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Guidance for female founders of startups

October 11, 2022

reading time: 5 minutes

by Tilmann Schaal

Experts on female founders: Marlis Jahnke and Heidrun Twesten

Marlis Jahnke and Heidrun Twesten have published “Das Gründerinnen-Handbuch” (The Handbook for Female Founders of Startups). Why is it so important right now?

Founding a company with your own business idea, becoming successful as your own boss and being able to call the shots in professional matters – these are hopes that many women hold when founding their own company. Yet, there are many matters to consider when going about this, of both a private and professional nature, and “Das Gründerinnen-Handbuch” is here to help with that. Tilmann Schaal spoke with the two authors for MAG/NET. 

Your book cites some depressing figures in its introduction. Not only are there too few women founding companies in Germany, according to your sources, only a small fraction of the total sum of risk capital is being awarded to women. Be honest: how much anger did you have in your hearts when you decided to write this book?

We felt more incentive than rage. As a specific figure, the small fraction you refer to means that only around 20 percent of startups are founded by women, both globally and in Germany. We were most shocked to discover that women-only teams receive a mere one to three percent of global risk capital, and that a further nine percent goes to mixed teams. That means that approximately 90 percent still (!) goes to teams made up exclusively of men. The aim of “Das Gründerinnen-Handbuch” and our podcast EQUALIZER is to help to redress this imbalance. 

Your book has all the qualities of a handbook: well structured, practical and easy to understand. But many readers may not expect that you have also approached many female startup founders and company representatives, as well as male VC representatives, for comment. What was the logic behind this idea?

First of all, thanks for the compliment! Our goal was to write a highly usable handbook. To achieve this, we were eager to make use of the “crowd intelligence” of the startup scene. We spoke to female company founders, strong women from the venture capital scene and other actors from across the startup ecosystem. In order to make the interviews available in full for general use, we recorded them and launched our EQUALIZER podcast as an accompaniment to our book.

Anyone can found a company at any time!

Your book cites countless sources for more in-depth information as well as points of contact for female company founders. Among them are startup podcasts, economic development organizations, including chambers of industry and commerce, and networks of female founders. The message I took from that is that women founding companies don’t have to go it alone.

Founding never is a one-man-show – and it's heartwarming to see how supportive the startup ecosystem is! One tip that I would give to anyone, male or female, is to tell as many people as possible about your idea. This way, you will get valuable input from all sides and doors will open for you. Founding a startup is “ecosystem work” and networks are a necessary precondition for success. We always find it beautiful to see how well this has been working, including for women!

The aim of the book was to provide readers with relevant information and addresses to help them during the first year of their startup – including information about venture capital companies with female partners, awards, accelerators and networks.

Founder Marlis Jahnke
“Founding never is a one-man-show.” Marlis Jahnke.

One topic in particular is hotly debated: Can entrepreneurship be learned or is it a question of character? 

We fundamentally believe that anyone, male or female, from a variety of life situations and, of course, with the most diverse array of qualifications, can found a company at any time. The essential quality is entrepreneurial spirit, in other words the desire and ability to create something and to build it from the ground up – and, of course, to want to take on the associated risk.

Qualities such as “wanting to sell,” endurance, resilience, drive and – last but not least – open-mindedness and the abilities to learn and communicate are helpful. Not every startup founder needs to embody all of these qualities at once, but they should be present in the team. There was one tip that was shared by all of our interviewees: Just do it!

Aside from this “abstract” discussion, we also shouldn't forget that there are many issues that make it more difficult for women to take the step of becoming an entrepreneur. In your experience, what do these difficulties include?

We believe there are more obstacles in the paths of female company founders – we've already mentioned the added difficulties in procuring capital. This is caused in part by the fact that women's networks are still at a significant disadvantage to those of their male counterparts with respect to accessing capital and cooperation opportunities with established businesses.

Women have the feeling of not being competent enough and anxiety that others may pick up on more frequently than men – this internal barrier, known as impostor syndrome, leads to them being underestimated by investors, among other things.

In addition to this, there is also a lack of female role models, i.e. of visibility, in our opinion: There is less media coverage of female company founders. All relevant media that cover the founding of startups, including Wirtschaftswoche, Gründerszene, Deutsche Startups, etc., suffer from this blind spot. 

Entrepreneurs by tradition

The Princely House of Liechtenstein, the owner of LGT, has been successfully pursuing entrepreneurial activities for centuries. Entrepreneurial thinking and actions are deeply rooted in LGT’s DNA.

