Framework
A systematic approach to promote gender equity and equality in the start-up ecosystem.
The Beat Funding Bias Initiative (BFBI)
Based on the existing research, gender equity disparities might exist due to gender-based biased approaches within the start-up ecosystem and amongst investors (males and females), which may have an inadvertent impact on the total number and percentage of female-led start-ups being funded compared to male entrepreneurs in Switzerland.
The gender equity gap is one of the most high-profile and persistent problems in entrepreneurship. Female-led start-ups, or those with at least one female founder, receive a disproportionately small percentage of the flow of global venture capital. In 2019, only 11% of seed-funding capital in emerging markets went to companies with a woman on their founding team. Recent studies show that only 4% of Venture Capitalist (VC) funds go to female-led companies.
Further, scholars have pointed out that a leading cause for this disparity can often be attributed to an unconscious and/or unintentional bias pertaining to strong gender stereotypes entrenched within the process of acquiring needed capital or via other related investment means for start-up companies, as well as only 5% of all later-stage funding. This is the case despite overwhelming evidence that investing in gender-diverse teams leads to stronger business outcomes.
To better address gender equity disparities, the FE+MALE Think Tank has designed The Beat Funding Bias Initiative (BFBI) to lead efforts to push and build organizational capacity to favor gender-bias-free approaches to help remove funding barriers for female entrepreneurs in Switzerland.
1
Raising awareness
2
Conducting targeted stakeholder workshops
3
Online toolkit
4
Market validation
What does Gender Bias mean exactly?
Gender bias refers to treating a person in a more or less favorable way based on their gender. Typically, gender bias occurs due to a set of beliefs that one gender is superior or inferior to the others. Gender bias can affect society in numerous ways, for instance, funding outcomes for female founders.
Everyone is biased to a certain extent, we use stereotypes and bias to classify our world; however, if bias is not acknowledged and happens unconsciously, it can cause harm without you even being aware that it is influencing your behavior and your decisions that might impact gender equity.
How does the pilot project work?
The pilot project approaches the issue from two dimensions: the perspectives of entrepreneurs and investors. It consists of an online toolkit that provides a systematic approach to strengthening processes, systems, and best practices, helping investors and entrepreneurs better identify and overcome operational shortfalls and gender equity gaps within their organizations.
The Goals of the Pilot Project are:
- Raising awareness of gender equity gaps within participating organizations.
- Supporting participants to improve their decision-making to address gender biases and equity gaps.
To support these goals, we utilize an assessment designed to help participants identify and address gender equity gaps. The assessment focuses on key domains, including demographic data and a SWOT analysis, enabling participants to become more self-aware in evaluating operational gaps and developing new capabilities to overcome them.
This assessment can also be used alongside the Take a Test (harvard.edu), which provides an objective, validated measure of implicit biases. Implicit Association Tests (IATs) are widely used in social psychology to uncover unconscious biases through computerized sorting tasks that reveal hidden associations.
The BFBI Products and Services are developed to specifically support investors and entrepreneurs alike to:
- Encourage a broader gender-based equitable approach for investors in developing intentionally balanced questions which can serve to better screen entrepreneurs seeking capital more effectively.
- Building new skills for prospective female entrepreneurs to better prepare and/or competitively orientate the formulation of answers during investor screening processes that can help to competitively secure and/or increase the amount of capital investment into their company.
The Training Method is built on the study entitled ‘We Ask Men to Win and Women not to Lose: closing the gender gap in start-up funding by Dana Kanze, Laura Huang, Mark A. Conley and E. Tory Higgins, published in Academy of Management Journal Vol. 61, No. 2.