Munich Startup: Silvia, can you explain to us what Encourage Ventures does exactly?
Silvia Hänig, Encourage Ventures: Gladly, overall Encourage Ventures As Germany's largest network for female founders, Encourage Ventures is committed to ensuring greater diversity in the investor landscape. 96 percent of venture capital firms are led by men, and even large investments are primarily made in male-led startups. Only a tiny 1.6 percent of venture capital goes to female founders. We want to change this imbalance. Encourage Ventures enriches groundbreaking ideas with expertise and, above all, capital.
Munich Startup: There are still significantly fewer female investors than male investors, and the proportion of female founders in Germany is less than 18 percent, according to the German Startup Monitor 2021. Do you see a connection between the two aspects?
Silvia Hänig: Yes, I do see a connection here. Many female startups have already pitched to male investors before coming to Encourage Ventures. They say they feel much more comfortable with their business model here, because they're pitching to women. The feeling of being better understood and the familiar atmosphere certainly play a big role.
Female founders less willing to take risks
Munich Startup: Based on your experience, would you say that women invest differently than men? If so, how does this manifest itself?
Silvia Hänig: During the financial crisis, it was observed that women invested more defensively and cautiously, which subsequently proved to be wiser, as they were more successful with this investment strategy. However, this cannot really be generalized. Overall, however, I observe that women invest more cautiously and also ask very intelligent, critical questions before committing to a deal. Studies also show that women are generally less willing to take risks than men. This clearly also applies to investments.
Munich Startup: Which technologies or industries are of particular interest to your group of investors?
Silvia Hänig: There are no preferences. Since Encourage Ventures is still in its early stages, we welcome every investor who joins our network. We currently have over 500 investors and a similar number of registered startups, and the number is growing.
Munich Startup: Do women start businesses differently than men?
Silvia HänigThe fact is: women are founding fewer companies, but it's also a fact: women start businesses differently. Compared to purely male founders, women often have more sustainable motives. For example, they want to improve corporate cultures, they want to bring mothers out of the part-time trap and back into management positions, they care about sustainable production methods, or they want to revolutionize the German education system. Their motives are significantly more 'noble' than purely male founders, which often focus on new platforms and technologies. What's also striking is that women usually start businesses alone, rather than as part of a team with 'fellow students'.
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. In your opinion, what needs to change so that women who already have children or want to start a family aren't deterred from starting a business?
Silvia Hänig: The path to self-employment must be made easier, especially for mothers or young women who are not yet mothers but fear a career setback in permanent employment. To this end, Encourage Ventures has developed a specific position paper that clearly clarifies the need for a better startup ecosystem: especially during the growth and scaling phase, it is important that women 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 female startups with personnel costs.
Munich Startup: In your opinion, what advantages do diverse founding teams bring?
Silvia Hänig: Of course, diverse founding teams also bring a broader range of perspectives. Age diversity is also very helpful, especially for founders. At Encourage Ventures, the female founders benefit greatly from experienced mentors who closely accompany them, especially during the initial phase, and provide them with valuable support in a wide variety of business areas, from marketing to controlling.
Munich Startup: Does it seem like a good time to start a business?
Silvia Hänig: While the economic outlook isn't exactly rosy, that shouldn't dampen the general motivation to start a business. Economically challenging times have already prompted many successful companies to explore services and products that bring about change. Given this backdrop, the signs are good.
'Closed-circle mentality' in Munich
Munich Startup: In your opinion, what could be improved at the Munich startup location?
Silvia Hänig: In the course of my work setting up Encourage Ventures' regional hub, I noticed a certain 'closed-circle mentality' in Munich. Based on the statements of many entrepreneurial organizations and initiatives – including those from the Bavarian state government – one gets the impression that there's a strong desire to network here. However, it quickly becomes clear that anyone new to the group has to prove themselves first. This mentality is counterproductive for female startups, especially in the tech environment. An open and growth mindset would certainly work better.
Munich Startup: Which investor would you like to meet in person? And what would you ask them?
Silvia Hänig: Since I've met some brilliant investors in person, Warren Buffet comes to mind. I'd like to ask him which deal he's ever completely botched.
