By Danielle Ofek
Before I was a banker, I was a founder. My journey over the last decade founding and leading startups has been a successful one, but it has also come with challenges, many of which are shared by other women founders and entrepreneurs.
The numbers begin to tell the story. In 2021, a record year for VC funding, companies founded solely by women received just 2.4% of the total capital invested in venture-backed startups in the US, according to Pitchbook. Based on data from Columbia Business School, since 2011, the percentage of VC investments in women-only teams has ranged from 1.8% to 2.7%, averaging roughly 2% year over year. For each dollar men raise in early-stage venture capital, women raise an average of $.38, Columbia says.
When it comes to VC funding and investing decisions, Columbia points out that women frequently are asked different questions from men. Male founders more often are asked “promotion” questions – that is, why they will succeed – while women founders are asked “prevention” questions – why they will not fail. For example, men are asked questions such as “How do you want to acquire customers?,” “How do you plan to monetize?,” “Do you think your target market is a growing one?,” and “What major milestones are you targeting for this year?” Questions for women are framed along the lines of “How many daily and monthly users do you have?,” “How long will it take you to break even?,” “Is it a defensible business – can others enter the space and take share?,” and “How predictable are your future cash flows?”
Yet in a 2018 study of more than 350 startups conducted by Mass Challenge and Boston Consulting Group, businesses founded by women yielded higher revenue—more than two times as much per dollar invested—than those founded by men. In addition to generating higher returns, female founders have proven to be more capital-efficient and performance driven, yielding multiple, positive bottom lines over time. According to BCG, if women and men participated equally as entrepreneurs, it would increase global GDP by $2.5 trillion to $5 trillion.
These numbers demonstrate indisputably that investing in women is a good business decision. Here is some advice based on my experiences that hopefully can help women entrepreneurs garner a bigger piece of the pie.
Be positive and act.
My way of life is to be positive and act, act, act, even when it seems difficult.
It is better not to overthink. You should continue to trust your instincts, be yourself, and never cease your efforts to make your dream come true.
Life is challenging enough, so if you want to succeed, you must be passionate about what you are doing. If you can encapsulate and communicate your passion and your inspiration, you can increase your chances of success — not just for yourself and your company, but for others as well.
Learn to be resilient.
Resilience is the capacity to bounce back from difficult events. If there is one group who needs that ability, it is entrepreneurs. Without resilience, failure seems like a point of no return. I decided long ago to be in love with the word “no.” Entrepreneurs hear “no” a lot, so I trained myself to think about it in a positive way. For me, each “no” I receive leads me to “yes.” Women entrepreneurs face unique challenges and obstacles, but we also have an unwavering spirit of resilience. We know how to overcome adversity and keep moving forward, no matter what obstacles come our way.
View challenges as opportunities.
When you face challenges, be creative and think – how can I flip this challenge to an opportunity? Changing our minds about something can be an extremely liberating act that expands our horizons. Looking at the same issue through a different lens has a way of opening up new doors of possibility. This shift can actually lead us to see things from a fresh and hopeful perspective. When we practice looking at life from different viewpoints, it becomes more natural to feel compassion for other people and for ourselves. With perspective, we can come closer to finding the lesson or opportunity for growth in just about any situation.
Build your network.
The traditional notion of the “old boys club” may be outdated, but there are still many channels in place that provide access and opportunity for men to partner and create deals. For women, networking constitutes more than getting someone’s contact information. Women are adept in creating strong relationships. It is important to persist and keep going ahead.
Women entrepreneurs are making a positive impact in the business world and beyond. By being role models, and through hard work, determination, and innovative thinking, women are paving the way for a brighter future for all of us. “Careers are a jungle gym, not a ladder,” Sheryl Sandberg said. As we navigate the zigs and zags of our companies and careers, I have found it beneficial to remember that we all have lessons to teach – and learn from – each other.
Danielle Ofek is First Vice President and Head of High Tech at BHI, the U.S. Branch of Bank Hapoalim, and the co-founder of Parliament51, a social impact venture aiming to achieve gender equality and equal opportunities for women in the workplace.Bank Hapoalim provides its clients access to a broad array of products and services available through its bank and non-bank affiliates. Not all products and services are provided by all affiliates or are available at all locations. All credit products are subject to credit approval. Nothing contained herein should be construed as a commitment to lend by BHI or any of its affiliates. The matters discussed herein express the personal views of Ms. Ofek and are not necessarily those of BHI or its affiliates.