By Dr. Susan Clark Muntean, Associate Professor of Management at UNCA

After the pandemic hit, what used to be the “three percent club” became the “two percent club.” In the venture capital world, this special title is given to the female founders that break through the glass ceiling in the world of equity finance of high growth potential and technology startups. That means almost every venture capital dollar invested in startups  – 97 to 98 percent  – is invested in male-founded firms. And those female-founded enterprises that do break through receive a fraction of the dollars received by comparable male founded ventures. 

Given there is a dearth of evidence that suggests that female founders are any less deserving, competent, creative, or innovative relative to their male counterparts, think of the billions of dollars of wealth that has not been generated, the thousands of jobs that have not been created, and the economic, social, and political power gap that remains in our country just due to this gap alone.

Despite rising awareness, verbal commitments, and an increase in programming and special funds dedicated to supporting women in their entrepreneurial endeavors, the needle simply has not moved at the national level. How do we fix this and what can we learn from what has been working well in Asheville/ WNC to support female founders?

Since I arrived in AVL in 2014, I have seen considerable progress in how leaders and mentors at entrepreneur support organizations here have intentionally sought to include and resource female founders. Over 50% of the founders recognized in the Venture 15 Awards were female, and 50% of all the organizations served over the last two years by Hatch Innovation Hub’s mentorship program, the Pressure Test have been female-founded. While much work is to be done yet to close the equity funding gap, our region can serve as a model for what to do right in building inclusive entrepreneurial ecosystems. 

For over a decade, closing the gender gap in entrepreneurship has been my passion as a researcher, writer, mentor and advocate for  all things related to founders and  gender equality. This article shares  highlights of my research and action steps that have been empirically proven to work. 

Problem: Women are not “thought of” as entrepreneurs.

Unfortunately, an all too common experience is feeling second guessed, condescended to, and underestimated by those whose stated mission is to serve all entrepreneurs. 

Action Step: Check your assumptions.

Assume that women are competent, intelligent, savvy founders. Don’t assume that because they are mothers, retired, or look like runway models that they aren’t fully capable of founding, running, and leading a multi-million (or billion)-dollar enterprise. 

Action Step: Ask women what their goals are.

Maybe they want to launch and run a Fortune 500 company. Maybe they want to pay their employees triple the going rate or be carbon neutral and are willing to engage in slow growth to forward important social or environmental impact goals. You won’t know unless you ask.  And when women speak, actively and empathetically listen. Don’t gaslight, second guess, question or recommend to them what you think they want or need. Simply ask, hear them, and tailor your advice to what they really want and need.

Problem: Partnership, support, and investment networks are gendered.

Another very common problem is that male founders seek out partnership, mentorship, and investment solely from other men. Similarly, women too often turn primarily to other women for support. Sociologists call this phenomena “homophily,” that is, humans want to hang out and work with people that are like them.

Action Step: Get talented women on board(s) early.

Founding teams shouldn’t wait until they are generating revenues or breaking even to invite talented women to the table – as co-founders, members of the top management team, and advisory board members. Diverse founding teams, top management teams and boards translate into greater innovation, better decisions, and higher financial performance and returns to investors. 

Problem: The “ideal entrepreneur” archetype is still portrayed as male.

Angel investors and venture capitalists know very little about female founders and are highly skeptical of their potential to launch, grow and run wildly successful ventures. This is due to implicit bias and what our culture, the media, and existing power structures keep showcasing as the “ideal type” entrepreneur. As a result, investors flock to founders that look like Elon Musk, Sam Bankman Fried, Mark Zuckerberg, Adam Neumann, etc. And we know how these investments ultimately turned out.Charisma and looking and acting like Steve Jobs does not make one a safe and strong bet for real value creation for society and sustainable investments for the public (note that this didn’t work for Elizabeth Holmes either – who followed the flawed playbook of Silicon Valley to blindly “move fast and break things,” “fake it ‘till you make it,” and overpromise, hide or lie about reality).  

Solution: Operationalize equity in investment decisions.

The recommended path out of flawed “gut feel” investment decisions is to intentionally adopt objective criteria for investment decisions, adopt practices that keep investors accountable for equitable and inclusive funding decisions, and to actively solicit, recruit, and equitably fund a portfolio of high potential female founders and diverse founding teams. 

Women need to be integrated into the mainline funnel for equity investment. While women-only networks, funds and programs may provide female founders with social and emotional support and comfort, they too often further marginalize women as a category. Further, programs designed to address “deficiencies” they assume  women have with respect to business completely ignore the primary culprits of the gender gap in entrepreneurship—flawed and exclusionary practices, implicit bias, gendered networks, and lack of equal access to mentorship, capital, and the limelight. The burden to fix the gap is on leaders of entrepreneur support organizations, that is, those accelerator programs, incubators, small business centers, venture capital firms, and angel investor networks that connect entrepreneurs to the resources they need to reach their potential.

Solution: Let’s keep learning.

I hope you will reach out to me to ask questions, bring solutions, and launch conversations about how we can collectively and collaboratively do a much better job in Asheville and beyond in supporting deserving female founders, funding their ventures, and growing a thriving, inclusive entrepreneurial ecosystem. Also, consider buying or recommending my book co-authored with Banu Ozkazanc-Pan titled Entreprenuerial Ecosystems:  A Gender Perspective (2022), Cambridge University Press. 

Susan Clark Muntean is an Associate Professor at UNC Asheville and a Hatch board member and mentor. She can be reached at smuntean@unca.edu.