Munich Startup: Silvia, could you tell us what Encourage Ventures does exactly?
Silvia Hänig, Encourage Ventures: I’d be happy to. In general, Encourage Ventures, which is now the largest German network for female founding, is making sure that more diversity finds its way into the investor landscape. 96 percent of venture capital companies are managed by men, and large investments are also made mainly in startups run by men. An insignificant 1.6 percent of venture capital goes to female founders. We want to redress the balance. Encourage Ventures enriches groundbreaking ideas with expertise and, above all, capital.
Munich Startup: There are still far fewer female investors than male investors and the share of female founders in Germany is less than 18 percent according to the German Startup Monitor 2021. Do you see a relation between the two issues?
Silvia Hänig: Yes, I do think they are related. Many female startups have already pitched to male investors before joining Encourage Ventures. They’ve told us that they feel they are in much better hands here with their business model, because they pitch to women. Feeling like you’re understood better and the familiar atmosphere certainly play a major role.
Female founders less willing to take risks
Munich Startup: Based on your experience, would you say that women invest differently than men? If yes, in what way?
Silvia Hänig: An observation made during the financial crisis was that women invest more defensively and cautiously, and that turns out to be the cleverer approach. Because they were more successful with this investment strategy. But that’s something you can’t really generalize. What I’ve noticed, however, is that women invest more prudently and also ask quite astute critical questions before they get involved in a deal. Studies have shown that women in general are less willing to take risks as men. And that also clearly applies to investments.
Munich Startup: What technologies or industries are of particular interest to your group of female investors?
Silvia Hänig: There aren’t any preferences. Because Encourage Ventures is still under development, we welcome every investor who joins our network. We currently have over 500 female investors and a similar number of registered startups – with an upward trend.
Munich Startup: Do women found companies differently than men?
Silvia Hänig: It’s a fact that women found companies less often, but it’s also a fact that women found companies differently. Compared to all-male startups, women often have the more sustainable motives. For example, they want to improve corporate cultures, want to get mothers out of the part-time trap and back into management positions, want to make sure production methods are sustainable or want to revolutionize the German education system. Their underlying motives are much more ‘noble’ than all-male startups, which often focus on new platforms and technologies. What’s also striking is that women usually start businesses alone instead of in a team with other women.
Easy access to venture capital
Munich Startup: Balancing work and family life is an important issue for many women who want to start a business. On your opinion, what needs to change so women who already have children or want to start a family are not deterred from starting a business?
Silvia Hänig: The path to self-employment needs to be made more accessible, especially for mothers and also for young women who aren’t mothers yet but have a permanent position and are afraid to interrupt their careers. Encourage Ventures has developed a position paper that clearly demands a better startup ecosystem: especially in the growth and scaling phase, it’s important for women to have easy access to venture capital. Especially when a mother starts a business, she needs competent employees quickly. There should be programs that systematically support the staff costs for female startups.
Munich Startup: In your opinion, what are the advantages of diverse startup teams?
Silvia Hänig: Diverse startup teams obviously offer a broader range of perspectives. Age diversity is also very helpful, especially for founders. At Encourage Ventures, founders benefit greatly from the experienced mentors who work very closely with them, especially in the early stage, and give them valuable assistance in a wide range of business areas. From marketing to financial controlling.
Munich Startup: Do you think now is a good time to start a company?
Silvia Hänig: Even though the economic climate isn’t exactly at its best, that shouldn’t dampen the general motivation to start a company. For many companies that are now successful, difficult economic times were often what motivated them to concentrate on services and products that bring change. So with that in mind, the signs for the future bode well.
‘Closed circle mentality’ in Munich
Munich Startup: What do you think could still use some improvement in Munich as a startup location?
Silvia Hänig: While setting up the regional hub of Encourage Ventures, I’ve noticed a certain ‘closed circle mentality’ in Munich. Statements from many entrepreneurial organizations and initiatives – also from the Bavarian state government – give the impression that people are very much willing to network here. What quickly becomes clear, however, is that those who are new have to prove themselves first. This mentality is counterproductive for female startups, especially in the tech environment. An open and growth-based mindset would certainly work better.
Munich Startup: What founder would you like to meet in person some day? And what would you ask them?
Silvia Hänig: Because I’ve already met some brilliant investors in person, Warren Buffet comes to mind. I would like to ask him if he ever seriously messed up a deal.