"In the last 7 years I have been mentoring entrepreneurs coming from different parts of the World, but mostly from Hungary. It striked me that despite all our efforts to attract women participants, female founder applications to our incubation programs were significantly lower compared to male applicants. Also, the number of female mentors active in our program were multiple times lower than males. Most of my program staff were female - it just happened that way - and I thought that it should in itself send the signal, that we are most welcoming to female founders. We also ran campaigns prominently displaying our - few - female founders, mentors, partners in the program. The response was amazing, yet, the ratio in the applications remained unchanged. Clearly, something more needs to be done. The reasons that hold women back from the entrepreneurial space are complex.These studies attempt to uncover some of the underlying issues, and our goal is to use this knowledge to create avenues for women in entrepreneurship." Andrea Kozma, director of CEU iLab.
The entrepreneurial scene is deeply gendered in Europe. The old continent has the lowest female involvement in early-stage entrepreneurial activity in the world (5.7%), and the lowest gender parity, according to the Global Entrepreneurship Monitor (GEM) 2020/21. Central and Eastern Europe does not constitute any exception: only a minority of startup founders are female (29% in Hungary; 26% in Poland, 30% in Slovakia, and 5% in the Czech Republic)1.
Also, from the fact that only 7% of all funding goes to startups with at least one female founder (Atomico 2018) in Europe, we must conclude that women entrepreneurs were deprived of 3bn € in 2020 alone, as this would have been the 15.5% of all funding that would be proportional to the number of women entrepreneurs. In the CEE region, all women founded companies received only 1% of the capital, while 5% went to mixed founding and 94% to all male teams2. At the same time, VC partners investing in the CEE region are predominantly men (93%), while women are heavily underrepresented counting for only 7%. Yet, women founded companies outperform by 96% compared to male founded companies when looking at the revenue to funding ratio.
However, on a global level, the state of play is changing. A World Bank report found that women entrepreneurs represent about one in three growth-oriented entrepreneurs active in the world today, and their numbers are growing.3 Female entrepreneurs have a huge potential in shaping the future: according to a recent report, women started 49% of new businesses in the US in 2021, up from 28% in 2019. However, regional growth differs greatly, and obstacles for women still remain.
Thus, the potential of female entrepreneurs is in huge imbalance compared to their ratio in the startup scene. For closing the gender gap, first there is a need to understand the problem in smaller, specific settings, for example, on country-level. Thus, the main aim of the present researches is to identify both the barriers to entry and the factors which facilitate success amongst female entrepreneurs in Hungary and Poland, also focusing on Ukrainian women startuppers who had to move to Poland recently.
Click the above links for the full reports.
