There are real challenges to being a female entrepreneur, especially when it comes to acquiring funding. Numerous studies show that female entrepreneurs are less likely to secure venture capital or angel investment. 2017 marked an all-time high for VC deals for female-founded businesses in the US. Unfortunately this only amounted to 2% of the total, despite the fact that the US is ranked as the best environment in the world for female entrepreneurs.
Is this because women are less capable? Certainly not. Academic research has frequently shown that female entrepreneurs often surpass the achievements of their male counterparts. For instance, the 2016 Global Entrepreneur Monitor study found that women are 5% more likely to produce innovative ventures, compared with men, and the 2017 “Untapped Unicorns” report indicated that women-led businesses generated 20% more revenue with 50% less capital invested.
In Sub-Saharan Africa, the biggest challenge for female entrepreneurs is gaining access to finance. According to the World Bank Group’s Enterprise Surveys (2013), only 8.6% of Kenyan women are the majority owners of established registered businesses. In our seven years of training entrepreneurs in Kenya, we have seen these challenges play out time and again. Though women account for some of our brightest students with the most scalable ideas, access to capital remains a constant struggle.
According to Mary Thuo, a business owner and current Sinapis student in Nairobi, “Most of us have been having problems with access to capital. To get funding, the banks and lending institutions require collateral. In our culture, although it’s changing, men are the people who have collateral. They have the land, they have the houses. They are written in their names. So unless I take my husband to the bank, the bank won’t fund me.”
In late 2017, Sinapis decided that this was an issue we needed to address. Having never previously run programs for women only, we were excited to uncover the specific barriers faced by female entrepreneurs in Kenya. With a panel of influential female investors and entrepreneurs lined up, we marketed a workshop, “Raising Capital as a Female Entrepreneur” with a target audience of 100 women.
To our surprise, we received over 700 applications! With our seating capacity capped at 150, we selected the strongest applicants, yet on the day of the event the auditorium overflowed with 176 entrepreneurs in attendance.
The panel discussion was lively and offered a number of key take-aways:
- The core problem isn’t scarcity of funds. There is sufficient capital available for entrepreneurs, but most are not investor-ready.
- Gender bias is real among investors in Kenya, and female entrepreneurs are often not taken seriously.
- Women need to develop more confidence in themselves to successfully pitch their vision to funders. Roseanne Whalley, Senior Portfolio Manager at AHL Venture Partners, shared, “When entrepreneurs come in the door, I look for confidence, confidence, confidence, and then the ability to scale.”
- Support groups and mentors are vital to helping a business leader recognize blind spots and move beyond the limitations of her own experience.
The overwhelming interest in the workshop demonstrated the great appetite that women entrepreneurs in Kenya have for enhanced knowledge, networks and peer support. In response, Sinapis launched a class in January specifically designed for female entrepreneurs, and 27 outstanding participants joined.
Additionally, the seasoned business leaders who spoke on the panel at the workshop were so inspired by the entrepreneurs’ desire to learn that after the event they volunteered to serve as mentors! This exciting development, plus a second all-women’s workshop and class launch in May, are important early steps that Sinapis is taking to reduce gender inequalities and spur Kingdom business in the marketplace.