Is It Easy For Women In India To Raise Funding For Their Startups?

The Problem

Earlier this year, the Elephant in The Valley survey threw up sharp numbers and true personal accounts of gender discrimination and how the world’s largest hub for innovation and technology remains plagued by sexism. The problem with the numbers, is that they're not simply uncomfortable, they're alarming. The numbers have taken into consideration skilled women, good at their jobs, actively pursuing opportunities they are qualified to handle. And yet, the ratios could make the best of us squirm in our seats.

This is not fresh news. But what adds to the worry is the fact that most men are not aware of the problem. A problem that refuses to go away. We have done our due diligence on sexism in Silicon Valley, as much as is possible while sitting across the pond from it. Stories of unwanted sexual advancement, repeated questions regarding marital status and family situations, female employees being asked to smile more, and the nightmarish TechCrunch Disrupt incident where ‘Titstare’ was allowed to present, are skin-curling. More importantly, they push women ten eras back in time.

Of all the articles written and observations made on Ellen Pao vs Kleiner Perkins, the most notable commentaries can be found in the ‘Comments’ sections. We systematically eliminated the trolls and used our carefully honed stalking skills on all the commentators. We were left with people who were educated techies, coders and business owners, and strangely, all male. Apparently, the majority of them do not see why it is discriminatory, and irrelevant, to ask a female interviewee about her plans regarding marriage and pregnancy.

The Ecosystem

In 2016 itself, India has emerged as the 3rd biggest startup hub in the world. The Indian startup ecosystem is a thriving one growing at an accelerated pace, wherein the number of startups had grown to 4200 and $2 Billion USD was raised as funding, in 2015 alone. My co-founder and I, both new to entrepreneurship, have been doing our homework, albeit a bit prematurely, on scaling. It has been interesting (and inspiring) to note that a growing number of Indian women are at the helm of new ventures in India. However, the disappointment sets in when we scratch the surface a little harder and realize that only 9 out of 100 new entrepreneurs in India are actually women. That is undoubtedly a harsh ratio to swallow.

Female Entrepreneur Index Score, 2015
Female Entrepreneur Index Score, 2015

The FEI (Female Entrepreneurship Index) scores for 2015 published by GEDI, underlines the scarcity of women in business, by revealing India to be one of the countries whose institutions are least supportive of female high-growth entrepreneurs.

There could be a multitude of reasons why women are not getting an equal share of the pie -- cultural and social conditioning, lack of financial or family or community support, restricted access to appropriate resources and so on. But we wondered if women founders who’ve successfully raised funding for their ventures also faced the issue that most women face today at the workplace — the problem with being a “girl boss”.

Sairee Chahal of Sheroes, wrote an article back in 2014, relaying her experience as an entrepreneur trying to raise money for the company and how Indian investors need to be vigilant against importing the mistakes that are rampant in the Valley. We asked four more entrepreneurs on the lessons they’ve learnt while building empires of their own.

What are the most important lessons you have learnt while raising funds for your startup?

BabyChakra is an ecosystem for mothers to help support them through maternity & childcare. Naiyya Saggi, CEO and Founder, has had an impactful experience, after bootstrapping the company for 7 months.

Naiyya: When investors are truly interested in you, they commit to invest immediately. The process moves super fast and there is very little need to follow up with them. Entrepreneurs need to stop wasting time following up on investors who are slow and prioritize engagement with investors who are truly 'into you'.

Kanika Tekriwal, the CEO and Founder of JetSetGo, made the Forbes 30 Under 30 Asia list this year. The company is part of the private jet sector and endeavors to make private jet charter vastly economical and simple. Her lessons have been eye opening.

Kanika: When I first started the business, I was of the mindset that I will build a business out of my savings, earn money reinvest it and grow steadily but organically. I never understood the whole startup funding play and considered it as some fad. It was only later I realized that I may or may not be able to scale up my business as quickly as I want and create barriers to entry without a boost of growth capital. In addition, I saw the value in kind especially with the relationships and capabilities most funds were bringing to the table for some of my friends who started out on their own which made me appreciate the value in going this way.

Ritu Srivastava, CEO and Founder of Obino, stresses on the importance of having passion and focus as the primary drive.

Ritu: It is critical to have a passionate founding team with a personal connection to the problem they are solving. It helps if the Founder(s) have left well-paying jobs to take the entrepreneurial plunge as that highlights their belief in the concept. And that level of passion and skin-in-the-game is what convinces investors that here’s a team that will not stop unless they have a successful solution.

Srivastava, having battled with weight in the past, launched Obino as a virtual health coaching solution that intelligently pairs each user with their own personal health coach.

As a woman founder, what obstacles have you faced while you tried to raise money for the startup? Has it been difficult?

Ritu: I’m not just a woman in the world of entrepreneurship, I’m also a mother, with a little one at home to be taken care of. Additionally, I am past the usual startup age at 38 years. To be honest, none of the investors articulated these reasons to me as problems, per se. However, I do think it was definitely a major factor during the many investor conversations that I had, though mostly as an undercurrent. In the end, they trusted me, because of my personal experience and because I am the best person to run this company.

