First, the good news. As research covered elsewhere in our business section reveals, the number of female-founded technology start-ups in Ireland is on the rise. What’s more, such companies tend to be well-funded, adept at creating employment and spread across virtually all industry segments.
The research, believed to be the first of its kind, shows that almost two-thirds of indigenous women-founded tech firms are less than five years old, while almost half of them have already secured funding.
Collectively, the female-founded companies tracked by TechIreland have raised an impressive €263 million. The research offers a great snapshot of where we are and how we might compare to other countries. But it also shows there is plenty more to be done.
Niamh Bushnell, the former Dublin Commissioner for Start-ups who now heads up TechIreland, says the findings are encouraging.
“The figures are strong relative to many other countries and Ireland should be super-proud of that,” she told me this week. “As they say, the future is female and the figures are showing us that.
“Even more importantly in many ways is the quality of companies female founders are building – companies like AQMetrics, SoapBox Labs, Beats Medical, Restored Hearing, Coroflo and Unravel Analytics. These and many others in Ireland are world-class companies with solutions that are shaking up industries. Their female founders are recognised as thought leaders internationally and are role models for the next generation here at home.”
Female-founded firms
She's not wrong. And many of the impressive female-founded companies born of late have blossomed on the back of increased funding and scaling support from organisations such as Enterprise Ireland (EI).
According to Sarita Johnston, manager of female entrepreneurship at EI, the number of female-founder firms backed by the agency has risen from just 7 per cent in 2011 to 20 per cent last year.
Back in 2011, Ireland lagged behind many other countries in terms of women-led businesses. Research commissioned by EI identified a number of challenges facing women entrepreneurs, including a lack of role models, lower self-confidence, lack of technical expertise, lower levels of risk-taking and limited access to networking opportunities.
It’s worth noting there have been just two female winners of the Ernst & Young Entrepreneur of the Year overall award in its 20-year history – Moya Doherty (jointly with John McColgan) in 1999 for Abhann Productions, and Anne Heraty of CPL Resources in 2006.
EI and other organisations have responded to this over the years with initiatives such as the “Fuelling Ambition” roadshows and dedicated female accelerator programmes.
Johnston is quick to note that backing female entrepreneurs is good, not just for the individuals concerned, but for Ireland as a whole.
“There is significant untapped potential when it comes to women starting their own businesses and therefore we are missing a trick if we don’t have them playing a greater role in growing their economies. It follows that fewer female entrepreneurs result in fewer ideas being realised, less innovation, less export potential and fewer jobs created,” she says.
Still low
While there has been a sharp rise in companies established by women in Ireland in recent years, the percentage of female-founded start-ups remains relatively low overall, accounting for about 15 per cent of the 1,460 companies currently tracked by TechIreland.
Ireland is not alone in this and in fairness stands up pretty well against the competition. Recently compiled figures from Crunchbase, for example, show just 6,791 of the 43,009 global companies it tracked which received initial funding from 2009 to 2017 had at least one female founder. That works out at 15.8 per cent overall.
Their research also shows that, from 2009 to 2012, the percentage of venture-funded companies with women founders increased by nearly 8 percentage points. However, it has plateaued at about 17 per cent ever since.
Moreover, Crunchbase findings indicate that at each progressive funding stage, female-founded firms raise lower per cents of overall funding.
While access to funding can be fraught for any start-up, there is plenty of evidence to suggest that female founders can be overlooked when seeking investment. Indeed, earlier this year SheEO, a new crowdfunding platform which is seeking to build a $1 billion fund for female entrepreneurs, was launched to address the issue.
A National Venture Capital Association (NVCA) and Deloitte survey in the US last year shows that even with a rise in the number of women working in the VC sector, it is still very much a case of "bros fund bros".
Administrative functions
Although women comprise 45 per cent of the total venture capital workforce in the US, they are consistently over-represented in administrative functions and under-represented in investment ones.
The study found that women represent just 11 per cent of partners on venture investment teams and, in general, the smaller the firm, the smaller the percentage of females working at decision-making level.
The TechIreland research shows female founders in Ireland are proficient at getting their hands on investment. However, as Bushnell notes, we can’t be complacent.
As well as encouraging and supporting more women to start tech firms, it is just as important to see them working in the sector generally, particularly in high-level roles. Further steps to encourage women to study Stem (science, technology, engineering and maths) subjects, along with continued funding and scaling support will of course help.
There is a need to stamp out the toxic culture that celebrates “tech bros” and continues to denigrate everyone else. Only when this happens will we have a welcoming environment where everyone can thrive.
