She’s The Business - HSBC study reveals women entrepreneurs face gender bias when seeking funding

A study by HSBC Private Banking has revealed that more than a third of female entrepreneurs experienced gender bias while pitching to investors. Also reveals that women receive on average 5 percent less funding than male counterparts when seeking capital funding. 

The study that surveyed 1200 female and male entrepreneurs in eight different markets, focusing on those who have raised at least £100,000 worth of funding (or are currently trying to do so).

Some female entrepreneurs faced intrusive questions about their family, marital status and children, asking them how they would manage work and family life,  questioning their commitment to their business or suggested they represented a greater risk of loss to investors.

According to funding figures, the UK appears to be the worst place for female entrepreneurs to seek funding. Upto 54 per cent of women raising money in the UK said they had experienced gender bias, eight points ahead of the next worst country, the US. By contrast, in China only 17 per cent of female entrepreneurs said they had run into such bias.

The study titled ‘She’s the Business’, details reasons for the gap in funding between men and women entrepreneurs. An important reason is the lack of female mentors for women entrepreneurs who are starting out. It is also harder for women to build contacts and navigate the start up business without mentors who can understand them. Many private equity and ‘angel’ investors funding start ups are men who cannot fully comprehend the female perspective because of the lack of shared experience and common ground. 

Women entrepreneurs have brought forth the changes and solutions that can reduce the gender imbalance. Expansion in business networks for women will help them to build contacts and network better to navigate the funding game better. The entrepreneurs are calling for more visible female role models. There is need for platforms to highlight women entrepreneurs and celebrate their achievement. Such efforts will inspire more women to enter entrepreneurship.

The gender imbalance can reduce when more women build their wealth and invest themselves in women led businesses. 

Entrepreneurs are asking investors to take action by making pitching process more transparent, including atleast one women in every panel, providing clear criteria for pitches and comprehensive feedback after the pitches also. 

Initiatives like AllBright Club and WealthiHer Network are examples of initiatives that champion the role of women in investing and help women entrepreneurs build networks to seek better funding opportunities. 

The study was commissioned by HSBC Private Banking and the research was conducted by Kantar and Savanta between June and July 2019. It included entrepreneurs from mainland China, France, Hong Kong, Saudi Arabia, Singapore, the United Arab Emirates, the UK and the US.

(Edited by Rekha Balakrishnan)

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