Bridging the Finance Gap for Women Entrepreneurs

16. France: Policy insights on women entrepreneurs in tech

Professor Severine Le Loarne-Lemaire
Grenoble École de Management

Background

Closing the gender gap in entrepreneurship has been a priority issue in France in recent years, notably in the science and technology sectors. Significant progress has been made in closing the gender gap ─ about 43% between 2018 and 2023 (Bpifrance, 2023[1]). Yet, women remain under-represented in entrepreneurship in France. In 2024, women represented only 33% of entrepreneurs and only 23% of business created were founded exclusively by women (infogreffe, 2024[2]). These gaps are greater in the science and technology sectors ─ less than 10% of start-ups created in 2021 were solely founded by women, while 16% were founded by mixed gender teams (BCG and SISTA, 2022[3]).

Gender differences in growth ambitions, sectors of operation and innovation rates are due to a variety of factors including gender stereotypes and cultural attitudes around women in entrepreneurship, differences in entrepreneurial motivations and ambitions as well as real and perceived skills gaps (OECD, 2023[4]). Negative gender stereotypes around women in entrepreneurship and women in tech remain prevalent in France, often starting at a young age. More than three-quarters of high-school students reported that tech careers were considered a masculine profession, among whom 33% stated that they believed women would face difficulties in finding their place within the sector (EPITECH and Ipsos, 2021[5]). There is also a noticeable gender gap in perceived skill levels among French high-school students. Only 43% of girls report that they believe they meet the requirements to attend a computer science or engineering school relative to 78% of boys (EPITECH and Ipsos, 2021[5]). While 56% of high-school girls report being interested in pursuing degrees in computer science and digital technology, only 37% plan to attend a computer science or engineering school compared to 66% of boys (EPITECH and Ipsos, 2021[5]). These negative social attitudes can discourage girls and women from pursuing careers in these fields. For example, only 24% of digital jobs in France are held by women and just a quarter of active engineers are women (Grande École du Numérique and République Française, 2024[6]). The small share of women active in these fields means there is a limited pipeline of women entrepreneurs, investors and mentors who can help to foster and promote entrepreneurship, notably in the tech sector, for the next generation of women entrepreneurs.

Women entrepreneurs tend to face greater barriers than men in accessing finance, particularly among growth-oriented women entrepreneurs, which can be due to gender biases in lending practices and investor preferences (OECD/European Commission, 2023[7]). While access to finance remains a challenge for all women entrepreneurs, it poses a particularly important barrier for high-growth oriented tech women. In 2021, women-founded tech start-ups received about 1% of total funds raised compared to 88% of men-founded start-ups (BCG and SISTA, 2022[3]). Moreover, when tech women entrepreneurs receive investments, they often receive smaller investments relative to those founded only by men. On average, tech start-ups with women-only founders received, on average, EUR 4 million compared to EUR 17 million by men-only founding teams in 2022 (SISTA, 2023[8]). The gender gap is even more significant as the size of the investment increases. For example, only two women-founded start-ups received more than EUR 50 million compared to 215 men-only teams in 2022 (SISTA, 2023[8]).

Policy issue: Financing women entrepreneurs in tech

The French Government has implemented many policies and programmes designed to address the gender gap in entrepreneurship and foster a more gender-inclusive pipeline of women entrepreneurs, including the plan Toutes et Tous Egaux (2023). The plan aims to foster more equality in entrepreneurship and the labour market more broadly. The Directorate General for Enterprises (DGE) within the Ministry of Economy, Finance and Industrial and Digital Sovereignty is responsible for following the implementation of the policy measures on women’s entrepreneurship in the plan, which include an annual barometer on women’s entrepreneurship, dedicated awareness raising campaigns, financial and non-financial support for women entrepreneurs, and actions to promote gender parity in the start-up ecosystem. Additionally, the Ministry for Gender Equality and Bpifrance (national public investment bank) have a master agreement to promote and improve women’s entrepreneurship support for the period 2021-24, particularly through increasing access to finance for women entrepreneurs. This agreement has been co-signed by BNP Paribas and Caisses d’Epargne (two private banks). The agreement also includes measures to address issues on the supply-side of the financial markets by addressing gender bias and stereotypes in lending institutions. Additionally, the Banque de France (Bank of France) has expanded entrepreneurship support for women entrepreneurs, notably the EducFi programme, in addition to measures related to developing banking and financial skills among women entrepreneurs. This includes resources and tools that are designed to develop women’s banking and financial skills as well as to prepare women entrepreneurs to pitch their entrepreneurial projects to investors.

A key actor in fostering high-growth oriented start-ups and bolstering tech entrepreneurship in the French entrepreneurial ecosystem is La French Tech, which was founded in 2013. La French Tech is a public entity attached to DGE that seeks to support the overall development of the French tech ecosystem, foster innovation among tech start-ups, and encourage inclusive growth. La French Tech ecosystem is co-ordinated at the national level by “La French Tech Mission”, which is responsible for supporting the overall structure and growth of the French start-up ecosystem domestically and internationally. This includes the implementation of entrepreneurship policies and programmes. National policies and programmes that support innovation and start-up development are adapted to the local context and delivered through a network of 114 “French Tech” labelled regional and local support structures (La French Tech, 2024[9]). This includes 17 Capitals which act as relays of the French Tech Mission in France, meaning they are responsible for developing the technological and digital ecosystem of their region as well as delivering support programmes developed by La French Tech Mission. The national and regional efforts are supported by French Tech communities ─ 31 Communities in France and 66 International Communities across 52 countries. These communities are supported by local ecosystem actors, including entrepreneurs, investors, innovators and other stakeholders in the tech and entrepreneurial ecosystems. They help to promote La French Tech in their area and support the implementation of programmes (e.g. start-up support, incubation and acceleration, support accessing financing) and actions organised through the Capitals. French Tech entrepreneurs also receive opportunities through partner organisations of La French Tech (e.g. French Digital Ecosystem, Bpifrance).

