The growth of women-led businesses in India is stunted with venture capitalists apprehensive in backing female entrepreneurs, according to Smriti Irani, Minister of Women & Development and Minority Affairs, Government of India, as per a Moneycontrol report.
According to the union minister, the same investors are ready to take risks and are far more accepting towards men in similar positions failing.
“The bottleneck is those people who sit as VCs in financial institutions who don’t want to take the chance with women failing and are okay with men failing, even when the ratio of men failing is higher,” said Irani, at the Mumbai Tech Week on February 18.
This comes at a time when reports suggest that only 18 percent of about 30,000 active digital startups in India are female founders or co-founders.
“The problem is VCs who don’t fund women in technology and leadership positions and also those startups who just pick up a female face and not leave the financial control of the company with the woman,” added Irani.
The union minister also said that unlike the common perception, the only bottleneck for women-led businesses in technology has turned out to be the lack of venture capital-led funding available to them, while speaking to Ashwin Damera, co-founder and CEO of higher education unicorn Eruditus.
“Talent, resilience, innovation and ideas are not the bottlenecks,” she added.
In addition, the minister made a case for women founders’ managerial instincts and their ability in maintaining a fiscal discipline in their ventures.
“It’s now the startup ecosystem’s turn to push the money more,” she added.