"I want to give female founders the opportunity to access capital"

Female entrepreneur Tijen Onaran wants to raise money with a new VC fund specifically for female founders. She explains in an interview how this is going so far, why she thinks the fund is necessary and what it has to do with her own experience.

Ms. Onaran, you want to set up a venture capital fund specifically for female founders. Where did the idea come from?

The idea came about because I myself had negative experiences with venture capital. When I founded Global Digital Women, I had problems getting venture capital. I didn't have much of a network or access and ended up having to resort to equity. This is a problem that many women have, they reflected that to me in many, many conversations, and I think that contributes to the fact that only 15 percent of all startups are founded by women. I've made it my goal for 2021 to change that.

So the main reason, in your opinion, is that women lack networks.

That's certainly one reason; I see two others that build on it. The first is that venture capitalists are 97 percent male-led, and men fund men and men give money to men. They don't even do that, I don't think, on purpose. They're not saying, 'Oh, we're only investing in men because we think that's great.' But they're just surrounded by men, at events, on social media, in their networks. So it's easy to overlook women as founders, but also as a target group. But there is a lot of potential that has been wasted so far.

What do you mean?

That brings us to the second reason: When women found companies, it's often about supposedly female ideas. We then talk about femtech, i.e. products by women for women. One example is ooia, a start-up that has begun producing period underwear. When women present such ideas to a fund run by men, they don't understand the products or target group at all or underestimate them. New German would probably say: they lack awareness. At ooia, for example, Carsten Maschmeyer told the female founders that he couldn't do anything with it.

It's not charity to invest in women. It has long been important for companies to have diverse teams, diverse management boards, diverse supervisory boards.

Tijen Onaran, entrepreneur

Some say startups by female founders, precisely because they tend to be in the consumer space, make lower returns and scale more slowly. Others think that's a prejudice. Couldn't it also be because women get less venture capital?

Women often approach their startups differently, their plan is more sustainable. Their goal is usually not to sell in a year or two and make the big exit, but to get a healthy company off the ground and to budget soundly. That can run counter to the scaling model of many venture capital funds. But that doesn't mean that startups run by women yield lower returns in the long term. On the contrary: Above all, their companies make more profit at the end.

You would like to have 100 million euros to invest in startups founded by women. How much do you have together?

I have already received a lot of proactive inquiries, from family offices, from companies as well as from private individuals, and we are in contact with a lot of people who understand the topic. But the "German Restraint" doesn't just exist on paper, it is also lived.

What is the biggest hurdle you have to overcome with funders?

The topic of diversity has still not arrived in business life for many. They see diversity as something you should support and take a stand on. But it's not charity to invest in women. It's long been important for companies to have diverse teams, diverse boards, diverse supervisory boards. I don't think everyone has understood that yet, even though we're already well on our way in 2021. Investors will be judged more by what they have invested in - and what social implications that has.

Should you get the money together: What criteria would the startups you will invest in with the fund have to meet?

First of all, they have to be founded by women. Then sustainability will certainly play a role, that's obvious. We won't commit to individual sectors, the ideas are too diverse for that. However, I can also imagine supporting women in areas where there have been few female founders so far, for example in the tech sector - perhaps even with a stronger consumer focus. It's not as if women lack the know-how. It's the money that's lacking, and that's what we're bringing with the fund.

If you had already received money from venture capitalists when you were a young female founder, you might never have had the idea of setting up this fund. Looking back, would you have preferred venture capital?

At the time, it was perhaps right that I didn't get venture capital. But I myself didn't grow up in a family that simply gave me a bit of play money. Everything was hard-earned and I realized that it was much more difficult to survive with equity capital, because it takes much longer and you grow more slowly. At that time, I couldn't choose between equity and venture capital. I want to give female founders the opportunity to access capital. That's what this fund is supposed to do.

Thank you very much for the interview.

Personal details: Tijen Onaran is an entrepreneur, investor and bestselling author. She is the founder of Global Digital Women, an international consulting firm on diversity issues. Manager Magazin recently ranked her among the top 100 most influential women in German business, and Capital business magazine ranked her among the top 40 under 40 talents in business.

Female Founders Week 2021

This article is part of our special on female entrepreneurship in Germany.

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