When MENA investors don’t bank on women
For years, Lebanese entrepreneur Rayan Zahab would get called in for job interviews, only to hear hiring managers say the same thing: they were expecting to meet Mr Rayan.
After enough of these encounters in which prospective employers expressed disappointment in seeing an androgynously named woman candidate walk through the door, she put her gender on her CV then her photo: a young woman wearing a headscarf with a solid professional and academic background in computer programming.
Even though she got much fewer call-backs, she figured it would filter out the bigots.
One day, after deciding to launch a business training computer programmers for jobs, she was invited to an IT firm for a job interview, which she used to pitch for sponsorship.
The CEO decided to sit in on the session, and wasn’t impressed. Instead he shared with her some personal advice, as a father of three daughters. He said once she got married she’d abandon her business for her family, and suggested she look into other fields that required less “brainwork” than computer programming.
Getting used to rejection
What makes Zahab’s story unusual isn’t that she was denied support because of her gender, but that the reason for the rejection was articulated so clearly.
Mona Itani, a PhD candidate at the University of Leicester, is researching women technology entrepreneurs in Lebanon. She said almost all the women she had interviewed, around 20 so far, had self-funded their businesses. In many cases, they’ve done so after their pitches were rejected by VC firms or angel investors, inadvertently resulting in maintaining financial control of the company.
Itani said women entrepreneurs’ dreams and expectations tended to be more modest than those of their male counterparts, and they’re more often in business to contribute to society rather than become billionaires.
But even when they have managed to find creative solutions to fund their business growth, getting off the ground is still unusually challenging.
One woman Itani interviewed had to take out a high-interest personal loan because banks didn’t believe she wanted the money for her business. Another woman left the Middle East for California, after a room of VC investors – including a woman – mocked her business plan.
An anti-women sector?
In general in the world of startup funding, studies such as this one from the Female Founders Fund show that women have a much lower chance of securing investment than men, regardless of their experience or quality of their product or service.
At the heart of the problem was the fact that only a small minority of startup investors globally – at all levels – were women, said Loretta McCarthy, managing director of Golden Seeds, a New York-based investor consortium that invests in early-stage women-led businesses.
“The business ideas that women create are often created for women customers and male funders may not fully appreciate the potential. And of course there is the question of whether women, with family demands, will have the time and focus to devote to their businesses,” she said.
“We have found that women do figure out how to handle the many demands in their lives and often build cultures that are flexible.”
A good proposition
According to a study published in April by the online database CrunchBase, only 7 percent of partners at the world’s top venture firms are women, less than 12 percent of partner roles held at both accelerators and venture firms are held by women, and overall they hold 22 percent of roles at all levels of VC teams.
Despite a perception that women don’t make for good investments, the numbers say differently.
The 2016 BNP Paribas Global Entrepreneur Report found that globally women-led businesses have generally outperformed those run by men. The survey found that nearly 90 percent of women entrepreneurs expected their profits to at least remain stable over the next year. Of the women surveyed, 61 percent expected profits to rise, compared with an average of 58 percent among all entrepreneurs surveyed.
Ironically, the requirements of doing business creatively, frugally and with humility, as a result of necessity, could be part of the very reasons that women entrepreneurs generally outperform their male counterparts.
Making it work in MENA
In the Middle East, a region where, for example, banks in Saudi Arabia today and in Lebanon until 1994 required a husband’s permission for a woman to open a bank account, anecdotal evidence says women investors may not be as much of a rarity, but getting investment is still a struggle.
Elise Moussa has been developing her mobile payment app Snapay for the past three years, and launched last year, and has not secured investment yet for the company.
“When you’ve bootstrapped for three years, you don’t want to give away a lot of equity,” said Moussa. “It breaks my heart when I see how much equity people are willing to part with.”
Moussa said she endured blatant and subtle sexist comments from investors in both the US and Lebanon, and would like to see more women supporting one another, especially at the earliest stages from women angel investors.
Getting past the gender barrier
Yet Women Investing in Women Digital founder Anu Bhardwaj has found that women often do better than men once they get the opportunity to prove themselves.
“Women present differently. Men are better than pitching. It’s a different way of communicating. Women are more into explaining and convincing, men get more to the point,” author Bhardwaj told Wamda.
Is the solution then for women to act more like men? Moussa insists: “No, always be yourself.”
“The biggest source of validation should be your customers – not investors.”
Indeed, with their business savvy and their ability to surmount tough obstacles, it might be in everyone’s interest to give women entrepreneurs more of a chance.
“Women have some brilliant ideas. They put all of their time, effort and passion into them. They should have the opportunity to help improve their economy,” said Itani. “Discrimination against women is a good opportunity lost.”
Zahab, the computer programmer, agrees. As she continues to develop her company based in her hometown of Tripoli, with both high unemployment and highly skilled workers, she sees no other option but to persevere.
“I believe once we prove our success, it will open the doors for other women, and that will change the mentality,” she said. “Eventually they’ll have to deal with me, and they’ll change, and after that they’ll give opportunities to other girls.”