According to Statista, only 20% of startups globally are founded by women. The entrepreneurial ecosystem continues to be a male-dominated space, the problem proliferating in the form of discrimination into other spheres of business from recruitment, promotions to a lack of pay equity and even investment.
According to Invest2Innovate’s 2023 year end report, women raised only 14.1% of VC funding in Pakistan, while businesses with mixed-gender founders raised just a little over 4%.
This disparity is partly informed by the fact that most venture capital firms themselves are led by men, leading to a natural bias, but also the fact that Pakistan’s socio-cultural context makes it harder for women to break into these all-male circles resulting in fewer opportunities.
Dr. Saira Siddique, founder of MedIQ, a digitally integrated hybrid healthcare platform that raised $1.8 million in seed funding, commented in a Daftarkhwan fireside chat, “I think most of the problems that I faced were social. You can develop your skills, capacities, and have great team members but one thing that I saw was that for many of the male founders [and investors], they usually hang out over dinner, over a smoke. I felt disadvantaged that still there is a bias because women can’t get along in that kind of social setting”
Aiman Bashir, co-founder of Out- Class, an Edtech platform that raised $500,000 in 2021, elaborated, “Networking goes a long way in any founder’s investment-raising journey, and I feel women lose out on many such networking opportunities as these tend to be male-dominated. I have been fortunate enough to have had the support of my co-founders, both male, and both strong feminists. Having them with me certainly helped open doors and get investor meetings.”
“The biggest obstacle is usually securing the actual meeting with an investor,” stated Aiman, “The more nuanced obstacles are in the form of intense scrutiny and harder questions that women face from investor committees.”
Dr. Saira shared an anecdotal example, “I thought ‘yeah I have an investment ready product so it’ll be easy, I’ll go out to the investors and they will start showering me with money’…soon I realized it’s not that easy, being a woman and then coming from a developing country where the ecosystem isn’t as developed, it’s not a level playing field at all. I pitched to 166 investors before my first cheque of $200,000 came in while for men it’s around 52 to 55 pitches, so I had to put in thrice as much effort.”
While extremely gradual, the investing landscape is shifting to be more inclusive. SehatKahani, an all female led startup raised $2.7 million in Series A funding, a previously unheard of feat.
When asked what she thought could help improve the visibility of female founders and their chances of raising investment, Aiman replied, “Influential stakeholders in the ecosystem such as accelerators, VCs, and coworking spaces can make the most difference by creating space in the form of more social networking events, investor-startup speed dating events, introducing more grants for women-centric startups and highlighting their wins.” Dr. Saira was of the opinion that there should also be more regimented training for raising funding in rounds that surpass just the early stages.
Kalsoom Lakhani, co-founder of Invest2Innovate, is a trailblazer of gender inclusion in the startup ecosystem, spearheading impressive boot camps and programs like She Means Business, WeRaise and multiple programs under the Women's Entrepreneurial Finance Initiative.
Kalsoom explained that in order to drive equity in the investment landscape, “You have to layer inclusion and an inclusive lens into every angle of your approach - you can't design an inclusive program if there's no diversity among the program designers. You can't execute a program without diversity on the team. You have to be an activist in your design, sourcing, and in your execution, meaning you need to interrogate your biases at every level and ensure that it's something that is truly inclusive.”
She advised female founders to, “Enlarge your funnel in terms of investors, research who might be a good fit and if their mandate caters to female led companies and your geography or if they've invested in a similar model but in another market. Try to get as many warm intros as possible. You are going to get a lot of no's in your fundraising journey, it's just part of the journey, but making your funnel as large as possible increases your chances of that yes.”
The significant gender gap in entrepreneurship, particularly in regions like Pakistan, underscores the urgent need for change. By enhancing support for female entrepreneurs through equitable funding and fostering inclusivity, we can work towards a more balanced and fair ecosystem.