This year has been a big one for startups in Newfoundland and Labrador, with big funding announcements and increasing national (and international) attention paid to the province’s growing tech sector.
Heading into 2020, a group of businesspeople, investors, and others in the field are working to make sure that women are able to fully participate and start businesses of their own by breaking down the financial and structural barriers that often prevent them from doing so.
“In the context of being an entrepreneur, so many women have great ideas but make choices — because of child care, because of elder care, because of risk, because of availability of capital, because of availability of mentorship — that we tend to lose really great business ideas and really great business leadership because of those choices,” said Cathy Bennett, CEO of the Bennett Group of Companies and a former provincial finance minister.
Bennett describes herself has having been an entrepreneur in some sense since the age of five.
“I always had an idea that if you can solve a customer’s problem, that’s a good thing,” she said.
Early this year, Bennett decided to apply that approach to a new situation: helping startups in Newfoundland and Labrador. After leaving politics in 2018 she approached the business world with fresh eyes, looking for ways to be of use and help create jobs. She learned more about what was happening in N.L.’s tech sector, which is now worth $1.5 billion annually, according to the Atlantic Provinces Economic Council.
“To me it was really exciting and I don’t know if I would have seen it as clearly if I hadn’t kind of stepped back and then reentered the business world,” she said.
‘Balm for my soul’
Bennett attended Creative Destruction Labs in Halifax last year, and said it was “a balm for my soul” to mentor the companies involved — and a look at the opportunities available here in this province. Now she is working on the Atlantic Women’s Venture Fund, which hopes to launch in spring 2020 and provide funding for 10-15 female-founder businesses, helping to fill the gap in venture funding that women often experience.
Only 15.2 per cent of partners at Canadian venture firms are women and funds led by female managing partners raised just 10 per cent of all the money invested in venture capital funds in 2018, according to a report from Female Funders.
It has been surprising to see how many women are reaching out and asking to be involved in the fund, Bennett said, including women who have never invested in tech or startups before.
The hope is to have a formal launch for the Atlantic Women’s Venture Fund next spring, she said. Right now the group is working with individual and institutional investors as well as with the provincial governments in the region.
“When we have 18 women who’ve never invested in any tech company or any new company coming to us and saying, ‘We want to invest,’ that’s a sign of new capital going into the ecosystem and that helps everybody,” Bennett said.
“We really think we’re going to unlock a stream of capital that hasn’t been deployed for this reason before, and that can only serve everybody better.”
When it comes to increasing female participation in startups, funding is an important piece of the puzzle — but not the only one. Mentorship and building networks is another important piece, and one where women also often find themselves at a disadvantage, Bennett said.
“The male networks are very strong and long established,” Bennett said. “Female support networks aren’t always as structured and aren’t always as strong.”
Bennett discussed the need for mentorship with Michelle Simms, executive director of the Genesis Centre at Memorial University. The result was a March event called Mentor Mash, which used a speed dating-like format to pair mentors with entrepreneurs, and a followup event in November called Femtor 2.0 that aimed to raise awareness of the province’s tech sector for young women in business and to increase the number of female founders and business leaders.
“The premise behind it was to bring experienced female business leaders together with new upcoming business leaders, particularly around the technology sector,” said Simms.
The events attracted more than 100 people and went well, Simms and Bennett both said. “Hopefully, that type of communication and shadowing will inspire even more women to become entrepreneurs,” Bennett said.
Holding events like Mentor Mash and Femtor help women build the networks they need to find new opportunities and access capital.
“We figured through this event, it would give us an opportunity to connect younger women with more seasoned and senior experienced business leaders that are female,” Simms said.
We need more women at the table.– Michelle Simms
“And by making those connections, it makes it a little bit easier for young female students, as an example, to see themselves in leadership positions and give them something to strive for and gives them an increased awareness of the opportunities that exist in this province.”
The good news is that the tech sector is diversifying, Simms said, both in terms of gender makeup and in other ways — even in the past three or four years, she said, the number of discussions about inclusion and diversity have increased. Genesis’s own Women in Tech peer group has grown from seven members to 140 in just five years, she said.
Established groups in the province are also continuing or expanding their own work to bring more women into startups. Groups like the Newfoundland and Labrador Organization of Women Entrepreneurs have long worked to help female business owners in the province, and the president of the Newfoundland and Labrador Association of Technology and Innovation has identified increasing female participation as key to addressing staffing issues in their associated sectors.
Diversity helps the bottom line
The focus on inclusion and diversity is also good for business, Simms said, especially considering the staffing crunch facing the province’s tech sector just as it is growing.
“We’re a small population and we need that 50 per cent of the population participating,” Simms said.
“We need more women at the table. Women bring different attributes, they bring different skill sets, and in order to grow a really successful company you need as diverse of a talent pool as you could possibly find.”
What’s happening in Newfoundland and Labrador is part of a wider trend, Bennet acknowledged, with research showing there’s a wider push to increase access to angel money and venture funding for women. There are a variety of ways that this is happening, from more traditional venture capital investments to organizations like ShEO, which provides interest-free loans to ventures led by women.
“I think you’re going to see more things like that, that will provide access to capital,” she said. The biases that prevent women from accessing capital at the same rates and amounts as men have to be combated because access to capital is essential for women’s success in business, she said, whether it’s to start a company, scale up its operations, or simply pay the founder a salary.
“That access to capital is a real barrier and while we are seeing a growth in Canada for women-owned businesses, the same historical biases around our networks are in place,” Bennett said.
“And what we’re trying to do, what I’m trying to do, is to help break down some of those barriers in networks or build up the relationships so they serve women even better.”
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