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've had negative experiences with venture capital myself. When I founded Global Digital Women, I had trouble 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 a lot of 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 that. The first is that venture capitalists are 97 percent run by men 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's a lot of previously wasted potential there.
What do you mean?
That brings us to the second reason: when women start up companies, it's often about supposedly female ideas. People then talk about femtech, i.e. products by women for women. One example is ooia, a start-up that has begun to produce 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's long been important for companies to have diverse teams, diverse 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 women-owned startups yield lower returns in the long run. On the contrary, more than anything else, their companies make more profit out the back end.
You would like to have 100 million euros to invest in start-ups founded by women. How much do you have together?
I have already received a great many proactive enquiries, from family offices, from companies as well as from private individuals, and we are in contact with a great many people who understand the subject. But the "German Restraint" just does not exist only on paper, it is also lived.
What is the biggest hurdle you have to overcome with funders?
The issue of diversity still hasn't arrived in business for many. They see diversity as something to 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 think not everyone has understood that yet, even though we're already well on our way in 2021. Investors will be judged more on what they have invested in - and what the social implications are.
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 that they lack the money, and that's what we're bringing with the fund.
If you had already received money from venture capitalists when you were a young founder, you might never have had the idea to launch this fund. Looking back, would you have preferred venture capital?
At the time, I may have been right not to get venture capital. But I didn't grow up in a family myself that just gave me some play money. Everything is hard-earned and I realized: It is much more difficult to exist with equity, because you need much longer, you grow slower. I couldn't choose between equity and venture capital back then. 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.
About the person: Tijen Onaran is an entrepreneur, investor and best-selling author. She is the founder of Global Digital Women, an international diversity consulting firm. Manager Magazin recently named her one of the top 100 most influential women in German business and Capital business magazine named her one of the top 40 under 40 talents in business.
Female Founders Week 2021
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