central schemes and 433 State schemes for entrepreneurs, only 7% focus on women beneficiaries. “There is no way to find out which schemes are these unless you browse through different Ministry websites and dig them out. Access to relevant information is very important.”
Silver linings
Despite the odds, women in the ecosystem swear it’s not all doom and gloom anymore. Jayanti Bhattacharya, cofounder of Bengaluru-based India Hemp and Co, feels that things are slowly changing and points to several initiatives including NSRCEL’s networks that reach out to rural women entrepreneurs, CSR initiatives that support and mentor women and VCs with a dedicated focus on women entrepreneurs. More women are also participating on the ‘other side of the deal table’ as investors and incubation heads.
“A lot of women-led networking groups have come up, and they are doing a phenomenal job of supporting each other. Men have always had bro clubs. Now women are doing it on our own time. We might not meet for drinks on a Saturday night. We might meet at 10 or 11 in the morning for coffee, but it’s efficient. It’s fast. These networks empower women and create a safe space to ask questions, to not be shut down, to not be ridiculed.”
Interest among female students to join entrepreneurship courses also seems to be on the rise. Five years back when CMS-Jain (deemed-to-be-university) started the BBA - Entrepreneurship (WoW) programme, of the 21 students who enrolled, only three were women. The current batch has 11 women out of 40.
“It is largely because there is a culture building up back in schools for ideation. Families are also today encouraging girls to turn into entrepreneurs,” says Anila Bajpai, who heads the programme.
Noting that within the programme female students are the rank holders and the first to register their companies, Ms. Bajpai believes that, in the start-up city where terms like Shark Tank and unicorns are glamorous, the entrepreneurship bug is catching on to everyone irrespective of gender.
