To celebrate international women's day (March 8th), we decided to take a look at the gender gap in the entrepreneurial and investment world.
In Belgium and more generally in Europe, investing and entrepreneurship are still mostly masculine activities. If today, a lot of initiatives exist to incite and to help women create their own business, the majority of Belgium's entrepreneurs are men. And, it's the same for the investing world: if investing is open to anyone, regardless of their gender, in reality, being an investor is mostly a "male" activity.
Female entrepreneurs are still rare
If in Europe and in Belgium, women constitute the majority of the population, they actually represent a minority in the entrepreneurial world: 34.4% of self-employed workers are women and only 30% of start-ups are led by women. In Belgium, those numbers don't vary a lot: in 2012, women represented 31% of the Belgian entrepreneurs. These women are mostly active in the service-oriented sectors as well as in the health and social sector, while men are mostly active in the construction, transportation, finance and insurance sectors.
Even though a lot of initiatives exist to encourage female entrepreneurship, we can wonder what are the reasons behind that gap between genders, what are the difficulties women are facing?
According to Inge Van Belle, cofounder of Herculean (the star-up behind corporate sportive events such as the Herculean trophy), women entrepreneurs, or those wishing to be, are facing a lot of obstacles: stress, the difficulty to find a balance between private and professional life. Two reasons to which the European Commission also added the poor access to information and to networks and the insufficient training.
Another important challenge is the lack of financial security and the poor access to financing. This access is once again unequal, as shown by a BNP study: when analysing the total amount raised by 600 fundraising campaigns, women only received 7% of the total amount.
We can see that women are raising less funds than men, which can also explain the challenge of launching their own business and thus, the lower number of women entrepreneurs.
However, when a woman is an entrepreneur, it brings an added value to the entrepreneurial world. A study conducted by Faccio, Marchica and Mura showed that companies led by women have lower leverage, have less volatile earnings and are more likely to stay in business than companies led by men.
This can partly be explained by the fact that women are generally "more pragmatic, more rigorous and do not share the same risk-culture than men". This is also true for women investors.
Inge Van Belle also adds that the feminine intuition represents an advantage in the entrepreneurial world: " I think that women trust more their intuition than men do and, in this world, where it is necessary to quickly adapt ourself, it is an important advantage". And, for her, it is refreshing to have women entrepreneurs in the entrepreneurial world: "based on my experience, most men find it refreshing to interact with women entrepreneurs. I notice that there is a lot of respect, especially when people know that you combine a family life with a professional life"
Women investors are in the minority
In the collective unconscious, the relationship between women, money and investment is a relationship still loaded with stereotypes: women are lavish, they don't know a thing about investing, they are not gifted for everything related to finance, etc. If those stereotypes are still vivid, it's also because in those sectors, women are, once again a minority: as an investor, the proportion of women is lower than that of the men; in the crowdfunding world for example, men represent 90% of the investors.
This under-representation can partially be explained by the fact that stereotypes are nevertheless anchored in each and every one of us, whether we are aware of it or not. The administrator profile of women can also explain this difference: preferring security, investing can appear as a solution that is not appropriate for their situation. Those are only two reasons among many others and they cannot be generalised to every woman: each situation is unique.
Nevertheless, women invest and when they do, they mostly invest in sectors or start-ups where women are very present. For example, the e-commerce sector, the online products and services, as well as online platforms. At Spreds, we have noticed that women favour investment in start-ups offering a service related to family (2houses), renewable energies (Zen car) but also the cosmetic or fashion sector. For men, most of their investment are in start-ups in connection with the food industry (Woké, Belgibeer or James Lind).
Finally, it is interesting to highlight that even though the number of women who invest is lower than the number of men, when they do invest, they often obtain better results than men! This finding comes from an American study, which realised that investments made by women are more likely to be fruitful because they followed a long-term strategy.
Indeed, a certain amount of data seems to indicate that men and women have different investment strategies: women favour long-term performance, security and are more sensitive to the notion of diversification, which is crucial when it comes to investment. Men are at the complete opposite when investing: they prefer short-term performance, the challenge it represents and the risks associates with investing, plus, they also have a tendency to invest everything in one big project.
What are the solutions for this under-representation?
Today, we are in a society that creates a lot of initiatives in an attempt to reach the perfect gender equality. But, as we can see with the entrepreneurial and investing world, the parity is far from being reached.
To sketch a solution to this problem, we can insist on the necessity to better inform people on the available fundraising platforms, the available trainings to help entrepreneurs and the investment mechanisms, etc. But, we also need to deconstruct as much as possible gender-based stereotypes, and this, in every sector possible.