Václav Muchna, CEO Y Soft Corporation, together with other relevant players, explains the roots of the problem and suggests solutions.
My Venture Capital Background
Václav Muchna co-founded Y Soft in 2000 in Brno, Czech Republic, with the vision of creating a global organization that operates without borders.
In his mid-teens, Václav started the path toward his professional career by exploring software development, network administration and learning the value of a customer-centric approach to business. During his early professional years, Václav and a small group of partners embarked on many projects ultimately finding success with what is today YSoft SafeQ.
Václav has led Y Soft’s international growth by establishing subsidiaries in Japan, Singapore, USA, Israel, Emirates and many more. Václav has also established Y Soft Ventures, the venture arm of Y Soft, providing promising startups in Central Europe the capital, resources and expertise needed to accelerate their path to global markets. While focused on growing the business and exceeding customer’s needs, Václav also invests in technology, people and cultivating an active company culture.
What I Believe Is The Root Of This Problem
There are several reasons.
1) Women are typically more responsible and accountable but also take fewer risks. While this may make them excellent managers and leaders it correlates with their lower appetite for risky capital raising.
2) Women often start businesses based on what they know or solving a problem they have in the home or family environment which may not scale to the liking of VCs.
3) Their business may be in areas that are off the radar of most VCs, such as fashion, restaurants, in other words, not tech related. Often, female founders start their businesses on their own savings and do not ask for VC funding.
Taken together, the result is that there is not a network of female founders who have successfully raised VC capital to mentor other females looking to do the same. Successful male founders are also more likely to become VCs themselves and invest in like-minded males thus making the cycle complete and closed to women.
What We Can Do To Solve This Problem
It begins with education and encouragement at a young age to expose females to all subjects and to encourage and empower them to take risks. While there is not an overnight solution, there are many things that any company can do:
Encourage and educate women in tech subjects. At Y Soft, we for example, support initiatives, that teaches females programming skills. Companies also need to see that it is working so sharing results is important.
Female employees bring fantastic diversity to typically men-dominated (tech) R&D — and companies that have tried it (like us) will quickly get appetite for more.
The other thing is about VCs… Their model fits typical the risk-hungry male stereotype. But because high risk is involved, they VCs also need high returns, i.e. high growth. VCs should realize that the typical woman stereotype might be different and work with it that way. (I mean when you try to sell typically women stuff (clothes, makeups, etc.) you also look at your target customer group and you try to make a good fit, so maybe VCs should do the same). Because women are naturally less risk-prone, a higher number of investments can turn into a success and therefore VCs would need lower growth rates. So how creating the first women-only VC fund that would have lower growth requirements? I think it is worth to try, because this equation may actually work.
29th March 2021