Has the start-up ecosystem’s response to the COVID-19 pandemic had a positive impact on women?
The current Covid-19 pandemic stands as one of the greatest disruptors to our way of life in living memory. Although the release of all restrictions on our daily lives has recently been delayed here in the UK, the success of the vaccine rollout leads us to believe that the day might not be far off. So at this unique point in time, due to the work I have been involved with for the last 13 years at Astia with diverse teams in high growth sectors, I have to ask myself (and others) whether the start-up ecosystem’s response to the COVID-19 pandemic has had a positive impact on women.
The dramatic changes to lifes caused by the pandemic have created some silver linings. Silver they may be but, for women, I believe they are slim. Silver because flexible working and working from home has become the norm in many roles, enabling women to work more flexibly from home. The sudden move from in-person events, programs and networking to having to host these online has enabled more women to attend as they take less time and travel but also these have been able to include a more geographic diverse audience, not predominantly limited to those in the cities. Furthermore, as we find in times of recession and low employment rates more businesses are created – perhaps through necessity – but we saw more businesses started by women throughout 2020.
Those were the slim silver linings. However, the disruption and crisis due to the pandemic has harmed women. The negative effects on women broadly have been widely spoken about, researched and publicised. However, have we truly stopped and considered the implications of the fall in 2020 in venture capital being deployed into diverse teams?
The numbers were dismal and undefendable pre-2020, therefore it is quite something that the rate of venture capital invested into these diverse, outperforming companies could actually fall even lower. At a time where we are faced with a recovery out of a pandemic, it is even more critical that innovations are led by diverse teams. Let’s not forget the learnings from Professor Thomas W. Malone of MIT in Harvard Business Review that “if a group includes more women, its collective intelligence rises.” It is imperative that innovation in all its forms should include diversity of thought. Layer on the global economic impact of including women in the recovery. McKinsey research states “taking action now to advance gender equality could be valuable, adding $13 trillion to global GDP in 2030 compared with the gender-regressive scenario.”
The majority of innovation requires capital to fuel its fire. I have to focus on the crude data of funding when assessing whether the start-up ecoystem’s response to the pandemic has had a positive impact on women. During the course of the pandemic, there have been increased conversations about the importance of funding businesses with diverse leadership teams in terms of gender and race. However, we, as an ecosystem need to take more action and be intentional about actually deploying capital into these teams. These businesses do not need conversations, they need capital and the VC model needs to change to ensure that the inequity in VC funding for start-ups that include women exacerbated by the pandemic is reversed. Broaden your networks, take those meetings, ask yourself the difficult questions and write the cheques. At Astia we value women as leaders, only investing in teams that include at least one woman in a position of equity and influence. For 20 years we have worked to level the investment playing field for companies that include women. We have ample dealflow and we do not need to fix women. However, we, as the start-up ecosystem, need to finally change our ways and fund them and the companies they lead so the innovations they bring to market can have an impact on our collective recovery out of a pandemic.