From founding teams to investors, women are underrepresented in European startups and tech. And Web3 — a cluster of tech spanning virtual reality, blockchain and cryptocurrency — which at its best promises to democratise finance and create inclusive spaces, isn’t better; it’s actually worse.
Only 13% of Web3 founding teams include a woman according to a new report by BCG X, the tech build and design unit of Boston Consulting Group (BCG), and People of Crypto. Among founders, the gap is worse at 7%.
The report also found male-founded Web3 startups raise almost four times more capital than those founded by women — a bigger disparity than other startups.
But why is the gap so wide? And is there anything that can be done? Sifted sat down with the experts.
Where are all the Web3 women founders?
The report found a founding gap and a funding gap in Web3 companies across the globe — two statistics which Jessica Apotheker, BCG’s chief marketing officer, says are interlinked.
“If you’re a female entrepreneur, and you saw the stats and you saw that you’d get 4x less money if you were an entrepreneur in this space, would you go?” she says. “No, or you would go with a guy and probably put the guy forward in the pitch because if you’re putting yourself forward, you’re actually endangering your capacity to raise money.”
Simone Berry, cofounder of People of Crypto, a startup aiming to make Web3 more inclusive, adds that investment in companies founded by women is low because investors tend to be male. According to the report, only 15% of Web3 investing teams are women and 6 out of 10 of the main Web3-focussed funds don’t count any woman partner.
“At the end of the day, male investors tend to invest in people who look like them, resemble them, have similar backgrounds — it’s just a natural tendency, but can lead to a level of unconscious bias,” says Berry. “Additionally if it’s a company that’s more geared to solving problems within diverse communities or female communities, the male investors probably have less interest in it.”
Berry adds that while men are often judged on potential, women are scrutinised based on performance.
Women unfortunately aren’t taken as seriously in crypto, and research tells us that they also ask for less money when raising funding
“It's especially troubling in emerging fields like Web3 where there's a lot of risk involved,” she says. “Unfortunately, this may cause women to be more hesitant to take on these risks as they have less margin for error compared to men.”
On top of this — or because of this — women also ask for less money. And when founding teams with zero women raise big tickets, the gap gets wider.
“Men secure more funding for businesses, full stop,” says Lauren Ingram, founder of Women of Web3, a community helping get more women into the space. “Women unfortunately aren’t taken as seriously in crypto, and research tells us that they also ask for less money when raising funding.”
Mixed teams and metrics
The difference between women founders who join mixed teams as opposed to men who launch startups with women cofounders is also striking.
The report found that if you’re a woman founder, in 78% of cases, you’re in a mixed team setup — but when you’re a male founder it’s 74% where you’re not in a mixed setup. Apotheker says that to solve the funding gap, we have to track all-women teams.
We have a first-class opportunity to put pressure on the ecosystem early, when it’s conceiving itself
“All-male teams will find a woman because they understand that representation is important and then all of a sudden you’ll have all the funds out there saying look at that, we’re funding a lot of mixed teams and it’s fine, but that’s actually putting dust under the rug,” she says.
“Until we have metrics tracking women-only funding, the ecosystem will not be confronted with the reality of the gender founding gap, and therefore, cannot take the right level of action,” she continues. “We have a first-class opportunity to put pressure on the ecosystem early, when it’s conceiving itself.”
Crypto bros, not Web3 women?
Right now, Web3 investor Medy Ract says he finds it difficult to find women founders in Web3 — a puzzle to him because it’s a new technology.
“You would expect it to be like a blank canvas almost where everybody would be starting equal and everybody would be launching themselves into it,” he says. “That’s actually the opposite, and I wonder if that’s not because men jumped onto the crypto bandwagon when bitcoin came out first and that snowballed into the situation today.”
For Apotheker, the current situation doesn’t bode well for the future.
“If you take the gaming and immersive gaming industry as a proxy of what the metaverse could become, the experiences offered in the metaverse will be very gender stereotypical, just like the content of most games — and that will prevent women from adopting these platforms,” says Apotheker.
We need to create role models, we need to elevate and promote women, we need to make the working world better for working parents and we need to bring women together
Ingram says jargon is currently a big barrier, both technical terminology and slang, which is rife on male-dominated platforms such as Discord, and to some extent, Twitter.
“There is also a whole gamut of slang associated with Web3, such as ‘wen lambo’ meaning ‘when will this crypto or NFT explode in value so I can buy a Lamborghini’,” she says. “The nature of slang is that it excludes anyone who isn’t part of that in-crowd.”
The solution, Ingram says, is education — in spaces where women spend time.
“Breaking down terminology and explaining what we mean is something that will help truly democratise the internet, which is the supposed promise of Web3,” she says. “We need to be bringing everybody in and demystifying this burgeoning area of tech.”
An opportunity for change
But while Web3 being new has opened up the male monopolisation of the tech, Berry argues its infancy — and potential use cases — are an opportunity to reinvent how everyone interacts with the internet.
“This is not just the evolution of Web2, I think Web2 was very different because it was being built in a way that it was supposed to be consumer to technology,” she says. “Here we’re talking about a fundamental shift in how we transact, monetise and interact with technology as consumers.
If you take the gaming and immersive gaming industry as a proxy of what the metaverse could become, the experiences offered in the metaverse will be very gender stereotypical
Apotheker adds that brands — especially ones that are flocking towards tech that promises long, meaningful client engagement — have an opportunity to change up the default of white male avatars to appeal to more customers, be responsible from the beginning and break the virtuous cycle.
“The big brands out there, L’Oreal, Nike, all of them, they’re creating experiences in this space to try and engage with customers,” she says. “They have to push for inclusive experiences to attract inclusive customers so they’ll create that business opportunity and that traction which will, in turn, shift the ecosystem towards that — and there’s hope because some of them are already attempting to do this.”
For Ingram, change is about applying the same kind of inclusion principles that we see being implemented in wider business today, including derisking Web3 careers for women.
“We don’t need to reinvent the wheel. We need to create role models, we need to elevate and promote women, we need to make the working world better for working parents and we need to bring women together,” she says. “Crypto is famed for never sleeping, and the same is true of babies.”