Creating a Prosperous Future for Africa’s Female Entrepreneurs
November 19, 2019 marks the 5th anniversary of Women’s Entrepreneurship Day; one of many days that exists to highlight the importance of gender equity. While women have made strides in the movement for equality, we still have a long way to go. At Endeavor, we empower entrepreneurs by creating opportunities that provide them with access to capital, networks, markets and talent. As Linda Rottenberg (Co-founder & CEO, Endeavor) puts it, “Endeavor doesn’t create entrepreneurship; it already exists in every country. We enhance the conditions under which it can thrive.” Our mission to create a more equitable and prosperous future for everyone is embedded in everything we do; this includes supporting women and giving them the tools to compete globally.
There is an ongoing narrative that African women are some of the most entrepreneurial people. This data point is accurate, but we need to interrogate why. Even with high levels of entrepreneurship, African women only account for a small number of business and government leaders. While some reasons can be attributed to cultural norms and stereotypes, other reasons include the lack of access to opportunities and networks; and unconscious biases. The fact remains that African women are entrepreneurial, but the majority of female African entrepreneurs are running MSMEs and SMEs. As impressive as this is, we should also be aiming to nurture more African women to become high-impact entrepreneurs; in addition to getting them into boards, the C-suite, angel investing, venture capital, policymaking, and the list goes on.
At the executive committee level, African women hold 23% of positions, compared with a global average of 20%. At the CEO level, they hold 5% of positions, compared with 4% globally. At board level, African women hold 14% of seats compared with a global average of 13%. Women are still not in positions of power or decision-making. How then do we get women into these decision-making positions? In order to get there, women have to be given the opportunities, and therein lies the problem: the pipeline that funnels women through the corporate system is broken and decision-making teams tend to be homogenous. Studies tell us that homogeneity has a negative effect on decision-making and homogeneous personal networks can also have a detrimental effect on organizational diversity. When it comes to being promoted, women face organisational hurdles and discrepancies in terms of what women believe hinders them from reaching senior leadership positions versus what organisations believe hinders women. For example, organisations often cite “double burden syndrome” as the biggest barrier for women in the workplace, but women say attitudes in the workplace create the biggest barriers.
Additionally, there is a direct correlation with access to capital, high-growth companies, and gender diversity in an organization. Since 2015, African startups have raised over $1 billion, yet women-led or co-founded companies only comprise single-digit percentages of that amount. Research also shows that as companies scaleup, female CEOs are less likely to be found. There is certainly truth to this, as we also see the effects in our Endeavor network — where women make up only 17% of senior leadership positions at Endeavor companies.
When it comes to accessing capital, research shows that investors judge women and multicultural entrepreneurs by different standards. Investors report being less likely to connect to the sectors that female and multicultural entrepreneurs serve. At a recent event in Lagos, Maurizio Caio (Founder & Managing Partner, TLcom Capital) reminded guests that, “venture capital is not only about finance. It is about business-building…look for people who can go on a journey with you”. Raising capital can be an arduous journey and it is vital that when approaching venture capital firms women focus on having investors who are in their corner. For Eloho (Omame) Gihan-Mbelu (Managing Director & CEO, Endeavor Nigeria), ultimately the onus is on the investment community, “I don’t believe that because there are fewer women entrepreneurs globally, that the quality of those founders is less. As investors, the most effective thing we can do is be more deliberate about our biases and the problem we want to solve”.
Beyond providing access to capital, there are a number of ways to support female entrepreneurs in their journey. This includes ensuring that women are included in mentorship and sponsorship processes. In a study conducted by McKinsey, women in senior management positions said one of the major factors behind their success was access to mentors, sponsors and peer networks. Elizabeth Rossiello (CEO, AZA - formerly BitPesa & Endeavor Entrepreneur) said that as a female entrepreneur working in Africa, the Endeavor network has been useful because of the support it provides — “from the board search, to raising funds, to hiring and connecting with other entrepreneurs”. Women need this kind of support — access to a diverse group of mentors and sponsors inside and outside their organisation and businesses — as a forum for honesty, feedback, and self-reflection.
The good news is that women are surpassing men in tertiary education and catching up as STEM graduates, so the talent pool of future founders and senior leadership is widening, but it will take years for us to see the change reflected at the top. A vital question is what happens when these women join the job market? We must acknowledge that it is less about demanding that women participate in male-dominated industries or that women perfect their sales pitch, and instead it is about advocating for women when they join our organisations and start their own companies. In the words of Funke Opeke (Founder & CEO, MainOne), “stay true to your dream as female entrepreneurs and reshape the African continent.”
Happy Women’s Entrepreneurship Day!