How to strengthen women’s role in investment and entrepreneurship
Only 20% of entrepreneurs and 2% of investors in Spain’s ecosystem are women. Changing these numbers and achieving equality in entrepreneurship and investment was the goal of the We Invest Networking Event, held in Madrid as part of the South Summit. The speakers agreed that including women in the ecosystem is not only fair but also economically beneficial.
There is a direct correlation between the low number of female investors and the difficulties faced by women founders in securing funding. This was one of the conclusions of the We Invest Networking Event in Madrid, held as part of the South Summit innovation event.
The event, organized by We Invest—a community of women investors in Latin America across various sectors—and supported by BBVA Spark, brought together women entrepreneurs and investors to address the obstacles they face in both fields. The event featured several prominent women who create impact through their investments and projects: Verónica Ruiz, head of BBVA Spark in Spain; Patricia Pastor, from Next Tier Ventures; Paloma Castellano, from Wayra; Victoria Majadas, from BIGBAN Inversores Privados and Yolanda Tomás, from WA4STEAM.
In Spain, women represent only 20% of entrepreneurs, and just 6% of startups are founded by women, according to the ‘Entrepreneurship Map 2023’ by South Summit in collaboration with IE University. Verónica Ruiz, head of BBVA Spark in Spain, emphasized this issue: “Women are underrepresented as investors and entrepreneurs. Only one in five entrepreneurs are women, and many struggle extra hard to raise capital,” she explained.
Ruiz highlighted the direct link between increasing the number of women in active investment roles and the increase in funding for women-founded companies. “There is a strong correlation between investors and those who receive funding. More female investors will lead to more female entrepreneurs,” Ruiz noted.
Female-founded startups received only 1.8% of the investment in Europe, according to the ‘IDC European Women in VC’ report. Verónica Ruiz lamented these figures due to the missed opportunities they represent. She referenced a study by the European Investment Bank (EIB) showing that every euro invested in a female-founded company generates double the return compared to male-founded companies.
Including women in the entrepreneurial ecosystem
The gap between male and female entrepreneurs has decreased by 30% in the last ten years, according to the ‘GEM Special Report on Female Entrepreneurship’; however, progress remains slow. “Female entrepreneurship is gradually increasing, but it’s a small percentage each year. At this rate, without further action, it will take decades to achieve real equality in female entrepreneurship,” stated Paloma Castellano, director of Wayra Madrid, who expressed her motivation to drive more women into entrepreneurship.
Wayra is the Corporate Venture Capital of Telefónica, an investment vehicle that invests in early-stage companies capable of bringing innovation to the company. According to Castellano, there is a growing demand from capital to invest in companies with female participation.
“Among all challenges, integrating women into the entrepreneurial ecosystem is the hardest. It is a cause we champion, but it’s proving to be the most difficult,” stated Castellano. “We have scaleups, unicorns… yet we still see very low representation of women in decision-making roles. In corporate settings, there’s a bit more, but in investment funds, the figures are dire,” she explained.
“Companies should reflect society, and women should be represented equally in corporate boards,” said Victoria Majadas, founding partner of BIGBAN Inversores Privados. According to a Harvard Business Review study, diverse teams are 70% more likely to capture new markets with their projects, she noted.
BIGBAN, an investor association founded in Valencia 17 years ago, has a long history in the investment world. Majadas explained that investment often revolves around human relationships and there needs to be a ‘feeling’ between the investor and the company.
Venture capital, an inequitable field
According to We Invest data, only 2% of the industry is composed of women partners with decision-making power in investment vehicles. Yolanda Tomás, a representative of Women Angels for STEAM (WA4STEAM), called for efforts to increase the number of women in decision-making roles, believing it would lead to more funding for female entrepreneurs. WA4STEAM was founded in 2018 to increase the number of women in STEAM fields and female investors, as both areas are closely related.
“There are few female entrepreneurs, but the number of women in venture capital is even lower,” Tomás noted, adding that female investors often have different styles compared to men. “Perhaps we are more cautious, perhaps more receptive to different types of communication. Therefore, diversity is important,” she added.
Patricia Pastor, general partner of Next Tier Ventures and ambassador of We Invest, explained how We Invest was founded and why its founders saw the need to create an association of female investors. “We Invest emerged just before the pandemic when one of the founders, Marta Cruz, a general partner of NXTP Ventures, was denied entry to a WhatsApp group of male investors. She wanted to participate but was told ‘No, because we don’t just talk about investment here.‘”
Pastor, whose Next Tier Ventures firm, based in Miami and Valencia, invests in AI startups, recounted this anecdote to illustrate the need to “create our own group of women where we could discuss whatever we wanted.” This led to the creation of a women’s business club.
In summary, all the speakers agreed that the lack of equality in entrepreneurship and investment is not only a matter of social justice but also of economic performance, given the opportunities that having more women on both sides of the ecosystem would generate.
