Women social entrepreneurs in Spain have a harder time obtaining financing than their male counterparts. This was the main conclusion of the report “Investment with a focus on gender: an opportunity for the European social enterprise ecosystem’, prepared by the ESADE Institute for Social Innovation in collaboration with the EY Foundation and presented at the ESADE Madrid campus. The study, for which one hundred Spanish social entrepreneurs were interviewed, amongst others, found that barely 26% of women social entrepreneurs manage to obtain all the external financing they seek, compared to 46% of men. This occurs because investor support is similar with both profiles in the early stages of the company, but only 20-30% of women entrepreneurs reach the acceleration and financing phases, compared to 70-80% of men. However, the international area of the report notes that the Spanish social investment ecosystem has greater gender awareness than that of other European countries.

With regard to the causes of these differences in social investment, Mar Cordobés, a researcher at the ESADE Institute for Social Innovation and co-author of the report, explained that ‘the reasons are diverse: from the sectors in which women social entrepreneurs usually start their businesses, which are less highly valued by investors, to differences in the attitudes of men and women towards finance. Women feel less comfortable than men taking with external investors or using financial terminology.’

‘Social enterprises have the potential to be a very important tool to empower women and promote gender equality. However, their enormous potential is not being fully used, as the ecosystem seems to lack awareness and urgency with regard to the problem, and social finance runs the risk of replicating the same gender deficit as the main finances’, added Leonora Buckland, also a researcher at the ESADE Institute for Social Innovation and a co-author of the report.

Differences in equality

According to the study by the ESADE Institute for Social Innovation, the average social entrepreneur in Spain is between 40 and 50 years old (42%), is married or lives with a partner (65%), has children or dependents (60%) and has completed postgraduate studies (61%). Their companies are young (less than five years old) and, although the average number of partners per company is 3.2 (1.4 are women and 1.8 are mend), 22% of the companies have only one partner and, of these, three out of every four were founded by women.

With regard to gender, important differences can be found between men and women entrepreneurs. Men devote more hours to than women to their companies, but are less likely to acknowledge that the social impact is their company’s main goal (51% of men versus 83% of women). Careers and education also vary: men have more experience with entrepreneurship, whilst women have more education (32% of women versus 20% of men).

Finally, with regard to equality policies within social enterprises, women entrepreneurs showed a greater degree of commitment to gender equality, a goal to which they gave a score of 4.07 out of 5 in importance, whilst their male colleagues only scored it 3.85. The importance that both groups gave to the question is high (62% for women, 52% for men), but this circumstance is barely reflected in concrete measures within the company.

Financing, an obstacle for social entrepreneurship in Europe

The ESADE report also studies social entrepreneurship financing in Europe and whether it is distributed based on an appropriate perspective of gender equality. To this end, it examined the responses of more than 40 experts and social investors, concluding that, at present, and except in the case of the United Kingdom, the financial sector is not particularly aware of this issue. On the one hand, a critical mass of social initiatives that include gender equality policies in their business plans and has not been reached and, on the other,no investor conceives of them as an important requirement to finance a project. In fact, according to the study, although this circumstance may be key in this specific sector, most European social investors do not see an urgent need to work in this direction.

The study also notes that gender-focused investment is a dynamic form of impact investment that is quickly growing in the US, although it has yet to put down roots in Europe. Because, although since 2014, the volume of assets under administration in public debt and shares with this perspective has grown by five on the Old Continent, the number of venture capital funds that operate in it with this approach less than 60.