For the second year in a row, the share of women among founders of German start-ups has increased. However, women continue to be underrepresented in the startup ecosystem, and especially in the areas of growth and financing there are major challenges for female founders. How can this imbalance be explained and where should we start in order to strengthen the positive development? The Female Founders Monitor aims to bring these questions into focus.
Positive momentum continues
The share of female founders in German start-ups will increase from 16 to 20 percent between 2020 and 2022. This is also reflected in the composition of the teams: 37 percent of start-ups now have at least one woman in the founding team. At the same time, the slow increase shows the still significant gender imbalance. The structural hurdles for women in the start-up ecosystem are still high. “Startups are the driving economic force of our future. Instead of slowing down female founders, we need to continue to remove hurdles and finally create real equality,” says Sebastian Dettmers, StepStone CEO. “There is reason for optimism: we are in for a decade of equal opportunities. Because in the age of workerlessness, we can no longer afford unequal treatment. We must mobilise all forces now to maintain our prosperity.”
Growth and financing are the main hurdles
Especially when it comes to growth, the difficulties for women founders become clear. For example, start-ups founded by women have an average of 7 employees, significantly fewer than the male teams with 28. One reason for this: the gender gap in capital. While the female founding teams surveyed have received an average of 1.1 million euros so far, the financing volume for male teams is nine times higher at 9.7 million euros. More than four out of five women see a structural problem and agree with the statement that female founders are eyed more critically than male founders when it comes to investment decisions. Furthermore, significantly fewer women are active as business angels. Only 6 percent of female founders invest in start-ups themselves, compared to 16 percent of men.
Reconciling family and entrepreneurship often problematic
The average age at the start-up phase is 36 and thus often coincides with the family planning phase. Female founders in particular are often doubly challenged by family responsibilities. For example, the weekly working hours of female founders with children fall by an average of almost 6 hours, while this effect is hardly noticeable for male founders. This is also reflected in the political demands: four out of five women see better offers for reconciling family and entrepreneurship as a central lever for strengthening the ecosystem – among men it is only one in two.
“In order to strengthen women entrepreneurs in Germany and make this path a real option for more women, we need to address the structural framework conditions. This means that female founders also need reliable protection while starting a family,” says Franziska Teubert, Managing Director of the Startup Association. ”This includes maternity protection for the self-employed, more flexible parental leave, better tax deductibility of childcare costs and the nationwide expansion of quality childcare services.”
Relevance of networks and initiatives
Women are almost twice as likely to start a business alone as men. This reflects a lack of networks and leads to further challenges, as team start-ups benefit from additional resources, expertise and contacts. However, when these networks are in place, the impact is huge. Female teams, for example, are much more likely to rate their startup ecosystem positively (82 percent) than individual founders (47 percent). The value is significantly higher than that of male and mixed teams, which underlines how important specific networks and initiatives in the startup sector are for female founders.
More insights from the Female Founders Monitor 2022:
With a share of 49 percent, the own four walls are the most important place of work for female founders – for male founders, the office still dominates.
Purpose plays a central role for female teams and 61 % assign themselves to the field of social entrepreneurship.
Consumer goods, nutrition and health are the TOP-3 industries of startups founded by women.
Women teams focus on B2C and generate almost 50% of their revenues in this segment – compared to only 23% for men teams.
Women’s teams are less likely to be satisfied with their business angel and venture capital investors (68 percent) than men’s teams (82 percent).
About the Female Founders Monitor
Since its first publication in 2018, the Female Founders Monitor has established itself as one of the central publications on female startup founders in Germany. Based on the extensive survey data of the German Startup Monitor with almost 2,000 participants annually, the topic area of startup founding and gender can be examined from many different perspectives and valid statements can be made about the potential and challenges of female startup founders in Germany.
About the Startup Association
The Bundesverband Deutsche Startups e.V. (own name: Startup-Verband) is an association representing the interests of the German startup industry. The registered association was founded in Berlin in 2012 as the representative and voice of startups in Germany. The association supports German start-ups by representing their interests vis-à-vis politics, business and the public, and works to make Germany and Europe start-up-friendly locations. The goal is an equal exchange between startups, established business and politics. Start-up knowledge and experience are to be passed on from generation to generation and the start-up culture is to be carried into medium-sized businesses and corporations.
Further information on the Startup Association can be found here.