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Andrea Böhmert, a partner at venture capital investment firm Knife Capital, believes women should be making better use of their networks to raise funding.
“About 90% of funding is initiated via introductions from personal networks. A Savca study confirms this. So the question is, whether women are as networked as men and are they accessing the ‘right’ networks when it comes to funding.
Böhmert questioned where the equivalent of the old boys club for women is.
“Where are the well-networked women who could potentially make introductions? In my opinion, this is the first major hurdle that women have to deal with but the good news is that it can be done. Many women might just not be aware of it,” she told Ventureburn.
While a US study released last month revealed that women-led startups received less venture capital funding in the US then those led by men, Böhmert pointed to a fund Knife Capital ran a few years ago – where only eight of the 1000 applications submitted were from female founders.
“I have a feeling that this ratio has changed for the better. However, requests for funding from women-led companies are still at a low percentage,” she said.
She added that while the number of female entrepreneurs is on the increase, a majority of enterprises run by women are in the services sector.
“Some of these businesses are very successful. But there is a significant difference between a good business and a good investment. This difference has mostly to do with the scalability of the business and the potential for the investor to exit, generating an attractive internal rate of return .
“This difference between a good business and a good investment, particularly at the early stages of the business is often the reason for financial investors such as VC funds to decline opportunities.
“Strategic investors look at this differently and I am confident that you will see a much higher success rate for women in tech securing funding from them (strategic investors),” she said.
Is the general funding ecosystem doing enough to educate entrepreneurs and particularly women-led tech startups of funding opportunities?
Böhmert said Knife Capital was interested in diversity and that the company provided information and support to interested entrepreneurs.
“We consider ourselves as ecosystem activists and would love to see more women, starting tech and innovation-led businesses,” she said.
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