By Alejandra Winter, Director, CIC International Soft Landing
In Latin America 96% of financing pours into startups led by men, leaving a mere 4% for those spearheaded by women. This abysmal gap/staggering difference, pointed out by the global consulting firm Gender Smart, underscores the challenges women face in accessing foreign funds to drive entrepreneurship. While male-led ventures secure nearly $12 million in investments, their female-led counterparts raise just $500,000.
In the same vein, within startups focusing on cutting-edge technological advancements like web3, a mere 13% boast a female among their founders, and a paltry 3% operate with an all-female team. According to the report titled ‘Web3 Already Has a Gender Diversity Problem’ by the Boston Consulting Group, men in this sector receive up to four times more investment capital. Furthermore, among companies securing over 100 million euros in funding, none are exclusively composed of women.
A new commemoration of International Women’s Day is an opportunity to reflect and shed light on the persistent gender disparities within entrepreneurship and their far-reaching implications. The glaring underrepresentation of women perpetuates the misguided notion that ventures led by women are inherently less profitable. Moreover, lacking robust support systems for inception, expansion, and global outreach, fewer women dare to embark on entrepreneurial journeys. Consequently, this scarcity of role models and success narratives fails to inspire other women to pursue similar paths, perpetuating the cycle of underrepresentation.
In unpacking this reality, a myriad of causes emerges. At its core lies the stark asymmetry ingrained from early education, where women pursuing STEM (science, technology, engineering, and mathematics) fields remain a statistical minority against their male counterparts. Despite significant progress in recent years, this imbalance considerably diminishes the likelihood of women assuming leadership roles in well-funded companies poised for global expansion. For the few women who surmount these hurdles, venturing into the United States -a coveted hub for internationalization- presents yet another formidable challenge. They navigate as a triple minority: immigrants, women, and Latinas, each layer further complicating their quest for capital infusion.
Beyond these systemic barriers, stark contrasts in daily life further compound the challenge. A recent study by the Gender Equality Observatory of Latin America and the Caribbean revealed that women in the region dedicate three times more daily hours to household chores and caregiving for children and the elderly than men. These entrenched gender roles perpetuate stereotypes, manifest in practical scenarios. When a mother ventures into entrepreneurship and seeks global expansion, discussions around this feat invariably veer towards how she juggles familial responsibilities with her career aspirations, a conversation seldom directed at fathers. Moreover, even when men are parents, they seemingly effortlessly navigate full-time work while engaging in relationship-building and networking activities which are pivotal for enhancing business growth prospects.
Acknowledging and understanding this current scenario is crucial for instigating meaningful transformations and amplifying women’s presence within the startup realm and in accessing financial resources. We know that women have remarkable capabilities and talent to deliver groundbreaking projects with significant societal impact. However, these ventures can only flourish when the necessary conditions are cultivated.
Today, effecting change transcends mere financial allocations or the establishment of gender-specific initiatives. It needs a fundamental reevaluation of deeply entrenched societal norms cultivated over decades to give way to a more holistic and collaborative approach. Only through concerted efforts can we dismantle barriers, nurture diversity, and carve a path towards a more equitable future.
Article originally published in Spanish in La Tercera on March 8, 2024
