March 8, 2021
Start-ups are a male domain. Still is. Yes, more and more female founders are becoming visible, but it's not getting any better. Only about 15 percent of start-ups in Germany are initiated by women. And it is not the case that a low figure is slowly rising here, but somewhat that it has been stagnating at a low level for years. The story goes even further because those start-ups founded by women are usually not in the same league as their male founder colleagues. Only about seven percent of female-founded start-ups employ more than 10 people. Furthermore, women receive less venture capital.
But why? Is the management of job and family still the major issue? Or do women shy away from risk after all? In my search for the reasons, I came across an article in the Handelsblatt last year that confirmed my suspicions. It's not that women have reservations about venture capital. It is simply because there are hardly any female investors in Germany who finance start-ups. The share of female partners in German venture capital companies is just four percent. And men invest mainly in start-ups that are founded or headed by men. Whether this happens consciously or unconsciously, something has to change here! Why? Because women are less likely to get investments, but when they do, they generate more revenue ( according) to a study by the Boston Consulting Group.
Since 2019, I have been Co-Managing Director and Chief Strategy Officer of the Munich-based Open Innovation Hub Wayra Germany. We invest in tech start-ups, primarily within our venture client model, where we connect our parent company, Telefónica, as a client for the start-ups. The goal is to initiate business with one of the very large telecommunications providers, independently of financial investments. Both always benefit from this: the start-ups, as they generate revenue and grow with the significant customer order, and Telefónica, as it can use the start-ups' innovative solutions for its problems on its own without entering into a long-term commitment. Diversity is part of the program at Wayra Germany: 50 percent of our team is female. Our Head of Marketing, Franziska Knoblich, is a woman. And I am a mother and a manager.
My most profound concern is to encourage young women to step into self-employment and start their own businesses. Women could often use a good deal more bravery, and I want to encourage them to jump in at the deep end, to seize opportunities. That's why I became a mentor with our partner Factory Berlin in the Stealth Mode Programme. In our portfolio at Wayra Germany, we also have start-ups led by women, such as Accu:rate with the great Angelika Kneidl or vCOACH with the equally great Stephanie Mayer. Despite all this, female founders are still the exception, even here.
We are now tackling that. For the first time, we have firmly anchored the topic of diversity in our strategy and agreed on hard KPIs for all employees. For example, every venture development manager must scout suitable female start-ups and include them in the program, i.e., start-ups led by women or that have at least one woman at C-level. We do this with conviction, but above all, from our own experience, female or at least mixed teams work more successfully and sustainably. We know, for example, that companies with a high level of gender diversity have a significantly higher probability of being more profitable than average. Studies also prove this impressively time and again.
I am convinced that we will have significantly more diversity in our portfolio by the end of the year. We explicitly call on female-founded or female-led start-ups to apply for our focus areas - from 5G, IoT, and AI to retail and HR solutions, cybersecurity, and fintech. You can find all the topics and info here. The goal remains the same, Telefónica should become a long-term customer of the start-up. Additional investments are always possible, and we will specifically push for them this year.
I am proud that we have formally taken this step with the whole team and that diversity is now written down in our strategy papers. How do you ensure more diversity?