Women entrepreneurs are met with scepticism

In April 2022, an amount running into double-digit millions of kroner ticked into the account of entrepreneur Marie Lommer Bagger’s start-up Measurelet. The start-up is located in DTU Science Park in Hørsholm, north of Copenhagen, which typically houses start-ups originating from research conducted at DTU that are working to become more established with capital from external investors. A number of investors—headed by the Danish Growth Fund—saw the advantages offered by Measurelet’s high-tech toilet, which measures how much fluid a patient excretes during a toilet visit. The toilet is currently being tested at Gentofte Hospital.

Prior to the investment from the Danish Growth Fund, Marie Lommer Bagger had been on a five-year journey through the start-up environment, where, as a woman, she experienced being met with suspicious questions and a lack of understanding that many women are driven more by values than quick gain when starting a business.

“I’ve attended meetings where the investors were rather condescending, and I’ve sometimes felt that there has been a lack of respect for the fact that I’m actually the one who has driven this project forward,” says Marie Lommer Bagger, who—in addition to being an entrepreneur—is a qualified nurse.

For example, she remembers being questioned at a competition about how many fluid accounts are prepared at a hospital.

“They just started asking questions about the need for my start-up, thereby challenging my expertise as a nurse. As a result, I had to spend all my time defending myself, instead of talking about the potential and the great time savings offered by the technology,” says Marie Lommer Bagger.

Good answers in pitch competitions

It is a well-known phenomenon that women entrepreneurs are met with prejudices and stereotyped views, says Mikkel Næsager, adviser at DTU Entrepreneurship. This has been highlighted in several international reports and in the Danish Diversity Commitment initiative, which, among other activities, works to increase the number of start-ups founded by women. DTU has joined the initiative and is addressing this issue in the DTU-owned investment firm PreSeed Ventures, which focuses on early entrepreneurial businesses.

In 2022, DTU has also put gender equality on the agenda at this autumn’s ‘Digital Tech Summit’, which is one of the Nordic region’s most important tech events organized by all eight universities in Denmark, and where the latest knowledge in digitalization and new digital technologies will be presented. Here, Mikkel Næsager gave a presentation and held a workshop—Unbiased—on the need to strengthen the framework for more women tech entrepreneurs and equip them to handle investors’ questions in pitch competitions.

Research conducted by the American start-up environment TechCrunch shows that women are typically asked questions about how they will handle everything that can go wrong, so-called ‘prevention questions’. Men, on the other hand, are asked ‘promotion questions’ about the potential of the idea, and this has a great influence on the investors’ interest.

The research documents that start-ups which are asked promotion questions raise 7.21 times more capital than start-ups which are asked prevention questions. And women in the investor environment are asked prevention questions in two out of three funding situations, resulting in fewer investments.

Teaching for students and investors

Mikkel Næsager teaches entrepreneurs and students how to answer prevention questions with promotion answers in several contexts. In addition, one day a week he coaches, among others, the students on DTU Entrepreneurship’s course for entrepreneurs X-Tech. DTU X-Tech is an accelerated learning programme that combines engineering, business, and marketing students with inventions, patents, and technological needs from industry partners and DTU research.

“Investors—both men and women—are going to ask these types of questions. It’s an unconscious bias, and not something they do intentionally. If we’re to have more variation in the types of businesses that are invested in, this requires women founders to get optimal insight into and training in how to present their start-ups, and investors to be aware that they should not fall into the trap where their brain says: it’s a woman sitting there, so I now need to ask a prevention question,” says Mikkel Næsager.

The latest report from the research firm International Data Coorporation, IDC, shows that, in 2021, European start-ups founded by women attracted only 1.5 per cent of the total investments, while start-ups founded by men received 89 per cent. In the first six months of 2022, the corresponding Danish figures for funding for businesses with exclusively women founders were only 0.1 per cent of the venture funding, according to the latest report from Unconventional Ventures 2022.

Greater diversity in types of start-ups

Mikkel Næsager sees great potential in promoting different types of projects in the start-up environment and believes that greater diversity in the projects is necessary if society is to meet future challenges.

“We’re looking into a market where the workforce in Europe is shrinking, fewer children are being born, and people are living longer. For these reasons alone, it’s important that we get women more involved, but we also urgently need the type of innovation and the businesses they more often have an eye for.”

Mikkel Næsager points out that there is a need for solutions to the current challenges of handling child care, elderly care, and nursing care with fewer employees.

“That innovation has to come from the start-up environment. It’s businesses like Measurelet that will free up time, and it’s businesses like Yuman that will move tasks from nurses to robots. And a joint feature of many of the health-tech companies that originate from DTU is that they have women among their founders. The best start-ups are often founded by people who have in-depth expertise in a given field. In fields such as nursing, pedagogy, and among other professional groups with the right solutions and the right understanding of the problems, these are often women. So we need to bring them into play and to make investors aware of them,” says Mikkel Næsager.

Special programmes for women

Mikkel Næsager believes that there is a need for research activities and a subject in the study programmes where the students learn what they can do to counteract and deal with differential treatment based on gender. In addition, he calls for programmes that specifically cater for female entrepreneurs.

At DTU, that could be a track on the X-Tech Entrepreneurship course exclusively for women entrepreneurs, or it could be innovation courses in DTU’s innovation hub, Skylab, where the University reserves the workshops for young women.

“There are talented women entrepreneurs who succeed in the programmes we have today. But the numbers show that we are not there yet. Targeted programmes will give even more women the best opportunities for getting started and succeeding with entrepreneurship. Today, the advice is often that you have to succeed on the men’s terms—and we simply must be able to do better,” says Mikkel Næsager.

He points out that there is also a need for greater insight into men and women having different approaches to building up a business. Women focus more on analysing risks and keeping track of things, and this is part of the reason why start-ups founded by women generate better returns on investments than start-ups founded by men. Figures from 2019 from the American non-profit organization Slush show that Nordic start-ups founded by women generate 45 per cent higher returns per invested Euro than their male counterparts.