While investors have equal expectations from both male and female founders, they may sometimes be sceptical of the latter’s ability to meet those expectations, says Ramya Venkataraman, Founder & CEO, Centre for Teacher Accreditation (CENTA).
“Overall, gender bias is common in our society, and female founders are equally susceptible to it. Especially with respect to female founders, I do see biases such as feeling that they may be less aggressive, less growth-oriented, etc. However, this can be addressed by both sides being educated better about communication style differences and learning to adapt more to each other’s style,” Venkataraman said in an interview for DealStreetAsia’s latest report titled Female Founders in India 2023.
On how the venture capital industry can work towards being more inclusive and supportive of female founders, Venkataraman said, “Some education on differences in communication styles and not assuming them to be more fundamental differences could help. Some of the recent programmes helping female founders build networks etc. may be useful. Beyond that, gender bias is a broader societal question, not specific to the VC world, and will get addressed only at that level.”
Bengaluru-based CENTA, a teacher accreditation platform, raised $1 million from angel investors such as Leo Puri, Pankaj Sahni, Bahram Vakil, and Nikhil Mohta last November.
Edited Excerpts from the interview:-
What led you to become an entrepreneur? How would you describe your entrepreneurship journey so far?
The main impetus was that I was trying to solve a problem. I found that the education system in India and most other emerging markets keeps telling teachers to improve themselves through training, technology, new pedagogy, etc., but never answers the question of “what is in it for teachers themselves?”, i.e., how can their career, financial rewards, recognition, etc. grow as a result of improving their practice — a question that is normal for any professional to ask. The lack of this answer was making many other efforts unsustainable.
My aim through CENTA has been to address this issue and make teaching an aspirational career with great competency-based rewards. On the other side, I have always had a latent interest in entrepreneurship (my granddad was apparently a serial small entrepreneur of a more traditional kind and they say I have inherited many of his traits!) and it all came together with CENTA.
What are some of the biggest challenges you’ve faced as a female founder? What challenges did you encounter while fundraising? How did you overcome them?
Frankly, I have not faced any specific challenges because of being a female founder. The pushes I got from investors were valid business-based pushes which helped us get our product market fit and scaling plan right. My experience on this front could also be because I already had a full 15-year career with McKinsey & Company prior to starting CENTA and had a strong network as well as experience in working with male colleagues, client leaders, male-dominated teams, etc.
Has the bias towards female founders improved in recent years? Have you seen a mindset change?
Overall, gender bias is common in our society, and female founders are equally susceptible to it. Especially with respect to female founders, I do see biases such as feeling that they may be less aggressive, less growth-oriented, etc. At the same time, there are many recent examples of highly successful female founders, and yes I do believe that will shift the narrative gradually. Further, like in other fields, women entrepreneurs end up having to build additional skills both to address such biases and manage things like having male reportees etc. — once one builds these skills, the biases also reduce at least at the individual level.
Do you think investors tend to have different expectations or standards for female founders versus male founders? Can you share any specific questions that are typically asked of female founders?
I believe the expectations are not different, but investors may sometimes wonder whether female founders will meet those expectations — as I mentioned earlier, investors wonder if female founders may be less aggressive or less growth-oriented and may also wonder if personal situations could play up more for female founders. Personally, I have not faced these kinds of questions… been very lucky to have super unbiased and objective investors, but these are things I have heard of.
What are some of the potential reasons for the gender gap in venture funding, and how do you think these can be addressed?
I feel there could be two reasons: (1) Male-dominated VCs feel that female founders may be less aggressive, simply because of a difference in communication style rather than actual aggression; this can be addressed by both sides being educated better about communication style differences and learning to adapt more to each other’s style; (2) Female founders in certain circles genuinely having less networks which play an important role in the success of a business; for this one, there is no easy answer but possibly many of the recent efforts on female founder cohorts, platforms, networking etc. can help.
“Male-dominated VCs feel that female founders may be less aggressive.”
In the current environment, when funding will be more difficult to secure for most startups, could female founders find it tougher to raise capital?
On the other hand, the current environment is particularly wary of mindless unprofitable growth. So maybe it will turn out to be an opportunity for female founders if the general bias of “less aggression” and “more focus on stability” can give investors the feeling that female founders will build more stable businesses!
How deeply has the funding winter affected your company’s fundraising and expansion plans?
In our particular case, currently, we are not facing any challenge on this front — first, with CENTA now being profitable, there is no urgency to raise capital which makes it easier; second, due to our exponential growth over the last 2-3 years, we are actually finding strong inbound investor interest even before we have started a fundraise.
What’s the fundraising outlook for 2024?
I have not kept enough track to have a very specific opinion on this beyond what we read publicly. No doubt there is a broader economic downturn, but I believe that solid businesses may even find it easier to get funding given that capital is available.
In your opinion, what are some of the most important factors that investors should consider when evaluating a startup, regardless of the founder’s gender?
According to me, the three most important factors should be: (1) fundamentally, is there a demand for the overall business model? I am not talking about specific product-market fit, because that will keep evolving (and depends a lot on the remaining factors), but does the broader model make sense? (2) do the founder and core team have the core skills of understanding business fundamentals, being agile as well as detail-oriented in execution and being able to build a team? (3) do the founder and core team have enough linkages to the ecosystem, either through a brand they have already started building or through prior work because that network effect can play a big role in the success of a business eventually.
How can we work to change the culture and mindset within the venture capital industry to be more inclusive and supportive of female founders?
As mentioned earlier, some education on differences in communication styles and not assuming them to be more fundamental differences could help. Some of the recent programmes helping female founders build networks, etc. may be useful. Beyond that, gender bias is a broader societal question, not specific to the VC world, and will be addressed only at that level.
What advice would you give other female entrepreneurs?
Don’t let anyone (including yourself) stereotype you as a “female entrepreneur”! You are an entrepreneur — that’s all that should matter to anyone you interact with. Don’t let gender even be in your mind during professional interactions and it will gradually go away from other people’s minds also.