We’ve been enthusiastically tracking how much of a difference women's networks have made within the startup ecosystem over the last couple of years.

You describe in your book how important good networks are for startups. What is the significance of these networks, in your opinion?

Founding a startup is so complex that it’s impossible for founders to know and implement everything themselves, so it's good to have a diverse range of experts, experienced entrepreneurs, alumni, etc. at play behind the scenes. The more diverse and relevant the network, the better. The quality of this network is a crucial factor to success, especially when fundraising and recruiting.

We’ve been enthusiastically tracking how much of a difference women's networks have made within the startup ecosystem over the last couple of years – as well as Female Founders in Austria, in particular Encourage Ventures and Evangelistas in Germany, to name but a few. In these networks, the relevant actors are advancing the common cause and providing mutual support – the sense of collective belonging has noticeably changed and improved. In doing this, the networks operate on the principle of “give and take” and expand their ranks.

Female Founder Heidrun Twesten
«The essential quality is entrepreneurial spirit, in other words the desire and ability to create something.» Heidrun Twesten.

Of course, the same applies for “diverse” networks, which are just as important for female founders of startups – it is precisely in this still very much male-dominated environment that they should also be active. 

In order for a startup to grow into a company that’s viable in the long term, it needs investors. As we learn in the introduction to your book, men are much more successful in this regard. Which factors have you identified that will make women better able to secure capital for developing their startups? 

We think that women should use the existing system more to their advantage. Though not without working like never before to change it!

We have already demonstrated the importance of networks: VCs are not usually acquired “cold” – contact tends to be established with them by means of “warm introductions,” in other words, being recommended by someone known to both parties.

Female startup founders have no influence over who provides them with venture capital – in most cases, they are men: The proportion of women in top positions in VCs is estimated to be a shocking five to ten percent. This is why we name VC funds with female decision-makers in the book – they have first-hand knowledge of matters related to companies founded by women (e.g. FemTech) and are in a better position to evaluate their potential than their male peers. 

All women should feel emboldened by a study by the Boston Consulting Group, according to which financial commitments to women-led startups have better prospects. Which leads me to my last question: Which strengths have you identified in young, female entrepreneurs?

This study by Boston Consulting has the wonderful title of “Why Women-Owned Startups Are a Better Bet”, and shows that the five-year performance of startups founded by or with women is around ten percent higher (cumulative sales) than those with male-only teams. They also performed significantly better in terms of return on investment: For every VC-financed dollar, startups founded by and with women generated 78 US cents, more than twice much as male-only teams at 31 US cents.

The proportion of women in top positions in VCs is estimated to be five to ten percent.

We find hope in the fact that something is definitely being done for women and that there are lots of great initiatives for empowering female startup founders and for motivating women to become founders. These range from women-only accelerators, such as the Grace Accelerator, to networks of female investors, such as Encourage Ventures, as well as initiatives such as Level 20 for attracting more women to the VC scene.

It is also at least just as important that there is growing consciousness (among both women and men!) that the shortcomings outlined must be improved. Initiatives such as Startup Diversity by the Federal Association of German Startups (Bundesverband Deutsche Startups e. V.) and Bitkom are an encouraging sign for us, in that they are using their initiative to commit to reporting on female investments by VC funds, the promotion of women in management at scaleups, public investors and public funding instruments as a lever for more investments in female-led startups and holding government actors and educational institutions to account.

We are delighted that more role models are now “visible” and that there is great momentum for female startup founders! We are therefore drawing ever closer to a diverse ecosystem that includes the greatest possible number of perspectives. This is immensely significant for our common goal of making the world a little bit better – and not just with respect to gender, but also regional, cultural and social background, age, education, etc. We can only solve the great issues of our time together!

About the authors

After a career in the music industry, Marlis Jahnke set up an agency for online communication with investor support. In 2014, she founded HashtagLove, Germany's first influencer marketing platform. After building up a pool of over 13,000 registered influencers and running 300 campaigns, she sold HashtagLove in 2020. Nowadays, she is a speaker and textbook author and works as a mentor and certified advisor for startups and companies.

Heidrun Twesten guided numerous IPOs as early as the first wave of German startups in the late 90s, and played a role in establishing one of today's leading German investor relations agencies as a member of the Board of Directors. She advises companies ranging from startups to blue chips as an executive advisor on capital market matters and in transformation processes. As a business angel and mentor, she supports national and international startups and accelerators.

Together, they host the podcast for female founders of startups, "Equalizer"

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