Twenty years ago, Melanie Rupp was working in a branch office of a major Canadian bank when she noticed that most of her clients were men.
That’s when she had a “lightbulb moment” and decided to shift her career to supporting female entrepreneurs.
Now senior director of lending and advisory services at WeBC, a nonprofit that provides funding to women-owned and women-managed businesses, Rapp says things are improving and there are more women entrepreneurs than ever before.
But from the start, there is a big barrier: access to capital.
Rupp said when women go to traditional lenders like banks, credit unions and venture capitalists, they are often hindered by preconceived notions and unconscious biases.
“There’s this underlying notion that when women have children or care for their families, they don’t have enough time to run a business,” Rupp said.
“One person told me, ‘I walked in and they asked me, ‘Does your husband know what you’re doing?’
This didn’t happen 10 or 20 years ago, but within the past year, Rupp said.
“I still can’t believe that this kind of unconscious bias exists.”
Lack of funding is a big initial barrier for women-owned businesses.
Bridget Westerholz, vice-president of marketing at Spud.ca, says the Vancouver-based online grocery retailer wanted to promote local women-owned and women-run businesses in March in honor of International Women’s Day.
“we [these] “We want to shine a little bit of a spotlight on the product and try to garner support by getting consumers to know about it and get behind it,” Westerholz said.
But the company ran into a bit of a problem when it came to choosing products: It was hard to actually find companies to feature.
“There’s a lack of women-owned and operated businesses. [in] In the food industry in particular, but in general. [Only] “Eighteen per cent of Canadian businesses are owned by women,” she said.
“That’s a pretty shocking statistic to me,” she said.
After talking to several women who had started their own companies, Westerholz realized they often faced similar problems, and she came to the same realization as Rupp: The problems start right away with not having access to the same capital available to male entrepreneurs.
Challenges for women seeking funding are ‘daunting’
The Canadian Federation of Independent Business (CFIB) released a report in December stating that more than half of women business owners face challenges when it comes to obtaining credit, and when it comes to the success rate of loan applications, CFIB found that 22% of women are rejected outright, well above the 15% average for all businesses.
It’s a scenario that plays out over and over again.
Miki Talebi, founder and CEO of oomé, a Richmond-based manufacturer of smoked tofu products, says the consumer goods industry is a supportive, collaborative community, and there are more women in the industry than ever before.
But she worries that women are still at a disadvantage when it comes to accessing funding.
“We’re just starting to dip our toes into the fundraising world, and when you look at the statistics, it’s just mind-boggling,” she said.
Talebi said women-run startups are often evaluated differently than other businesses.
“I’ve been told time and time again to be prepared to answer questions that only women can answer, like how to balance growing a business with raising children,” she said.
“But the data shows that female startups tend to be more profitable in the long run.”
She worries that women are still at a disadvantage when it comes to accessing funding. (Image credit: oomé)
Rupp agrees.
“Women are low risk in our portfolio,” she said. “The default rate is less than 2 percent.”
“Do you ask a man that question?”
“When a female founder goes to market and raises money from investors, they’re going to ask her different questions than they would a male founder,” Rupp says.
For example, she says she has spoken to women who had raised equity from investors while pregnant.
“Investors would ask her, ‘When you have a baby, who’s going to run the business?'”
But how should these women respond?
First of all, you asked me that question. [so] “I have no interest in you being an investor in my company. And secondly, do you ask a man such a question?”
I asked how men can be successful and how women can avoid failure.
Rupp says there’s a bias towards asking men questions about business growth and women questions about risk mitigation.
She explains that men are asked, “What are you going to do to grow your business?” whereas women are asked, “How are you going to not fail?”
Lapp said women receive less than 3% of venture capital funding in Canada, so her organization works with women seeking this funding to teach them the best ways to do so.
WeBC has a new program that teaches women how to lead conversations with potential investors, helping them understand what to do and say, as well as what not to do and say, she says.
“When a woman is asked a question, [they] “There are some questions I can’t answer,” she says. “There are some questions that don’t lead to investment. In fact, they will lead you away from investing. So I don’t answer those questions.”
“We need to do more than this.”
Westerholz says he realised Spud had an opportunity to use its power as a brand and retailer to address the inequalities he had uncovered.
To achieve this, the company launched the #HerFairShare campaign, which aims to provide a platform for female entrepreneurs and their products. Spud invited struggling women-owned businesses to apply to be featured on the company’s virtual shelves.
She said the program has been very well-received, with 40 eligible businesses successfully applying in the first few months.
But the company decided that wasn’t enough.
“[The response was] “It’s great, but it was a little disheartening to know that there are 40 women sellers who can’t get their products in the stores,” she said. “So we thought, no, we have to try harder.”
So the company has set a goal that by the end of 2025, at least 25% of the products it sells will come from women-owned or -led businesses.
A diverse economy includes women’s participation
Rupp says a big issue for women entering the business is a lack of role models.
“It’s common for men to be business owners, and when you talk about entrepreneurs, people automatically think of male entrepreneurs,” she says. “Men have male networks, they have role models in their families, or they simply have people they see regularly.”
Challenging that perception is important, she says, and the good news is that women entrepreneurs are doing a good job of reaching out to one another for support.
“Today, when you go into a room full of women entrepreneurs — a ballroom full of women entrepreneurs — you see a lot of women entrepreneurs. When women go into that environment, now they have role models,” Rupp said. “Now they have peer mentors, they have other women entrepreneurs who are helping them.”
Rupp said WeBC is celebrating its 30th anniversary this year.
“It’s a little frustrating that after 30 years we’re still needed. Haven’t we solved these problems?” she said. “But no, we haven’t. So we’ll continue to provide our services and support women.”
Westerholz says #HerFairShare is Spud’s first female-focused initiative.
“I’m happy that we’ve been able to do this and I want to continue to do so,” she said. “It’s so important to have a diverse economy and an inclusive environment for women.”
And she has a message for investors looking to make a difference.
“Venture capitalists, if you’re listening, please fund women.”
