Five myths about female entrepreneurs

When it comes to women and entrepreneurship, there are still many obstacles facing female entrepreneurs in 2021. Women start about 1/3 of all companies in Sweden but still receive only 1% of the venture capital, while companies founded by men receive about 90 times as much. The reasons that stand out for why it looks the way it does are many, but often the explanatory models are about different prejudices about women's entrepreneurship and perceptions that the problem lies with the women themselves.

The problem with these explanatory models is that the responsibility for driving change is placed on the women themselves, while the others who in effect can contribute to change are encouraged not to do anything. Below we highlight some of the explanatory models that usually occur in the startup world as to why women do not start more companies or get more resources to realize their innovations and why these explanatory models are obstacles to an equal innovation system.

Myth no 1: "Women have low self-confidence and need to believe more in themselves"

This explanatory model is based on a widespread notion that women have lower self-confidence than men and therefore lack the driving forces required to build successful companies. Only when women believe more in themselves and "dare" to start companies will change take place.

However, women already start close to 1/3 of Sweden's companies. That all these women would have low self-confidence falls on its own unreasonableness because it takes a particularly high self-confidence to start a business when the conditions for obtaining financing are so poor. Rather, one should ask oneself why so few men start companies when the men who start companies are 90 times as likely to get the financial resources they need to make their company grow compared to their female peers.

Read more about women and self-confidence here.

Myth no 2: "Women choose not to start growth companies"

One argument that is often raised by venture capitalists is that women generally do not start growth companies. There are a number of different views on what a growth company actually is, but what is usually meant is a company that increases its turnover year after year. I.e. you sell more and more and get more and more customers. There are no statistics on growth in the companies that are founded specifically by women, but if there is anything in the claim that women's companies rarely become growth companies, it is a gross simplification that the smaller growth is women's own choice. The ones who have the greatest impact on a company's sales are the customers.

There is hardly any entrepreneur who would like to have fewer customers or sales than more customers or sales if you are given a choice. For some reason, however, many people think that it is a reasonable explanation for women to opt out of sales rather than to ask whether it could be that customers opt out of the companies that women found. In recent years, awareness has increased about the so-called financing gap. There is no reason to believe that there would not be a corresponding "purchasing gap".

Myth no 3: "Women take to little risk"

There is nothing to suggest that women in particular would be less likely to take risks. However, it may be that many women are more likely to take considered than unconsidered risks. If you know that the probability is small to be able to raise capital if needed (women have about 90 times as little chance of getting external funding as their male peers) then it becomes a factor to include in the risk assessment. In all risk management, it is a matter of assessing the probability that a risk will occur, also in relation to the consequences it will have if the risk is realized. If the risk is realized for a female founder, the risk is greater that the risk will have greater undesirable consequences as it may be more difficult to mitigate the risk.

A woman cannot expect to receive new financing if she would need to reduce the consequences of a realized risk - from a financing point of view, it is often perceived as a greater risk to invest in a female founder than a male from the beginning (otherwise, women would receive the same proportion of financing as their male pears). When risks have already been realized with undesirable consequences, the conclusion would likely be drawn that the woman can not run a business. Female founders can also not expect new customers to flock because there is also a purchasing gap. As long as these differences in conditions persist, women's risk calculations should, rightly so, differ from most male founders.

Myth no 4: "Women do not think sufficiently big"

One thing that women sometimes hear is that they do not think "big" enough. It may be so, but it is also about the need to be aware of the conditions you have. In the first startup I co-founded, we thought extremely "big". But we were also quickly slammed into our shoes when we had nothing to show to prove that there was a market out there that would support us and generate growth. I am still convinced today that there was a market and that with the right conditions it could have been really big. Nowadays I still think big but at the same time I am more aware about the obstacles of reaching that size. As long as the prejudices about women's ability and entrepreneurship survive without us dismantling them, the opportunities will remain minimal.

Myth no 5: "Women need more role models"

This prejudice is one of the more intricate. We can all experience that role models are something positive. But when we highlight this as a problem for women who start companies, we say something else as well. That many of the women who start companies do not have "what it takes" and are in need of another more successful woman to look up to in order to get ahead. At the same time, the startup world strives to highlight "successful" examples that other women should look up to according to the principle - "if she can do it, I can too".

If there are structures with many obstacles that limit women's opportunities to become successful entrepreneurs, perceptions as these become very problematic. You paint a picture for the women who encounter obstacles without being able to get past them that their problem is that they do not have role models - not that the external obstacles themselves are the problem. At the same time, a road is created for a few female entrepreneurs who compete for the coveted place to prove to everyone else that they can get through DESPITE all obstacles. It can feel flattering for the few exceptions and female entrepreneurs are encouraged to adopt this approach.