What’s the hustle about having more women in the startup ecosystem?

Victoria Faal

Victoria Faal

Victoria is a BSc International Business student at Saxion University of Applied Sciences and 2021-2022 Brand Director at DSIF. She is responsible for online/offline marketing and is one of the decision-makers when it comes to investing.

The business environment is changing. Aside from the pandemic, attitudes towards 'traditional' business practices are changing as well. In addition, there is evidence that women play an important role in shaping the business future. As it was International Women's Day last Tuesday, let's take a look back at what the hustle is about having more women in the startup ecosystem.

At present, approximately 700,000 women are registered as entrepreneurs with the Chamber of Commerce in the Netherlands. There are a lot of them, but it is still quite difficult to find investors for these companies. Research by Techleap shows that between 2008 and 2019, investors invested 95% of their money in companies with only men at the top. So much less money goes to companies where women are at the helm. In this blog, we discuss 5 scientific facts about why more women are needed in the startup ecosystem.

1. The company has higher income

Consultancy company BCG, together with Mass Challenge, conducted a survey at 350 companies. What seems? Companies founded by women have higher incomes than by men. More than twice the return per dollar invested. This study calculated that investors could have earned more than $85 million in extra dollars in five years if they had invested half of their investments in companies founded by women.

 

2. The company has a higher ROI

Research shows that tech companies run by women are much better with their money. When you invest in such a company you have a 35% higher ROI than when the company is led by men. ROI is an abbreviation for return on investment. This is the reward you get as a shareholder for investing in the company, just as you get interest at the bank as a reward for saving.

 

3. Shares are worth more

The MSCI World Index tracks stocks in companies. Companies in this index with a woman at the helm had an ROI of more than 10% per year, while companies without a woman at the helm had an ROI of 7% per year, according to their annual reporting.

 

4. More new ideas that catch on in the market

Scientific research shows that there is a strong connection between the diversity in management of companies and how they perform. For example, companies with a good mix of men, women and cultures on their boards have much more innovative products and services than companies where this is not the case. Nearly half of these companies’ revenue comes from the new things they invent. In companies with only men at the top, this is only 22%.

 

5. More loyal employees

Research firm Gallup found that in companies where the management team consists of both men and women, the staff is much less likely to leave. These companies have a loyal team of employees who continue to support them for years, which is a huge engine for the growth of the company.

 

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