The Big Story: Removing barriers to entry for women entrepreneurs. Although the number of women-founded companies across the globe has doubled over the past decade—from 10 percent in 2009 to 20 percent in 2019—women entrepreneurs still face significant roadblocks when competing in the largely male-dominated technology sector. The gender disparity in the technology sector, driven in part by systemic sexism and responsibilities like child care and family caregiving, makes it more difficult for women entrepreneurs to break into the space with their own unique ideas and visions. Women represent just 11 percent of venture capital investment partners across the U.S., and women-led companies raise an average of 13 percent less in funding than their male counterparts. Women-led startups received only 2.8 percent of VC funding in 2019, while Black and Latino women founders combined to receive just 0.64 percent of total VC investments. That’s why it’s so critical for the startup community and policymakers to confront the challenges women entrepreneurs face and ensure that a diverse range of individuals are able to pursue entrepreneurship.
Founders across the country have drawn attention to the lack of support and resources that women entrepreneurs receive when launching and growing their own companies. Cindy Foy-Uhlir, the Founder and CEO of Fierce Female Founders, started her company to address some of the challenges that women entrepreneurs face. Foy-Uhlir told us that the three most common problems women founders face are that they’re “not sure about the right next steps if they want to scale, they lack a network of other women entrepreneurs that understand what they’re going through, and they lack access to capital.”
Policymakers and the tech industry must take steps to empower women entrepreneurs by boosting the number of women’s voices in the startup sector. Studies have shown that diverse teams produce better economic results. Companies that embrace gender diversity are 21 percent more likely to be profitable, and businesses founded by women generate higher revenue. While women-founded companies are 2.5 times more likely than all-male founded companies to hire women—which brings more diverse representation to the startup ecosystem—startups and technology companies founded by men must also work to boost the diversity of their workforces.
Other women founders also noted how some responsibilities traditionally associated with women—such as elder or child care—have proven to be barriers to startup formation. Yasmin Mattox, the Founder and CEO of Arkatecht, started a company that creates professional development tools to help working parents advance and succeed in their careers. Mattox told us that the challenges she’s experienced as a woman founder “have revolved around a lack of relatability by many men in the startup and policy spaces as to the problem we’re addressing.”
Dr. Grin Lord, the Co-Founder and CEO of Empathy Rocks, launched a startup that uses artificial intelligence, technology, and online games to give people—particularly those working in crisis settings—resources to empathize with others. Dr. Lord told us that the cost prohibitive nature of child care makes it more difficult for her to operate her company, with most of her startup-centric work happening in the evenings when her children are asleep.
While the technology sector is working to become more diverse and inclusive, policymakers have an important role to play when it comes to supporting the development of women-led startups. Lauren Hanson, the Founder and CEO of flipMD—a Philadelphia-based health care startup that lets physicians find consulting opportunities and allows companies to source medical talent for their projects—told us that “the perception is beginning to shift to a more equitable understanding that women need to play many roles, and that the balance of those is their superpower.” In order to keep this progress going, Hanson believes that policymakers should increase their support for women entrepreneurs in order to provide them better access “to entrepreneurship resources and networks that give them the opportunity to become a woman founder.”
Policy Roundup:
House panel hears from tech CEOs about content moderation. Two House Energy and Commerce subcommittees held a hearing yesterday with Facebook CEO Mark Zuckerberg, Google CEO Sundar Pichai, and Twitter CEO Jack Dorsey to discuss Section 230 and the content moderation practices of large Internet companies. While all three CEOs outlined their companies’ efforts to combat extremism and misinformation online—including citing statistics on their moderation efforts—policymakers assailed the three social media giants for either not moderating enough user content or allegedly censoring certain users. As we noted earlier this week, the content moderation debate will disproportionately impact startups as “it’s impossible for any online company—particularly a nascent startup—to identify and remove all harmful user-generated content.”
White House, House Democrats explore proposals to boost Internet access. The Biden administration is reportedly considering plans to move forward with a roughly $3 trillion infrastructure reform package that would include funding to help expand connectivity across the country. News about the White House’s infrastructure efforts comes as Democrats on the House Energy and Commerce Committee continue to pursue legislation—known as the LIFT America Act—that would, in part, allocate billions of dollars towards the nationwide deployment of reliable, accessible, and affordable high-speed broadband services. The House panel held a hearing this week on the bill’s proposals to improve Internet access in underserved communities across the U.S.
Engine asks Commerce Department to prioritize new transatlantic data transfer. Engine and Allied for Startups sent a letter this week to Commerce Secretary Gina Raimondo asking the agency to prioritize negotiations with European officials over a successor framework to the U.S.-EU Privacy Shield agreement that was struck down last year by the Court of Justice of the European Union. As the letter notes, the invalidation of Privacy Shield—which allowed U.S. companies to process and store European users’ data in America—means that “many U.S. startups are facing substantial difficulty sharing data across the Atlantic, impeding their ability to operate in that market.”
Startup Roundup:
#StartupsEverywhere: Rochester, New York. Arkatecht is a startup that creates professional development tools to help working parents advance and succeed in their careers. We recently spoke with Arkatecht’s Founder and CEO, Yasmin Mattox, to learn more about the startup’s focus on supporting working parents, what it’s like to be a woman founder, and why it’s important for policymakers to engage with the startup community.
