Why Do Women Entrepreneurs Have to Work Harder Than Men?

Carmen Busquets was a pioneer investor in the fashion tech space, cofounding Net-a-porter and putting her money behind companies including Farfetch, Moda Operandi and Lyst. The Venezuelan-born Busquets is also an entrepreneur herself, starting her retail career while she was still studying at the University of Miami and, in the 1990s, founding Cabus, a multibrand luxury fashion retailer in Caracas.

She always projected into the future: in the pre-digital age, she’d attend fashion weeks in Europe and the U.S., photograph or draw the designs, fax or mail them to her customers and take their orders immediately, so they didn’t have to wait.

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After Net-a-porter, Busquets founded luxury website Couturelab which sold one-off, handmade objects, clothing and accessories from around the world, foreseeing the trend for artisanal designs, and “slow” fashion. While Couturelab is no longer trading, Busquets’ portfolio is brimming with fashion and retail tech companies, and she continues to mentor founders and entrepreneurs.

Busquets also manages her family’s investment portfolio along with her sisters, but she’d readily admit that it’s not nearly as much fun as helping fashion, luxury and beauty companies grow from acorns into mighty oaks. As chairperson of, and a minority investor in, Cult Beauty, she oversaw the sale of the company last month to The Hut Group for 275 million pounds.

She was particularly proud that Cult, an online beauty retailer founded by two young women in 2007, was well-run — and profitable. Indeed, Busquets’ passion lies in taking risks, empowering entrepreneurs and encouraging them to keep an eye on spending, pursue profit and work together with a sense of mutual respect.

But none of this is easy, she admits, noting that women investors and entrepreneurs have a tougher time than their male counterparts raising money, finding buyers for their companies, and arguing their cases in male-dominated boardrooms, banks and investor meetings.

Crucially, she also believes women still don’t have the “acquisition power” of their male counterparts to continue investing, on a serious scale, once they sell their companies. Here, Busquets talks about the challenges female founder-entrepreneurs face.

WWD: What are some of the barriers women who are building their own businesses face?

Carmen Busquets: From what I’ve experienced working in the luxury fashion e-commerce sector for the past 30 years, the biggest barrier facing women founder-entrepreneurs is the lack of representation in positions of power such as boardrooms, venture capital and private equity funds, financial institutions and the highest-ranking luxury groups. The male-focused “boys club” mentality makes it easier for men to progress, and holds women back, regardless of how competent they may be.

Another challenge I have noticed is that women who choose to have children end up essentially with two full-time, important jobs: work and family responsibilities. I decided early on that I didn’t want to have children, and I was able to take risks that women with young families aren’t able to take.

WWD: What sorts of difficulties do women face even after they’ve built successful companies and sold them?

C.B.: The most successful — and most profitable — luxury fashion e-commerce companies in the 21st century were either founded, or cofounded, by women and later acquired by men, as they are the only ones holding the “acquisition” power. In some cases, those men subsequently destroyed the businesses through lack of know-how, wasting all the groundwork that women had put into growing them. For too long men have used women as “muses to amuse themselves.”

Having said all of this, I have also met outstanding male investors such as Bill Fisher, one of the owners and board directors of Gap Inc. and founder of Manzanita Capital; José Neves of Farfetch, and Chris Morton of Lyst. They have all done a lot to proactively support and surround themselves with strong women. You can find powerful men who are willing to support women, however you have to work really hard to earn their trust.

WWD: What about raising money? How is the process different for a woman walking into a pitch meeting?

C.B.: When it comes to raising money or exiting, there’s no doubt that women have to work harder than men to gain trust. In my experience, women are held to tougher standards in order to gain approval from powerful investors, who are mostly men. A woman seeking investment needs to be running a profitable business with significant cash reserves — in the millions of dollars — and be able to prove year-over-year growth as well as growth in total revenues. Men founders can raise capital — and garner prestige — despite running loss-making companies because men tend to trust men more easily. I’ve seen many male-led companies that have completed successful initial public offerings without even having reached profitability.

WWD: In your experience, do you think women still have to be aware of how they look, in addition to what they say?

C.B.: I’ve always considered myself to be a strong woman, but in my early 20s, I felt the need to blend in and appear less approachable when dealing with men in finance. I wore a lot of black, and “armor” pieces from McQueen, Galliano and Rick Owens. It can be intimidating to be the only woman at the table when you are starting out.

WWD: Has the rise of ESG, diversity and inclusion in finance helped women entrepreneurs in any way?

C.B.: Because of the lack of representation in leadership positions internationally, there is a tendency for male investors to show interest in female founder-entrepreneurs because they want to be portrayed as fair and inclusive. For women, the real difficulties arise later when, regardless of their proven capabilities, they are pushed out as men tend to take over their roles. Of course, this doesn’t apply to every woman founder-entrepreneur.

The lesser-known women tend to face these barriers, while the ones who are already powerful, and who managed to make a name for themselves, don’t have to contend with these issues. And, from what I’ve seen, it’s significantly easier for successful women to receive respect from their male counterparts when they are celebrities. It’s my hope the industry will begin to appreciate the success of all women more, regardless of celebrity status. We need to get to a point where all women founder-entrepreneurs are valued and can remain at the helm of their companies even after reaching the stock market, if they’d like to.

WWD: What will it take to change entrenched attitudes toward women entrepreneurs?

C.B.: Until now, the majority of the money and, consequently, power has been in the hands of men. We need more women to start powerful, billion-dollar private equity and venture capital funds that are geared to backing women from all backgrounds and races. Only then will we be able to shift the old attitudes and pave the way for the inclusive and united work environment that we aspire to. Meanwhile, women need to hold strong, and continue to start new, innovative businesses as they have always done.

WWD: You have been in finance for a long time. What has changed for the better during your career so far?

C.B.: I was very proud when I was young: I wanted to show men that women could succeed. That was my real motivation when I joined Natalie Massenet as the main investor and one of the cofounders at Net-a-porter; I wanted to make sure that two women’s collaborative success was seen publicly. I knew it was going to be an uphill struggle, but I felt a responsibility to the women in my family and to society to prove this.

Looking back now, I can see that some of the culture has started to change for the better since Natalie and I set out. For a start, there are far more women founder-entrepreneurs intent on revolutionizing the industry and there is a lot more support from female editors and broadcasters who are keen to spotlight them and tell their stories.

But, for the most part, men are still the only ones holding the “acquisition” power. And with this often comes a waste of all the work that women founder-entrepreneurs carried out when trailblazing their way through the industry. Women inspire men to take over the companies that we start.

WWD: How are you working to change the perception of women entrepreneurs?

C.B.: I have always been opinionated and outspoken, as well as shy and introverted. However, experience and age have given me a renewed desire to speak up and defend female founders who have been wronged or mistreated. Women are often a lot braver than they are given credit for when it comes to taking responsibility and knowing our values.

My goal is to see women become the executive leaders that they are capable of being. I devote a lot of my time now to mentoring women founder-entrepreneurs and teaching them what I have learned about running a sustainable and profitable business focused on growth. That prerequisite hasn’t changed, as women are still more likely to be judged more harshly.

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