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Are women entrepreneurs getting shortchanged?

Mar 25, 2024

In celebration of International Women's Day and its theme "Inspire Inclusion," Ivey spotlights five exceptional faculty members whose research and teaching are shaping a better, more inclusive future for women. Read on to discover new insights from Laurel Steinfield on gender lens investing – its goal, its barriers, and its way forward and watch the video above. 

For some, the spark for gender advocacy begins at home. For others, it begins in the classroom. For Ivey’s Laurel Steinfield, Assistant Professor, Entrepreneurship, it began while working in South Africa.

After completing her Bachelor of Commerce, Steinfield boldly decided to decline a promising job opportunity at a prestigious accounting firm. Motivated by a deep-seated desire to drive meaningful change, she embarked on a journey to South Africa for a low-paying – yet impactful – internship with the African Institute of Corporate Citizenship, working on an initiative to improve corporate governance in South Africa. Afterward, she took on odd jobs working in academia, as well as the emerging social enterprise space. However, at one institution, she experienced significant sexual harassment. In this moment of adversity, while she made the decision to leave the job, a transformative opportunity arose, reshaping the course of Steinfield's life.

Recognizing her potential and sensing her need for support, the owner of the commune where Steinfield resided offered her a work opportunity that involved researching and highlighting women’s experiences at a notable venture capital firm. This work coincided with the launch of a new "women's fund." Immersed in this research, Steinfield's perspective was tested, revealing systemic gender biases that only fueled her resolve to challenge, rather than accept, the status quo. This research also helped her to recognize the harmful impact of sexual harassment in her former role.

“[At the time] I didn't get it. I thought it was just 'the way things were,' and that if I didn't like it, my only option was to leave,” she said.

Observing the transformative impact of research and its capacity to shape organizations and drive change, Steinfield was inspired to become a university professor. Here, she could conduct her own research and educate others on methods to effect positive and inclusive social change.

Since then, Steinfield has led several projects focused on women's economic empowerment. Today, through her research at Ivey, she remains dedicated to this cause, as proven by her recent study, Warning! Translation Error: Why Growth in Gender Lens Investments Has Not Translated into a Growth of Women Entrepreneurship.

In this pioneering research, Steinfield and her research collaborators set out to tackle three pivotal questions: Is gender lens investing effective, in what ways is it effective, and what hurdles impeded its effectiveness? Through 20 in-depth interviews with stakeholders in gender lens investing and an exhaustive review of relevant reports and a decade’s-worth of YouTube videos, Steinfield’s team unearthed a complicated reality: While gender lens investing was making inroads and helping to raise awareness of investing and supporting women, it was falling short of its intended impact.

Warning! Investment roadblocks ahead

From their findings, Steinfield and her colleagues discovered a number of reasons why gender lens investing, while it has grown in size, has struggled to achieve a wider, inclusive, and meaningful impact. Two of these include direction of funds and directing of funds.

Issues around direction of funds involve organizations using their funds to increase vanity metrics, like appointing women to management teams or boards, but failing to pursue further transformative measures that could support women in lower levels of position. More companies may become involved in gender lens investing, and that’s an important first step. But the challenge remains on how to move them to do more beyond headcounts.

Likewise, in terms of directing of funds, the typical approach to financing women entrepreneurs uses a targeted or results-oriented strategy focused on disbursement and not women entrepreneurs’ success. To channel the money, instead of leveraging women venture capitalists who may have a better grasp on the community’s needs, existing institutions with established reputations are used.

“Regrettably, most banks distribute funds using a one-size-fits-all approach, neglecting to tailor their offerings to meet the distinct needs of women entrepreneurs,” said Steinfield. “So, they are basically forcing women to fit into a system built by men and for men. Because of this, many of these loans prove unsuccessful and fail to facilitate the growth and prosperity of women entrepreneurs.”  

Making a better investment

Despite significant barriers, Steinfield remains optimistic about the potential for positive change through gender lens investing. For banks and individuals interested in the investment practice, she suggests the following strategies:

  • Get to know the community where you want to invest;
  • Work with experts in the space so you’ll understand how to create product offerings that meet the needs of your audience, rather than trying to fit the firm’s products into the system; and,
  • Hire and support women from the community where you want to invest to create environments where people can see themselves. Although Steinfield cautions that firms shouldn’t assume these women can speak for, or fully represent, the needs of all women or women entrepreneurs.

“By hiring and forging partnerships with women in their target community, firms can better understand their unique audience, while also sending a clear message that women entrepreneurs can feel empowered and psychologically safe to work with your firm,” she said.