How the recession is shaping up for women’s entrepreneurship
While women entrepreneurs still struggle to attract the attention of venture capitalists, initiatives to help women start-ups better equip themselves to deal with gender disparities do exist. The 2020 edition of the Cartier Women's Initiative, which is 100% digital this year, has helped the entrepreneurial community remain agile during the pandemic.
A powerful entrepreneurial community that connects women around the world, supports greater representation of women in leadership positions and that can act as a resource for the financing of start-ups created by women still seems to be a long way off. According to the study Gender Gap in Entrepreneurship 2019, by researchers at Columbia Business School and London Business School, women-led businesses are 63% less likely to obtain venture capital financing than those run by men.
Teaching business skills from an early age and following up on women's training throughout their careers in business are key. But the financing angle remains the most critical. In the study State of Female Entrepreneurship, published by VISA in February, 66% of women in the United States still report difficulties in accessing the financing they need to succeed.
And in the current economic environment, the recession triggered by the COVID-19 pandemic has made support networks all the more crucial. That’s where Cartier Women’s Initiative (CWI) comes in. It accepts thousands of applications from women around the world every year. Sylke Hoehnel , co-founder of Sun Bioscience in Switzerland and one of the finalists in the previous round of the CWI, has felt the impact of the crisis on her start-up. "Our Series A fundraising has been delayed. Most of our clients went on standby during the lockdown, and the shutdown caused sales to drop. Luckily we have long-term development projects that we were able to pursue during this period. The huge advantage of being part of a community of women entrepreneurs is that it allows us to share experiences that sometimes only women can identify with and it helps to position ourselves and gain confidence in a world that is still dominated by men."
Wingee Sampaio has been working to promote women's entrepreneurship for years. A member of the investment committee at Next Wave Ventures, a venture capital company that invests in social impact companies in their early stages, Sampaio is today at the head of the Cartier Women's Initiative. In an exclusive interview, she explains how the candidates have been coping with the pandemic and illustrates the flexibility required to face the current challenges and the extraordinary measures put in place to support them.
Since your appointment to the head of the organization a year ago, what have you accomplished and what are your ambitions?
I joined the Cartier Women's Initiative (CWI) in 2019. In its 14 years in operation, the organization has evolved from celebrating entrepreneurial initiatives by women around the world to implementing a very concrete program to support and monitor projects, including coaching and training. Four pillars now support these actions. One of them is the organization of the program in a different city every year: this activates the local ecosystem to support women's entrepreneurial action. The idea is to implement this approach on a global scale and reach out to different communities. This year, the annual event should have taken place in Boston, but it was cancelled due to the COVID-19 emergency. The second pillar concerns following up on the winners for about a year, to ensure that they have access to mentoring and training, and become part of an international network. The idea is to steer or redirect business models towards long-term financing patterns. And also to enable them to become drivers of social change.
What have been the top priorities you have focused on?
I am particularly fond of the Speaking & Inspire program. Instead of simply learning how to pitch an idea to an audience, we believe that it is important to learn how to inspire. In this sense we are lucky to have INSEAD as our partner; we share the same values concerning positive-impact business.
We are currently facing one of the worst economic crises in recent history. What are your concerns, particularly for the candidates of the 2020 edition of the CWI?
This situation is unprecedented. We have been working hard to understand the impact of this crisis on the business models of our candidates' startups. For some it was an opportunity, but for the majority, the priority was no longer how to grow, but how to survive. By working remotely through digital technology, we were able to invite the 500 members of the Cartier Women's Initiative community to participate in short online sessions to exchange ideas and quickly provide answers to the finalists. The first session brought together the Chinese candidates. We wanted to understand the impact of the COVID crisis on their business models and to be able to quickly draw lessons for the rest of the community. Entrepreneurial projects must remain attractive in times of crisis, even though the search for funds will prove increasingly complex in the coming weeks.
What were the lessons learned?
The key issues mainly concerned human resources and the most effective way to reorganize business activities. We exchanged best practices on how to lead a team whose members have been impacted by COVID-19 to very different extents. We needed to learn quickly how to lead in these contexts.
Has the crisis changed business models too?
Yes, many people have been reorienting their business to go digital. One project, for example, was the creation of a financial training company. That quickly turned into a purely digital project.
Your annual event has itself gone entirely digital this year. Was that the obvious choice for you?
Yes, it was. Our event was to be held in Boston. It was supposed to bring together candidates, winners, members of the jury and, more generally, all the women who have been part of our community for 14 years. These gatherings represent a unique opportunity to access a global network. The ceremony has now been moved online, where the winners will be announced on 16 June 2020. But we will invite them to participate in the 2021 edition in person.
This crisis may also represent a positive turning point. Could you give us some examples?
Many of the applications we receive concern the health, medical research or digital sectors. The crisis we are experiencing today clearly indicates that these sectors will be key in the future. In Brazil, one of our candidates is developing a medical teleconsulting startup. Until recently, she had been dealing with lots of red tape. But when the pandemic broke out, the government’s green light came on overnight and the administrative process was suddenly streamlined. The other trend that will likely make a difference is, of course, sustainability. The shift from globalization to relocation has already begun, but the startups that possess this local dimension will have a stronger impact.
What are the criteria for accessing the CWI program?
All the selected applications must show that the startup have at least one year of revenues based on a sustainable funding model, maybe having raised funds up to $2 million. And they must be prepared to adopt a more structured funding model. Through mentoring we help the winners find solutions to reconcile fundraising and management, thus enabling the implementation of a model that is sustainable over time, financially sound and profitable.
What are your goals for the future?
To expand the number of mentors in each region of the world, because the economic and social issues are not the same in China, Africa or the United States. And this is essential to better follow up on and maintain the contacts with the community of former and future candidates.
The Cartier Women Initiative, launched in 2006, is a program that supports women's entrepreneurship. It is one of the largest programs of its kind, awarding $1 million annually - the seven winners each receiving $100,000 and the 14 other finalists $30,000. The CWI also provides continuing education through INSEAD and one year of mentoring.
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