With the recently published Female Founders Monitor (FFM) it is once again time to take a look at a subject close to our hearts: the state of female founders in Germany. The report, published in June by the German Startups Association and Google for Startups, is THE key study on the importance of female-led startups in the German startup ecosystem, raising awareness of the conditions for female founders in the country. The report aims to identify current challenges and foster social change with the goal to promote the openness, diversity and competitiveness of the startup ecosystem in Germany.
Main findings of the Female Founders Monitor 2020
- The proportion of female founders in Germany barely increased from 15.1% (2019) to 15,7% in 2020.
- 16.7% of female-led startups are active in the sector of medicine and health care, making them key drivers of medical innovation in Germany. At the same time, women are poorly represented in the key startup sector of information and communication technology with only 8.8% of female teams classifying themselves in this field, compared with 36.3% of male teams.
- There is still a “gender bias” in funding and investment: only 42.3% of female-led teams stated that they have received external capital to date, whereas 56.7% of male-led teams did. While this doesn’t seem to be too concerning at first, it is alarming to learn that only 5.2% of female-led startups have received an investment of €1M or more, juxtaposed against 27.8% when it comes to male led teams.
- Startups with a female founding team have a less established network in key business areas, particularly in the investment sector and traditional economy, making it harder for them to get in contact with potential co-founders, relevant investors and potential customers.
- In comparison to their male colleagues, female founders are more strongly motivated by overriding goals and are therefore particularly active in the fields of green economy and social entrepreneurship.
Reading the signs, closing the gaps
The Female Founders Monitor teaches us once again that the startup ecosystem is still strongly dominated by men, particularly in the tech sector where you hardly ever find female-led companies (although there are some out there, check our previous article on 5 female startup founders in German High-Tech).
While their male colleagues are pretty much well positioned for growth, female founders struggle to find an entry into the world of external investors. For example, 33.1% of the female-led companies say they prefer business angels as investors, but only 7.7% have been able to get in contact with business angels so far – the situation is similar when it comes to venture capital. This finding highly correlates with the fact that in Germany 96% of venture capital companies are managed exclusively by men. Among the top three venture capitalists, there is only one woman at the top decision making level. Having a majority of money-holders being of one characteristic makes it less likely for them to be receptive to the ideas of the opposing gender. Especially, if the pitch falls under certain categories like female health. We shared insights on the male-dominated world of investors here.
Promoting female founders in Germany
If you ask us what the German startup ecosystem needs most, we can break it down to one thing: more women! With the rate of female founders barely crossing over 15%, the number of women practically didn’t increase, mirroring what we can see in the executive boards of big corporations in Germany: Women are immensely underrepresented. If we aim to keep our economy strong we have to prop up our activities centered around supporting female founders, build diverse teams, bring more into the VC world and support programs for female founders.
The High-Tech SeedLab is focused on promoting more women in tech by sourcing female founders in the high-tech and sustainability space. Our goal is to achieve 35% of female founders in our acceleration program for early-stage startups. During the 10 month support period, all participants receive a monthly stipend of €1,500, a premium membership at one of Berlin’s best coworking spaces, access to our extensive network of experts as well as tailor-made workshops.
Are you a women-only or mixed team that wants to turn an idea into a business and be part of a motivated group of like-minded entrepreneurs? Applications for the High-Tech SeedLab Batch 2021 open in October 2020. If you have questions about the program or your application, please contact firstname.lastname@example.org.
This program is financed by the European Social Fund (ESF), as well as the State of Berlin.