Soft-skills and university support foster female entrepreneurs

Successful start-ups aren’t always led by women with business degrees, says Oliver Prill 

November 10, 2019
Start-up office
Source: iStock

The competitive nature of venture capitalist funding can make it difficult for start-ups to stand out, and the educational background of the founder can play an important role in helping the business be seen as credible. At Tide, an online provider of business banking services, we were intrigued to find out which characteristics make female entrepreneurs most likely to succeed at the venture capital stage. 

So, we did some research. We looked at almost 7,000 female founders on the investor and funding database Crunchbase whose businesses had received more than $1 million (£779,000) in funding, to discover their paths to success. 

Surprisingly, we found that having a business degree is far from the only road to receiving impressive levels of funding.

Business degrees are popular, and they were among the most common degrees for female founders. However, when we looked at the overall funding that female founders received for their companies, women with an English degree received the highest average funding (£33.6 million), while women with a business degree sat outside the top 10, with average funding of £8.6 million. 

Humanities degrees can get a bad rap when we’re talking about entrepreneurship. The assumption is often that if you want to start your own business, opting for a business or economics degree will best equip you. However, our research reveals that humanities degrees can yield greater value because of their focus on soft skills.

These degrees teach students to think, critique and persuade, as well as to be creative and empathetic. It is increasingly important in an automated world that we teach students to be imaginative when they are finding solutions to problems.

We were also surprised to see that many successful female leaders had science degrees; biology and chemistry graduates had the second and third highest average funding, at £25.7 and £23.6 million respectively.

Looking further into this we discovered that a lot of the women with these degrees had start-ups in the healthcare sector. This industry has a high success rate, which could explain why these women have raised so much in funding and why science degrees earn a high ranking in our exercise.

Our research also looked into where successful female-led businesses operate. Unsurprisingly, we found that London is the UK city with the highest total funding of female-founded companies, £3.6 billion. However, when it comes to the highest percentage of female founders worldwide, London falls out of the top 10. 

Nottingham, on the other hand, ranks fifth globally for its percentage of female founders, with just over 20 per cent of all start-ups in the city being founded by women. Nottingham is an attractive city in many ways: there is a high start-up survival rate, it is one of the UK’s best-known university towns and it has a low cost of living.

Other top spots on the list are mainly dominated by cities in the US. Jersey City leads with 23.5 per cent of founders being female, followed by Ithaca in New York with 22.7 per cent. 

We also wanted to know where successful female entrepreneurs studied. Looking at UK universities, nearly a quarter of the female founders in our analysis graduated from the universities of Oxford and Cambridge. The establishment of the Oxford Foundry which supports young entrepreneurs through mentoring, workshops and its OXFO L.E. V8 accelerator might explain why it is producing more female founders.

Stanford University, which ranks top in our global ranking with 186 degrees given to women who secured $1 million in funding for their start-ups, also provides initiatives to make sure women have the support they need to start a business. Its Women’s Community Center provides space, support, and advice; hosts academic skills workshops; provides mentorship opportunities; and supports women in STEM.

Here are the top 20 universities that have given most degrees to female founders. 

Tide's Rank

University

Degrees given to Female Founders

1

Stanford University, US

186

2

Massachusetts Institute of Technology, US

120

3

Harvard University, US

105

4

University of California, Berkeley, US

104

5

University of Pennsylvania, US

70

6

Cornell University, US

66

7

New York University, US

65

8

Yale University, US

63

9

Columbia University, US

61

10

University of Cambridge, UK

46

11

Brown University, US

46

12

University of Oxford, UK

45

13

University of California, Los Angeles, US

43

14

Carnegie Mellon University, US

41

15

University of Southern California, US

41

16

Princeton University, US

40

17

University of Illinois at Urbana-Champaign, US

40

18

Northwestern University, US

37

19

University of California, San Diego, US

36

20

University of Michigan-Ann Arbor, US

36

But if we look at the universities with the highest proportion of female founders to total graduate founders, we can see that, although there are more opportunities for women, there is still work to be done.

The Fashion Institute of Technology in the US topped this leaderboard with women comprising 58.8 per cent of its graduate start-up founders; however, more than 80 per cent of its student base are women, which makes the number slightly less impressive.

Similarly, the University of the Arts London, which placed second in this table, has a student base that’s 75 per cent women, but only 38.9 per cent of its graduates that went on to found businesses were female.

There are many roads to success for female founders and a degree in business isn’t the only way forward. Although men are still in the lead when it comes to start-ups, women are getting closer and more opportunities are arising at different universities to give them the best circumstances to succeed. Moreover, mentoring programmes and professional networks will give women vital opportunities to learn from each other and get the confidence to start a new business.

Oliver Prill is CEO at Tide.

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