Naiyya: In the beginning, yes. Ive had 'angels' ask me when I was planning to have a baby and what I would do with the venture post having children. At an early stage in building the company, I have also had conversations with male customers and conversations on recruitment with men, who have refused to address their comments to me during the negotiations! All of this has since changed.

Kanika: None.

The Itch List, a fun service that let’s users put up bucket-list items, dreams, wishes and life plans, and helps them share their journeys with friends, is run by Smriti Modi, who dropped a career in Media to become an entrepreneur .

Smriti: To be honest, I haven’t faced any severe gender-specific obstacles or at least I didn’t notice. The investors I have reached out to have never really asked anything discriminatory as such.

Sexism and under-representation of women in tech or business, is rampant in Silicon Valley. How do Indian VCs compare? Do you think they aware of the problem?

Naiyya: I think there maybe sub-conscious biases vs. overt biases against women running and leading companies. Go to tech conferences and quiz an engineer on which entrepreneur/investor he/she looks up to or would 'follow'. The answer is invariably someone male. It’s not like women don’t exist in the ecosystem. The multiple 'manels', 'women entrepreneur vs. entrepreneur’ sessions, lack of senior female VCs are all factors that exacerbate this problem.

The only way to solve this problem is to explicitly call it out. To acknowledge that there is under-representation of women in funding and entrepreneurship is vital. It is also necessary to create role models out of women in entrepreneurship in order to demonstrate that this is a viable career a girl can aspire to pursue.

Kanika: I personally don’t believe it’s a problem. There’s just a lesser number of women out there starting businesses due to their own personal choices. I have personally never been in discriminatory situations. My investors are the backbone of my business and their support has been nothing short of tremendous.

Smriti: Yes, I think they are very aware. Sexism and gender stereotypes are pretty rampant but I believe, some investors do make a conscious effort to meet more women-led startups and eventually the business has to make sense and have a strong base.

Ritu: I’m sure they are aware of the problem but I don’t really think they care. As long as there is a strong existing base of entrepreneurs/ideas/ventures to back, there is no incentive to empower or encourage women.After all, the motivation of any venture fund is a strong return on investment. Unless there is compelling evidence to suggest that these strong returns are higher from women-led businesses, why would they bother to encourage them. And that is why this is a chicken and egg problem.

I have been in discussions with some Angel Investors very early in my fund-raise who offered me ridiculous terms for a very large stake in my business. But I have heard enough stories from my male founder-colleagues to realise that it wasn’t a woman-centric issue. As I said, this is not an articulated issue. It’s an under-current that is more sensed in some situations.

Not backing women-led businesses in India, may not all be due to gender discrimination, however subtle it may be. It might just be dependent on the viability of the business and its contribution to market profits. All entrepreneurs we interviewed agreed that the lack of existing role models, or the lack of an adequate amount of women in business, singularly ensuring high returns on investments, is a factor that adds to the problem of under-representation.

We tried to test our personal theory by suggesting to the entrepreneurs that having male co-founders might have helped their journeys. And were promptly proven wrong.

Was raising money easy because you had a male co-founder?

Kanika: I don’t think investors look for male or female --- they look for great people and invest in them. My co-founder came along much after I started the business. My investors decision to invest on us was definitely not based on this.

Naiyya: Not at all. My male co-founder actually had to leave the company due to personal reasons and the fundraising was done solely by me. Hence, it was not easy or tough because of him. It became easy once I had traction and once I found investors who believed in me and the platform we are building.

Through all the experiences you’ve had, any advice to aspiring entrepreneurs?

Kanika: The past year over all has been beyond excellent and extremely motivating but Forbes 30 under 30 was an all new high. It gave me much needed motivation to keep going. My advice to all entrepreneurs would be to stand up for yourself and stay motivated. Use every ‘No’ as a stepping stone to success and turn every ‘No’ into a ‘Yes’ through your journey.

Ritu: I would simply suggest that women approach any situation with a professional and dignified manner. And if they face discrimination, call it out immediately but again in a courteous, professional and no-nonsense manner.

I think how you handle yourself today in the startup ecosystem really determines how people will treat you. If you are hard-working, professional and focused on building a successful business without playing the gender card, I think you will find support from all quarters.

Naiyya: Don't take any form of discrimination, lying down. Speak up. Some of these maybe unconscious biases and if you dont call them out, no one will. You'd hardly plan to do business with someone who looks at you from the lens of your gender alone vs. the lens of your capability and potential to build something disruptive.

The problem that India faces as a hub of innovation is there are just not enough women choosing to step into entrepreneurship. In India, the absence of proper support systems for women, widespread cultural pre-conditioning, and unequal educational opportunities are all factors that lead to an imbalanced scale. It is striking to note that gender bias in the business scenario is subtle, rather than as evident or crippling as it is in the Valley.

The focus while raising Angel or VC investment will always remain on producing smart solutions to problems while building a profitable and sustainable company. Our interviewees’ experiences, and our own, is a nod to how India’s startup ecosystem is rapidly starting to back female entrepreneurs with profit-worthy investments. Their stories, though encouraging, are however, not an extensive representation of gender roles in the startup ecosystem. The numbers need to improve vastly and at a much brisker pace if the field is to be leveled. We’d love to hear your experiences with raising money as an entrepreneur, in the Comments section, to continue the dialogue.

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