INSUBCONTINENT EXCLUSIVE:
In the increasingly crowded world of venture capital, many more firms are producing research as a way to differentiate themselves from the
Earlier this year, for example,Wing,a venture firm that focuses primarily on enterprise startups, published a state of the industrial IoT
The consumer-tech investment firm Goodwater Capitalis becoming known for its occasional equity research report on a still-private
company.
Now Illuminate Ventures, a nine-year-old, woman-led, early-stage venture firm that focused on enterprise cloud and mobile computing
startups, has produced some thought-provoking research of its own around how women and male founders view entrepreneurship, from why they do
it to how much support they receive from family members.
First, a little about Illuminate methodologies
According to firm founder Cindy Padnos, the firm initially reached out to 1,200 tech founders and venture capitalists who Illuminate
presented with a litany of questions about entrepreneurship and motivations and challenges that people face in starting companies
In the end, says Padnos, Illuminate had a response rate of just more than 30 percent, or slightly over 400 completed responses, which it
used SurveyMonkey tools to collect.
Roughly half the responses came from partner-level VCs at 150 different venture firms; the other half
came from United States -based founders who raised venture funding in 2017.
So what did they have to say A lot
If we&re being honest, the survey was so wide-ranging as to be a bit overwhelming
(You can check out the full paper here.) In the meantime, some of the most interesting takeaways can be grouped into a couple of different
One of these seems to disprove old myths
Among them:
The belief that entrepreneurs launch companies chiefly for financial gain is seemingly a myth
Only 15 percent of male founders and 2 percent of the female founders who responded to the survey said that money is their primary
motivation.
Respondents — both founders and VCs — also dismissed the idea that a founder needs to have a STEM degree to be a successful
tech founder.
Traditional thinking that women founders are more risk-averse than men or are unable to balance the needs of work and family
are also incorrect or, at least, outdated, based on feedback from survey respondents
More than twice the percentage of male founders indicated that &balancing family and work& was a strong barrier to their starting a company
(31 percent versus 17 percent of women founders)
They also rated the &need for financial security& as a strong barrier in slightly higher numbers (49 percent versus 42 percent of women
respondents).
It widely believed that both women and men, especially in today go-go markets, start companies largely for the potential
financial gain, but money actually has little to do with why either start companies
In fact, women say the top three reasons they start companies, in descending order of importance, is to bring their ideas to market, create
a long-lasting business and prove to themselves that they can do it
Men similarly said that bringing their ideas to market is their top motivator, followed by creating a long-lasting business
Men did rate the &significant financial gain& that can come with entrepreneurship third on their list, so it not entirely a &myth,& even if
it greatly exaggerated.
Interestingly, the survey also showed a real disconnect between how VCs view founders and how founders view
For example:
Male VCs ranked male founders as likely to be stronger than women in 4 of 10 &success attributes& that were measured
Similarly (and somewhat depressingly), women VCs found only one attribute where they saw women founders as stronger than men, being &smart
risk-takers.
In large percentages, both male and female VCs saw 15 of 16 potential barriers to entrepreneurial success as more likely to
impact women founders than men.
More than half of VCs said they believe that men are more likely to have attributes like &prior start-up
experience& and the &desire to scale a business massively.& But founder responses refuted the notion that they share VCs& thinking on this
front.
Another way that VCs and founders appear to think differently: None of the VCs who participated in the survey selected &gaining the
support of family& among the top five barriers to entrepreneurial success, while nearly a quarter of both male and female founders said it
was.
A stat we found to be particularly surprising was the disconnect between how male and femaleVCs view founders who ''think big& and have
&strategic vision& and how that impacts their odds of achieving their goals
While 40 percent of women VCs said this was a bigger barrier to success when it comes to female founders, just 12 percent of male VCs said
the same of female founders
Could it be that women investors think they are more attuned to how women founders are perceived Are they themselves harder on women
founders Or are they meeting with more women founders and seeing less ambitious ideas than they&d like In some ways, the stats create more
questions than they answer.
Again, you can check out the full study here
It has all kinds of interesting nuggets that could start fresh conversations about what happening in the startup industry right now.
