Ways That Venture Capitalists Can Help Women Entrepreneurs More Effectively

The past year saw the Federal Reserve increase interest rates. The tech industry witnessed massive layoffs. Thus, investors are eager to know what 2024 will offer. Economists predict that earnings-per-share growth will rebound in the coming year. However, a real strategy is desired to support women entrepreneurs. Reports suggest that women established or co-founded companies generated 105 more cumulative revenue. Women established companies tend to provide unique solutions to the market. They face less competition due to lack of funding.

Eight ways Venture Capitalists can help women established startups

1. Provide equivalent valuations depending on true corporate value:

Company valuation is termed to be a crucial market signals. Research conducted from 2018 shows women established companies derived lower valuations when compared to men operated firms. Hence, as a limited partner or VC, you can provide unbiased and fair valuations. A different team can review the variation metrics by setting up and following clear guidance.

2. Champion women pitching:

Investors generally get to hear countless pitches. Make other decision-makers aware of gender differences arising in such pitches. Women, for example, might present more conservative pictures than men. Often different questions are asked to men and women as they pitch. Hence, when creating systems, decision making should be devoid of any bias. All pitch sessions should involve minimum three women. Make investments by determining the business and not the presenter.

3. Women should be part of the decision making team:

It helps champion women pitching. Diverse voices can help you understand and evaluate potential deals from different angles. It also enables them to provide their own examples. Take into consideration a niche market. Add those with adequate experience in the subject onto the decision team. It helps streamline the goods that are viable. Nothing major is required to be changed in due diligence process.

4. Explore innovative solutions:

Women generally deal in products or services to solve issues that they had experienced first-hand. Somebody’s financial problems faced might have led to the establishment of financial products and solutions. The objective is to help others face similar problems and provide appropriate solutions for them. It could have a positive social impact. As an investor, perhaps, you might not have experienced or seen such solutions before. Such businesses might present high ROI.

5. Encourage invested founders to be part of peer-to-peer networks:

Such networks motivate women to establish higher aspirations to succeed in their new venture. It helps them embrace, innovate and grow. Your task as a fund manager or an investor is to enable women to move in the correct direction. Prepare list of a couple of peer-to-peer groups that are relevant to your sector or industry. Connect entrepreneurs to those running such groups. It allows them to develop a strong social impact.

6. Enhance diversity on teams:

It is another important step taken to achieve gender parity. More diverse team enables enterprising female entrepreneurs to get opportunities that are inclusive of diverse perspectives and are more welcoming. A diverse team can help make better decisions. It also boosts industry innovation.

7. Female founders to be provided with more access to capital:

An effective way to enhance gender parity in this segment will be to provide female founders with easy access to capital. It is achieved by offering female-led companies with more funding opportunities. Access should also be provided to essential resources and networks to help secure venture capital.

8. Improved mentorship programs:

It is another way, Venture Capitalists can improve gender parity. Mentorship opportunities provided to female entrepreneurs will enable them to develop desired knowledge and skills. They can achieve success in their objectives and reach milestones.

Thus, implementing the above tips can help Women Entrepreneurs to achieve success.