Now Loading

Trapped by Tradition, Gender Roles Stifle in Indian Entrepreneur Ecosystem

Female Founders Struggle

In traditional Indian society, men are often viewed as the natural leaders and providers, which extends into the corporate world where male dominance is prevalent. Many women are not trusted with senior positions and significant responsibilities. However, the recent WISER report challenges these outdated perceptions. It reveals that the percentage of women-led startups in India increased from 10% to 18% between 2017 and 2021. Additionally, the proportion of women-led unicorn startups grew from 8% in 2017 to 17% in 2022. These startups are also securing more funding, with women-led ventures receiving 20% of the total $21.9 billion invested in the startup ecosystem by 2022.

Despite these promising statistics, the reality for women entrepreneurs in India remains challenging. Cultural and social biases, limited access to finance, and other obstacles persist. Women hold only 5% of leadership positions in the Indian corporate sector, and the country ranks 57th out of 65 in the Mastercard Index of Women Entrepreneurs.

Women’s economic contribution to India’s GDP is 17%, far below the global average of 40%. A 2019 Reserve Bank of India survey highlighted that only 5.9% of startups were founded exclusively by women, while 55.5% had solely male founders. However, 38.6% had both male and female co-founders, showing some balance in gender representation.

Women entrepreneurs face several challenges, including limited resources, restricted freedom of movement, family responsibilities, and safety concerns. Many women-owned businesses are small, home-based, and informal, limiting their market reach and ability to secure substantial funding. Additionally, digital skills are often lacking due to limited access to education and technology.

In this regard, Siddharth Mala, Correspondent, ObserveNow Media engaged with female entrepreneurs to gather their perspectives on the subject.

Gender Biasness Hinders Female Entrepreneurial Success

Gender stereotypes also hinder women’s business pursuits, with societal expectations confining them to caregiving roles. Only 19% of working-age women in India are engaged in formal, paid employment. Balancing family duties with business is a constant struggle, and women often face difficulties in securing funding due to limited property rights and control over business decisions.

Commenting on the same Akanksha Sharma, Co- founder & CEO, CITTA stated “Gender disparity in funding for startups led by women prevails in the Indian startup ecosystem. This complex issue has stemmed from systemic gender bias and cultural norms both from potential clients and investors. Women entrepreneurs face challenges as they are often being undervalued, underestimated, and overlooked. Due to a number of factors like lack of representation in decision-making positions within venture capital firms, stereotypes about their leadership capabilities, and implicit bias, women founders encounter challenges in accessing funding. Additionally, it is saddening to see that investors perceive women-led startups as riskier investments.”

Gender Imbalance Continues to Plague Prestigious Educational Institutions

In the 1990s, the ratio of women candidates to men at IITs was almost 10 to 1, with 10 representing the number of men; it gradually became 4 to 1 in the 2000s.

After the introduction of supernumerary seats for women at IITs in 2018, most IIT campuses were able to meet the requirement of having 20% girls as mandated by the Ministry of Human Resource Development (MHRD). In 2018, almost 3,000 girls had confirmed admissions at the IITs, many more than the 995 women who applied in 2017. In the past five years, the IITs have not only maintained 20% of women candidates at campuses but also increased the number of women beyond 20% in many courses.

Shreya Sharma, Founder, Rest The Case underscored “Networking is crucial for securing funding, and indeed, men from institutions like IIT/IIM often benefit from robust alumni networks and connections that can facilitate funding opportunities. The underrepresentation of women in these institutions does limit their access to similar networks. However, I also believe that women are increasingly creating and leveraging their own networks, such as women-centric business groups and mentorship programs. While the traditional networks might be less accessible, the growth of alternative networks can provide significant support and opportunities for women entrepreneurs. It’s essential for the ecosystem to recognize and nurture these networks to bridge the gap.”

While Commenting on the same Jaya Bhura, Co-founder and Director, Chakraview Solutions added “Limited networks are a hurdle, but not the only one. We need to create inclusive investor ecosystems and empower women to build strong connections. Mentoring programs and angel investor groups focused on women founders can bridge the gap. My success with Chakraview shows alternative paths exist; focus on the strength of your idea and its potential impact.”

VC funding remains elusive for women-led startups

Venture Capital (VC) funding for women dropped to 9.3% in 2023 from 14.7% in 2021, with female founders in India securing less than 10% of the total funding for the year. This lagged behind Europe and the US, further exacerbating the gender-disparity gap, as highlighted in the 2023 annual report by WinPe.

Similar data by the World Bank-backed International Finance Corporation (IFC) showed that in emerging markets, only 11% of seed funding goes to startups with women on their founding teams, and the figures are even lower for late-stage funding–underscoring the stark gender gap.

“Women entrepreneurs encounter challenges in building connections and networking in this male-dominated venture capital industry. This has further limited their ability to secure funding and generate sales, further hindering the scalability and growth of women-led startups. Timely advice and support are critical for any startup to flourish. Efforts need to be made to address this disparity and promote gender diversity among investors. Targeted support and mentorship can help women entrepreneurs thrive and challenge unconscious biases that come their way” concluded Akansha.

Upcoming Conferences