The Aussie Government’s Latest Stuff Up Is Another Blow For Women In Business

Australia’s startup scene is severely underrepresented by women, with stereotypes, a lack of funding and investors’ limited confidence being just some of the challenges female entrepreneurs face when trying to start a business. 

To add to the list, the federal government’s grants program mixup last week was another blow for hundreds of women, who were incorrectly told they had successfully progressed to the next application round of the Boosting Female Founders program that offers between $25,000 and $480,000 for female-founded startups. 

Hours after receiving an initial email saying they were successful, these women were shocked to be notified in another email that this wasn’t actually the case. 

Yasmin Grigaliunas, who founded World's Biggest Garage Sale in 2017, said she was disappointed with the generic correction email she and other unsuccessful applicants received from the Industry department. 

“They had an opportunity to just do it very differently,” Grigaliunas told Refinery29 Australia. “I think that they did really have a great opportunity to stand up with empathy and a little bit of strong leadership, and just own the mistake. [With] the communication of the mistake, it felt too much like a copy/paste.” 

Christina Hobbs, co-founder of Verve Super, was successful in receiving $400,000 in the Boosting Female Founders scheme in 2020, and said it’s “really heartbreaking” that the government’s response provided “no acknowledgment of the hopes that the [first] email may have built up” for the women this year who were subsequently knocked back.

“To understand why this was so frustrating for the founders, you have to keep in mind that women would have spent upwards of 10 hours in preparing their applications. Some founders would have paid money to external grant writers to help,” she explained to Refinery29 Australia.

“The whole process of grant writing can be demoralising already. You put so much work into something with often a very small chance of being successful, you generally don't get feedback, and there is often limited transparency in how decisions are made. I think that a simple and thoughtful personalised email focused around an apology would have gone a long way to making amends.” 

In a statement provided to Refinery29 Australia, a spokesperson for the Department of Industry, Science, Energy and Resources confirmed all applicants for the program’s expression of interest stage had been incorrectly told they were successful. 

“Unsuccessful EOI applicants of round two of the Boosting Female Founders initiative were incorrectly notified that their application would proceed to stage two of the application process,” read the statement. 

“Applicants impacted were promptly advised they had been incorrectly notified. The department understands that this will have disappointed a large number of applicants and apologises to those affected. The department is reviewing its processes so this mistake is not repeated in the future.”

According to the Australian Bureau of Statistics’ Labour Force Data from July 2019, almost 35% of full-time business owners were women. Similarly, a 2017 study commissioned by ​​the ​​Wade Institute of Entrepreneurship found that 33% of companies in Australia were run by women, compared to 66% by men. Receiving funding to back a female-founded business is already tough in Australia, and it likely explains why there are so few of these startups in the first place.

When Grigaliunas turned her hobby into a business in 2017, she wasn’t aware of the significant discrepancy between funding received by male and female entrepreneurs.

“Four years ago, I didn't even know the stats,” she said, but it didn’t take long to understand it wasn’t a level playing field. “I thought, ‘I could put my husband on stage and raise more money’.”

Amanda Rose, the founder of Small Business Women Australia, agreed gender bias is often at play.

“Women often have to prove themselves 10 times more than a man would in the exact same scenario, which can be disheartening especially at the beginning of a small business journey,” she said.

Emma Koster is the founder of Hello Cass, a non-profit SMS chatbot that provides anonymous and accessible information for people affected by family and sexual violence. She’s faced what she describes as “the usual, boring tropes” in the startup world when asked, “How technical are you?” and “Did you actually write the code?”.

But she’s also observed that the landscape doesn’t take cultural and lifestyle factors into account. 

“There’s a lot of pressure in startup land to work stupid hours a be on the hustle 24/7. This is unsustainable and really not inclusive,” she said.

“Women creating businesses are often doing it at the same time as they are having babies and juggling raising kids, caring for other family members, or trying to have some other enjoyment in our one life on this planet. The startup scene is really good at talking the talk about work-life balance, but in reality, it’s a different story.” 

Koster said she also applied for the Boosting Female Founders program last year, and while unsuccessful in the final round, was awarded a mentoring series as a "runner-up". However, she was taken aback to learn her mentor was a man, especially considering the female focus of the grants program.

"The mentor I was allocated is a nice man, and there’s no doubt he has had a great career. But I work in the prevention of violence against women, and health care, and he comes from the food industry," she explained.

"His position was paid through the fund, and mine was not. To me, it seems counterintuitive to be using Boosting Female Founder funds to pay men to mentor."

Koster, Hobbs and Grigaliunas all believe the type of business you have can impact your chances of getting funding. 

“All of my work is in social impact, so finding the initial capital is hard. Just because an idea isn’t going to make someone a billionaire – or even a millionaire – doesn’t mean it shouldn’t exist, or is not worth investing in,” said Koster.

Hobbs said many investors don’t initially see the appeal in investing in businesses focused on creating social impact.

“The other issue I see is that the businesses that a lot of women are starting (including ours) tend to be the type that have a good chance of success and decent return, yet are not shooting for the stars in terms of trying to be a $1 billion dollar business within a few years,” she explained.

“There are of course women aiming to build those 'unicorn' style startups, but for many of us, we started our businesses because we can see a consumer need or we want to create social impact, and, although it may seem counterintuitive, a lot of early-stage investors would rather invest in a business that has a small chance of succeeding and being worth a billion dollars one day, rather than a business that has a really good chance of succeeding and generating a more modest return.

“To understand this mindset, you need to keep in mind that many VCs (venture capitalists) still invest with the attitude that nine out of every ten businesses they invest in will fail - but they'll more than make the return on the tenth business. The lesson here is to find an investor group that cares about your impact and is looking for the kind of investment you are offering - if there's no alignment, end the conversation fast and don't get demoralised. Better still, do your research before the meeting."

Being connected with investment experts and other female founders can be helpful when launching a startup, said Rose.

"I do believe women need to invest in the right advice and experts to help them with key items such as a business plan, tender writing and loan proposals (especially for VC investment)," she said.

"Don't feel you have to do this on your own. Be smart and invest in the right things at the beginning."

SheEO is an organisation that launched in Canada in 2015, and has gone on to expand in Australia, New Zealand, the US and the UK.

The network supports female entrepreneurs, bringing together women from all different backgrounds who are called 'Activators'. These women contribute to a Perpetual Fund that is loaned out at zero per cent interest to women-led ventures, selected by the Activators. 

Grigaliunas joined the SheEO network when she launched her business, eventually becoming an Activator and obtaining funding herself that helped her hire her first accounting team member.

"She's an amazing change agent for my company and I wouldn't have been able to be where we are without her, so I'm very grateful for the SheEO network for seeing that something had to be done."

While the government's Boosting Female Founders error was no doubt disheartening for many female founders, Rose said this incident will help elevate the voices and needs of women going into business.

"I do however believe this has provided a great platform for the media to give a voice to how many small business women are out there willing to take a risk in their business," she said. "They have confidence in themselves and are ambitious enough to want to succeed."

The department should see this as a great justification to review the amount of funding provided originally and increase it to represent the future of small business which is a female founded and lead small business.