To bolster women’s entrepreneurship in the tech sector, La French Tech launched the Parity Pact in 2022 that outlined the following concrete actions to close the gender gap in entrepreneurship (SISTA, 2023[8]):

• Improve the representation of women on boards by achieving progressive targets – 20% of the board being women by 2025 and 40% by 2028;

• Develop and deliver gender diversity training for French Tech start-up managers to address gender discrimination and harassment;

• Ensure that 100% of job descriptions published by French Tech start-ups are gender neutral (i.e. intended for either women or men candidates);

• Establish a team of equal gender representation who will speak on behalf of the company both internally and externally; and

• Set up specific support for employees of start-ups returning from parental leave.

While the Parity Pact encourages gender parity in business practices and leadership positions among French Tech start-ups, it does not directly address wider gender disparities in the French entrepreneurial ecosystem or in access to finance. For example, less than 10% of French Tech start-ups are founded by women and only 18% of management positions of start-ups are held by women (SISTA, 2023[8]). La French Tech has significant capacity to support women tech entrepreneurs in starting and scaling their businesses. To address barriers to entrepreneurship for women, La French Tech could adapt its programming to include tailored and/or dedicated measures for women-led start-ups at the national level. One approach would be to include specific measures in the Parity Pact about investment towards women tech entrepreneurs. Another approach could be to adapt and expand existing programmes to be more gender inclusive. For example, the French Tech Rise programme aims to support entrepreneurs, particularly from under-represented regions to access start-up financing by gaining visibility among investors through tailored pitching events, but it does not target gender disparities in start-up funding. The programme could be expanded to include gender-specific initiatives, such as dedicated investment rounds or mentoring for women-led start-ups.

Conclusions

France’s tech entrepreneurial ecosystem has grown significantly over the last decade and has become one of the most innovative ecosystems globally due in large part to La French Tech. While public policies and programmes have helped start-ups from under-served regions in France, women remain significantly under-represented among start-up founders, particularly in access to venture capital and other high-growth funding opportunities.

Recent policy efforts to promote and support women’s entrepreneurship, including their ability to access funding, hold potential in addressing long-standing barriers in financing of women entrepreneurs through traditional lending institutions. However, these initiatives do not necessarily address the specific needs or barriers faced by high-growth women entrepreneurs, notably tech entrepreneurs. More targeted efforts would help to address the funding gap among high-growth, innovative entrepreneurs. Tailored policies and programmes could boost the participation of women entrepreneurs in existing support programmes and ensure women entrepreneurs have better access to capital and resources. This implies entrepreneurship policies and programmes that move beyond generalised support and take on a more explicit focus on supporting women. Relevant actions could include addressing negative gender stereotypes concerning women’s participation in STEM fields and entrepreneurship by showcasing diverse entrepreneurial role models (particularly high-growth and tech women entrepreneurs), dedicated outreach programmes, mentoring, networking opportunities and programmes that aim to address gender biases among teachers, trainers and lenders in banking institutions. More support could also be given to funding opportunities for high-growth women founders, particularly in the venture capital sector and monitoring and adapting key public policy initiatives for growth-oriented entrepreneurship to increase their support for women entrepreneurs.

References

[3] BCG and SISTA (2022), Startups françaises: les équipes mixtes grandes gagnantes des levées de fonds, 3 ème édition du baromètre SISTA x BCG sur les conditions d’accès au financement des femmes dirigeantes de startups, https://wearesista.com/wp-content/uploads/2022/10/SISTAxBCG-2022.pdf (accessed on 14 October 2024).

[1] Bpifrance (2023), IEF 2023, https://bpifrance-creation.fr/observatoire/etudes-thematiques/indice-entrepreneurial-francais/ief-2023?pk_vid=c48f257931581a091709920503569691. (accessed on 14 October 2024).

[5] EPITECH and Ipsos (2021), Observatoire sur la féminisation des métiers du numérique, Enquête d’opinion auprès de lycéens et parents d’élèves, https://www.ipsos.com/sites/default/files/ct/news/documents/2021-11/Dossier%20de%20presse%20_%20Ipsos%20Epitech.pdf (accessed on 14 October 2024).

[6] Grande École du Numérique and République Française (2024), Les chiffres clés sur les femmes et la tech, https://www.grandeecolenumerique.fr/le-numerique-et-les-femmes/les-chiffres-cles-sur-les-femmes-et-la-tech (accessed on 14 October 2024).

[2] infogreffe (2024), Les femmes et l’entrepreneuriat en France en 2023, infogreffe, https://stdmpifgfrcprodstrapifr.blob.core.windows.net/apollon-strapi-fr/example/8mars_2024_6_649fe74acf.pdf (accessed on 14 October 2024).

[9] La French Tech (2024), Labellisation 2023-2025 des Capitales et Communautés French Tech, https://lafrenchtech.gouv.fr/fr/labellisation-2023-2025-des-capitales-et-communautes-french-tech/ (accessed on 14 October 2024).

[4] OECD (2023), Joining Forces for Gender Equality: What is Holding us Back?, OECD Publishing, Paris, https://doi.org/10.1787/67d48024-en.

[7] OECD/European Commission (2023), The Missing Entrepreneurs 2023: Policies for Inclusive Entrepreneurship and Self-Employment, OECD Publishing, Paris, https://doi.org/10.1787/230efc78-en.

[8] SISTA (2023), Europe : pas de champion de la parité, Étude SISTA x BCG 2023, https://wearesista.com/wp-content/uploads/2023/06/SISTA_INFO_BCG2023_FR.pdf (accessed on 14 October 2024).