#Asia Why Indian startups need more women finance leaders and VCs

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A study says there are only 39 women among 500 founders; none of the startups have an externally-hired women CEO

 

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Today is International Women’s Day. From startups to big corporates, everyone is leaving no stones unturned to celebrate the power of “womanhood”. Yet, behind this pomp and grandeur of “gender parity” rhetoric lurks a crude reality — the abysmal presence of women across leadership teams in the Indian startup ecosystem, especially in the finance and technology domains.

The Economic Times published a study on 187 Indian startups today. The study found that there are only 39 women (8 per cent) among 500 founders; none of the startups have an externally hired women CEO. All the women CEOs are in fact co-founders while there are only 2 per cent women COOs. More important, only 7 per cent women are leading finance divisions; only 11 per cent are leading tech divisions.

How’s the health of the Indian startup ecosystem? I summarise it in a few words from my past writings: Most companies are on ventilators with no visible signs of recovery. Their survival is dependent on their ability to outlive the cash haemorrhaging. The valuation game seems like a Ponzi. For VCs, the cost of doing nothing could be even higher. First there were the Innovators, then came the imitators and now it’s turn of the Idiots to dominate the scene.

The gross mismanagement of cash flows may be attributed to the lack of women finance managers as well as VCs. Simply because, understanding women and valuation fundamentals are equally difficult for men; they often get it wrong. E-x-o-t-i-c (coincidentally, remove the “e”, the remaining letters form the word “toxic”) financials turn toxic in a jiffy, pushing the ecosystem on the brink of collapse and threatening to send the broader economy into a tailspin.

Too much emphasis on price (face value?) is considered to be one of the biggest investment mistakes; men generally fall for beauty, somewhat ignoring the dangerous and treacherous turns that lie ahead. Women, on the other hand, have long-term considerations while entering into an alliance. External beauty is important, but not the important factor for women.

Women will never acquire a “hot” asset without research, according to a survey conducted by Merrill Lynch investment managers in 2005. And that’s why when the romance fizzles out over time, men are often found complaining about their past mistakes, unaware of the exit route. Due diligence, prudent choice and patience are key to success in any relationships; they are key to successful investments and ventures as well.

The man “alter ego” has a similar adverse effect on business decisions like it has on human relationships. Women know what they don’t know and aren’t afraid of seeking help. Women seek direction when they are lost, men continue driving! And wrong turns are mostly fatal, aren’t they?

On this International Women’s Day, let’s not turn the issue of gender parity to a mere lip service. Let’s make a real difference, not by “managing” gender diversity, but by appreciating it.

As Belafonte sang: The women of today/Smarter than the men in every way.

The views expressed here are of the author’s, and e27 may not necessarily subscribe to them.e27invites members from Asia’s tech industry and startup community to share their honest opinions and expert knowledge with our readers. If you are interested in sharing your point of view, please send us an email at sainul[at]e27[dot]co.

 

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