In an article for AIN.UA, Elena Mazhuha, Investments Director at Flyer One Ventures, shares why in 2020 there is no place for stereotypes in venture capital investments and which two patronizing viewpoints about founders are getting less pervasive.
Elena works with startups from Ukraine, Belarus, Lithuania, and Latvia and digs deep into the issue daily. She has a unique view on what stereotypes founders of startups in Eastern Europe should deal with. There are day-to-day successful startups examples that stand against two entrenched stereotypes:
Stereotype №1: Startup Founding Is Not Women's Business In the business world, gender bias is noticeable. Business opinion leaders, conference speakers, and successful entrepreneurs are mainly male. A number of barriers stop women from becoming entrepreneurs. But this does not mean that women cannot be as successful. The number of startups with women among the founders is increasing. Kauffman Fellows Research Center (KFRC) analyzed 90,000 startups’ data. The graph below shows a gradual reduction in the gender inequality of the founders. The percentage of companies with women founders increased from 4% in 2001 to 21.6% in 2018:
In 2019, Crunchbase, a global database of companies and startups, showed statistics on the success of female co-founded startups. The number of such companies with an annual valuation of over a billion dollars increased 4 times from 2013 to 2019:
The share of venture deals with startups founded by mixed teams is growing too. According to DocSend statistics, in 2019 mixed teams attracted 10% more investment than single-gender ones:
Two out of six companies that received Flyer One Ventures funding in 2019-2020, were founded by mixed teams, too. The first is Mate Academy, a platform which received $580,000 in 2019. And the second is VOCHI video editing app, which received $1.5mn in 2020. Founders’ team diversity improves the quality of business decisions. When male and female founders combine different approaches, they avoid bias in decision-making. If a startup solves a painful problem, the gender of founders does not matter.
Stereotype №2: You Have To Be 30+ To Build The Next Unicorn
Founders in their twenties have all chances to face age and experience-based discrimination. The belief that young business people are immature has a negative impact on the way startups are perceived. In venture capital business, the youngest entrepreneurs say that often people 10-15 years older don’t even want to listen about their business, because they believe that a person in her twenties cannot build a successful startup. Age does not always determine the founder's experience, but talented team, market size, and product competitiveness always do. For example, two founders of the world-famous Belarusian selfie application MSQRD were 23 years old. Also, Stas Matvienko and Anna Polishchuk founded Allset at 23 and 24, respectively. And finally, the youngest founder in the Flyer One Ventures portfolio is also 23 years old. On the flip side of the venture process, gender and age-based discrimination appears too. The first touchpoint of founders and the Flyer One Ventures is a conversation with an Investments Manager or Investments Director. Sometimes people are surprised when they talk to a 22-year-old Elena, instead of a middle-aged C-suite-level man.
Real Factors Behind Startups’ Success
Venture business is not about gender or age, it's about strong personality, business knowledge, and analytical thinking. Successful projects and investment deals prove the veracity of this principle in all countries across Eastern Europe. All successful male and female founders, both from under 25 to over 50, do not use any age- or gender-specific business strategies. Their stories are almost similar: they have a strong interest in a particular field, related experience, out-of-the-box ideas, and strong self-motivation and discipline skills. So long as a startup has a talented founder, the right core team, and a strong business model, it’ll have a great opportunity to grow into real players.