‘Does your husband know what you’re doing?’ Women entrepreneurs face bias at the bank

Two decades ago, Melanie Rupp was working in the main branch of a major Canadian bank when she had a realization: almost all the clients in her portfolio were male.

It was then she had what she calls her “a-ha moment” and decided to shift her career to supporting women entrepreneurs.

Now, as the senior director of loans and advisory services for WeBC — a non-profit organization that provides funding to women-owned, women-controlled businesses — Rupp says the situation has improved and there are more women entrepreneurs than ever before.

But there’s a high barrier right at the beginning — access to funding.

Rupp says that when women go to traditional lenders — like banks or credit unions — or venture capitalists (VCs), they often get stopped by the stereotypes and unconscious biases that enter the equation.

“There’s this sort of underlying belief that if women have children, or women are caregivers in their family, they don’t have enough time to run a business,” Rupp said.

“Someone told me, ‘I went in and they asked me, Does your husband know what you’re doing?'”

This wasn’t 10 or 20 years ago, Rupp says, this happened within the past year.

“It’s still unbelievable that this unconscious bias exists.”

Tall barrier for women-owned businesses looms at the beginning: a lack of funding

Bridget Westerholz, vice-president of marketing at Spud.ca, says her company — a Vancouver-based online grocery business — wanted to promote local women-owned and women-operated companies in March as a nod to International Women’s Day.

“We wanted to showcase [these] products to just give them a bit of a spotlight and have our consumers know and support them so that they could get traction,” said Westerholz.

But when the company went to choose the products, it ran into a bit of a problem: it was hard to actually find businesses to feature.

“There is a lack of female-owned-and-operated businesses, [in] the food industry in particular, but across the board. [Only] 18 per cent of businesses in Canada are owned by women,” she said.

“That’s a stat that I found quite shocking,” she said.

After speaking to several women who have worked to start businesses, Westerholz found they often shared similar issues. And she came to the same realization that Rupp did: the problems start right away, with not having access to the same funding available to male enterprises.

Challenges for women seeking financing are ‘daunting’

The Canadian Federation of Independent Business (CFIB) released a report in December that said more than half of women business owners report facing challenges when trying to get financing. And when it comes to success rates for financing applications, the CFIB says 22 per cent of women are rejected outright, compared with the average of 15 per cent for all businesses.

It’s a scenario that gets played out over and over again.

Miki Talebi is the founder and CEO of oomé, a Richmond-based manufacturer that makes a line of smoked tofu products. She says the consumer packaged goods space is a supportive and collaborative community, and that there are more women than ever in the industry.

But she says she is wary that women still remain at a disadvantage when it comes to financing.

“We are just starting to dip our toes into the world of raising capital, and the statistics are daunting,” she said.

Talebi says women-owned startups are often judged in a way that other businesses may not be.

“I’ve been told time and again to prepare to answer questions that only women would be faced with, such as how we balance growing a business and raising a family,” she said.

“And yet, the data shows that women startups tend to make more gains over the long term.”

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Rupp agrees.

“In our portfolio, women are low risk,” she said. “Our default rate is less than two per cent.”

‘Would you ask a guy that question?’

“If you have a female founder that goes out to the market to raise money from investors, they ask her different questions than they ask male founders,” Rupp said.

For example, she says she has spoken to women who have been raising equity from investors while they were pregnant.

“The investors will ask her, ‘Well, who’s going to run the business when you have your baby?'”

But how should these women respond?

“Well, number one, you asked me that question [so] I’m not interested in you being an investor in my company. And number two, would you ask a guy that question?”

Men asked how will they succeed, women asked how they aren’t going to fail

Rupp says there is a bias towards asking men questions related to business growth and asking women questions about risk mitigation.

She explains that while men are asked, “What do you plan to do to grow your business?,” women are asked, “How are you not going to fail?”

Rupp says women get less than three per cent of all VC money in Canada. To respond to this, Rupp says, her organization works with women seeking this financing and coaches them on the best way to do it.

She says WeBC has a new program to teach women how to lead the conversation with potential investors, which helps them understand what to do and say — and what not to do and say.

“We see that women, when they’re asked a question, [they] will answer the question,” she said. “Some questions do not lead to investment. In fact, they lead away from investment. And so you don’t answer that question.”

‘We need to do better than this’

Westerholz says she realized that Spud has an opportunity to use its power as a brand and as a retailer to try to address the inequities she had discovered.

To achieve this, the company started its #HerFairShare campaign, which aims to provide a platform for women entrepreneurs and their products. Spud invited women-owned businesses who were facing challenges to apply to be featured on the company’s virtual shelves.

It received a great response, she said, with 40 eligible businesses successfully applying in the first couple of months.

But then the company decided that wasn’t enough.

“[The response was] great to see but also disheartening a little bit to know that there are 40 female vendors out there who aren’t able to crack it onto the shelves,” she said. “And then we thought, no, we need to do better than this.”

So the company set a goal: by the end of 2025, at least 25 per cent of products they sell will be from women-owned or women-run businesses.

A diverse economy includes women at the table

Rupp says a big issue for women entering business is a lack of role models.

“It’s common for men to be business owners; the default is if you talk about an entrepreneur, people automatically think of a male entrepreneur,” she said. “They have the boys network, they have role models that may be in their family, or it can be just people that they see often.”

Challenging that image is key, she says, and the good news is that women entrepreneurs are successfully reaching out to each other for support.

“Today, you can go into a room full of women entrepreneurs, like I mean, a ballroom full of women entrepreneurs, and see so many and so when women get into that environment, now they have role models,” Rupp said. “Now they have peer mentors, they have other women entrepreneurs that can help them.”

Rupp says WeBC is celebrating its 30th anniversary this year.

“It’s a little bit frustrating that we are still needed 30 years later, like come on, haven’t we fixed these problems?” she said. “But no, we haven’t yet, so we continue to provide that service and support women.”

Westerholz says #HerFairShare is Spud’s first female-focused initiative.

“I’m glad we’ve done it, and I want to keep going on it,” she said. “It’s so important that we have a diverse economy and that includes women at the table.”

And she has a message for investors looking to make a difference.

“VCs, if you are listening: fund a woman.”