Ghazal Alagh recalls her challenges while launching D2C brand Mamaearth in 2016. Since manufacturing was, and remains, largely a male-dominated industry, the 27-year-old faced resistance from a few vendors and suppliers she initially reached out to. Moreover, some venture capitalists (VC) also doubted her commitment to the brand since she was a new mother.
Meghna Agarwal, co-founder of managed office space provider IndiQube, too, has encountered her share of these gender-specific issues. As a serial entrepreneur, she is accustomed to walking into boardrooms to find herself as the lone woman there.
This underrepresentation of women in the VC and private equity (PE) ecosystem is just one of the many challenges women founders encounter in their fundraising journey. Kanika Mayar, partner at venture capital firm Vertex Ventures SEA and India, agrees that some institutions may display unconscious biases as investors or customers due to a lack of diversity within their teams.
However, as the tech and venture ecosystem become more inclusive and diverse, such biases are gradually diminishing, which should level the playing field for women founders.
A Nasscom survey conducted in collaboration with Zinnov, which was released in February 2023, found that 18 per cent of start-ups in India, and at least 36 unicorns and soonicorns, have at least one woman founder or co-founder. It added that women-led start-ups raised 17 per cent of investment deals between 2019 to 2022 in the country.
A Circle Of Trust
Alagh agrees that the challenges have eased with the evolution of the start-up ecosystem and the realisation that capability isn't gender specific. "People are welcoming more women at the table," she notes. In her bid to pay it forward, she is now part of communities mentoring aspiring women entrepreneurs, which can shine a guiding light for the future women in the workforce.
Such initiatives can help overcome the lack of exposure and access that many women face in the early stages of their entrepreneurial journey. They often have fewer opportunities to network and encounter fewer female role models, making it harder for them to access early-stage mentorship without working harder for it.
Mentorship and knowledge sharing by successful women can profoundly benefit aspiring women professionals, fostering an ecosystem that brings female leaders onto the centre stage. Moreover, it will break many ladies' taboos about asking for help and their reluctance to network.
"As leaders, we need to create a 'culture of mentorship' and have policies and programmes specifically designed for younger professionals where they are actively encouraged to seek support and guidance from whomever they choose," Agarwal suggested.
Sulbha Rai, chief people officer at RenewBuy, feels that the government needs to relook at the credit gap for women founders. According to a recent study, they receive only 27 per cent of credit, equivalent to bank deposits. Though considered to be disciplined money borrowers who maintain a good credit score of lending, borrowing and clearing off debts, the credit penetration for women is significantly low.
"The best way for the central government to enable women to run their businesses is to develop credit schemes that they can avail. In providing credit, public-private partnerships can take place, making the entire credit lending and borrowing process seamless," she adds, reducing their overreliance on VC and PE capital infusion.
The Government Steps In
These expectations have resonated with the administration, and the central and state governments have been rolling up their sleeves to give women power the boost it needs.
Last October, President Droupadi Murmu launched the 'herSTART' platform to encourage women entrepreneurship in India. Other initiatives the administration undertook include the Stree Shakti and Udyogini programmes, aimed at women entrepreneurs and partners in small-scale enterprises in rural areas. They attempt to offer a springboard to these ladies with loans at viable interest rates, necessary training and participation in industries, which can contribute towards growing the country's industrial and national productivity.
Even Silicon Valley giants are doing their bit to encourage women founders, including those who are from non-metro cities. The first cohort of 'Google For Start-ups Accelerator - India Women Founders' saw the participation of 20 women founders. Moreover, when Alphabet CEO Sundar Pichai visited India in December 2022, he announced a $75 million fund for investments in women-led start-ups, which sat on top of the tech major's accelerator program.
Amazon, too, has partnered with venture capital fund Lightspeed to launch the 'AccelerateHer 2023' early-stage accelerator programme, which will offer 20 women-led start-ups access to mentorship and fundraising opportunities from leaders across industries. Amitabh Nagpal, head of start-up ecosystem, AWS India, claimed that this sector-agnostic program is open for start-ups founded in India in the last five years with at least one female founder or co-founder and a minimum viable product.
In 2018, NITI Aayog launched the Women Entrepreneurship Platform (WEP). This unified access portal aims to unite women from across India to create an ecosystem that fuels their entrepreneurial ambitions.
These initiatives from the government are welcome, especially since India is the third largest start-up ecosystem globally, according to the Department for Promotion of Industry and Internal Trade (DPIIT), which noted that around three start-ups are born daily. Through initiatives like the Stree Shakti Yojana and Mahila Udyam Nidhi Yojana, the administration provides loans at concessionary rates to women entrepreneurs.
Miles To Go Before They Leap
The contemporary start-up ecosystem has become more welcoming and accepting of women entrepreneurs, thanks to the trust shown by the government and industry stakeholders. However, Upasna Dash, CEO and founder of Jajabor Brand Consultancy, feels that to consolidate these efforts and provide more comprehensive support, the government should collaborate with industry stakeholders to set up incubation centres that provide mentorship, infrastructure, and funding opportunities to women entrepreneurs.
Many educational institutions have established entrepreneurship cells and business incubators to support their students' start-up journeys. Similar programmes can be developed to encourage women entrepreneurs.
Mayar suggests, "We need to begin by educating women about the benefits and challenges of starting a business and showcasing successful women entrepreneurs as inspiration. This can start at educational institutions, supplemented with exposure to the programmes that offer incentives such as grants, short courses, or incubation opportunities to help women through the zero to one journey."
According to various industry reports, women constitute only about 14 per cent of total entrepreneurs in India and among the 106 unicorns in India, only 12 are women-led ventures. Most of the leaders at the helm of the VC, PE, and founder ecosystem, more often than not, emerge from India's Ivy league, i.e., IITs and IIMs.
Agarwal notes that the representation of women in these institutes, though on an improving trend, is still a long way from achieving gender neutrality. "The kind of peer group interaction available to men from these educational institutions and the founder ecosystem isn't available to women because the imbalance in representation is at multiple levels," she rued.
A Helping Hand
With the early-stage start-up ecosystem flourishing, many investors are seeking to work with partners who can help diversify the ecosystem further. Several VCs can contribute by generating innovative ideas to engage women entrepreneurs and empower them with the necessary training and guidance to compete effectively in the ecosystem.
Prerna Kalra, co-founder and CEO of Daalchini Technologies, points out that establishing women-specific business incubators in both metro and tier 2 and 3 cities can help provide women with access to the necessary resources and support they need to start and grow their businesses. These incubators could offer mentorship, networking opportunities, training programs, and access to funding.
"The government could establish funding programmes specifically aimed at supporting women entrepreneurs. This could include low-interest loans, grants, and other financial support programmes tailored to the unique needs and challenges women face in entrepreneurship," she adds.
The green shoots of success are already growing as the WEP was recently revamped to onboard around 2 lakh women entrepreneurs and help them build capacity through online and offline associations. Rai is excited that including services within it, like free credit ratings, apprenticeship, corporate partnerships incubation, and acceleration support, it will help women entrepreneurs in their end-to-end start-up growth journey.
Since the credit rating system is a vital challenge in running a business, especially for start-ups and small businesses, with free credit ratings, women entrepreneurs will have better knowledge of availing of loans with ease. An apprenticeship will also equip them with the necessary business knowledge, hands-on training, and skills to solve real-time issues.