“Women tend to be very risk-averse, and the venture capital sector is very risky and bold”

Meet Teona Khubutia, the unstoppable force behind Luxembourg’s thriving startup and angel investor scene. As manager of the Luxembourg Business Angel Network Association, she's a master at promoting angel investing and building strong relationships between investors and startups. With her finger on the pulse of the industry, Teona is a true powerhouse, inspiring and motivating others to get involved in this dynamic and exciting world.

What was your career path and how did it lead you to where you are today? 

My career path is atypical as I have a background in International Relations, which I studied in my native country of Georgia. I then moved to Luxembourg to pursue a master's degree in the same field (International Relations and European Governance).

During this time, I also worked in international missions and good governance, which led me to work in Kosovo with OSCE (Organization for Security Co-operation in Europe) implementing European government standards in Kosovo. After completing my degree in Luxembourg, I worked on various projects for large international organisations.

Eventually, I began working with the House of Startups and the Luxembourg Business Angels Network (LBAN). When I started, LBAN was small, and we were trying to establish a foothold in the market and increase our membership. We managed to achieve this, and I assumed full-time manager role at LBAN.

Why do you think women founders have a hard time finding angel investments?

There is no single answer to this question. I would not differentiate between angel investments and VC funds, as women founders have a hard time finding investments in both structures. The issue may stem from the way women approach the sector. Women tend to be quite risk-averse, while the venture capital sector is very risky.

I feel that women are more cautious about the decisions they make. Rather than considering risk aversion as a disadvantage, we should approach it as an advantage allowing balanced decision-making processes at the board level. Studies have demonstrated that when women are at a decision-making table, different angles of the projects are addressed and the overall process is more thorough. We all witnessed hasty decision-making processes during the pandemic when the valuations were hyped and VCs were investing out of fear of missing out. Having women at a decision-making level, can avoid such scenarios and guide the team into asking the right questions before deciding on an investment.

I think women should be involved in VC firms and decision-making processes, so they can identify similar experiences and grant funding to other women whose experiences they can relate to.”

I also want to address why women have a hard time finding investments. Statistically, especially when it comes to angel investments, investors tend to invest in fields where they have the most experience. For example, if a successful CTO of a big company who is looking to invest, they are more likely to invest in ICT solution startups because they trust their own judgment in this area. This is true for gender as well; male investors relate more to male founders, and they tend to invest in male-led startups.

Therefore, I think women should be involved in VC firms and decision-making processes, so they can identify similar experiences and grant funding to women.

Do you see a difference in the approaches to finding investments between women and men who lead startups? Is there a difference in the ways of handling business or pitching between women and men?

This is an excellent question. I would like to mention two factors. Firstly, statistically, if 100 men pitch their start-ups, maybe five of them will raise funds. If five women pitch their start-ups, statistically, there is even less chance that they will raise funds. To increase the number of female founders raising funds, we need to increase the number of females founding start-ups and pitching.

Secondly, gender is a factor in how women deal with these types of businesses. Based on my experiences and conversations with our business angels, there have been cases where we had excellent female founders with interesting projects, but their startup valuations were quite low, this raised suspicions among angel investors.

If it were a man who was skilled at pitching and had a good project, their valuations would have been higher. This has to do with the typical safer approach women take when it comes to valuing their work and projects.

Why do you think there are so few women in technology in Luxembourg?

I don't think it is unique to Luxembourg. Everywhere in technology, there are few women, and it has to do with society and the way women are taught to behave, the expectations placed upon them, and the choices they are encouraged to make.

As a result, it's not surprising that women don't end up in technology industries as they haven't acquired the necessary education during their teenage and adult years.

How can Luxembourg reduce the gender gap in the field of innovation and business?

Reducing a gender gap is a long journey and governments should play a strong role in this effort. Just like top universities offer scholarships for women who study specific tech programmes, especially those programmes that are not popular among women, the same can be applied to various grant and fund programmes that are available thanks to government policies.

Similar programmes could target female founders to encourage them to take risks and pursue their ventures.

Do you believe that diversity is a factor in growth and development?

Certainly. Diversity is what makes things more complete. Complementary skill sets bring out the best results in the end. I do not support all-male or all-female associations.

I am in favour of allowing women to be in decision-making roles, just as much as men so that they can bring their qualities to the table.

In your opinion, what steps should be taken, and by whom, to increase the amount of investment in women-led startups?

There are not enough female founders represented, and we need more of them to increase the number of investments made in female-led startups. One of the ways to achieve this is through government initiatives targeting female founders and making it easier for them to start. They should target access to information, access to knowledge sources and programmes that offer grants, study programmes or degree programmes that enable women to learn the necessary skills.. This will guarantee fair competition between male and female founders.

If a special organisation is created in Luxembourg, will it increase the visibility of women-led startups and attract more investors? Would it work in Luxembourg, considering the size of the country and the market?

I personally do not support segregating groups into only women and only men. The issue that society faces now is that there are only men in certain positions. Therefore, I prefer a balanced approach that combines the skills and qualities of both men and women.

Rather than segregating women, I would like to open the doors and include them in decision-making roles , where they can also evaluate the experiences of entrepreneurs and use their decision-making patterns to decide on funding.

Can you give some recommendations on how women can be more successful in seeking private funding for their innovative and promising proposals?

The question is well-phrased because it acknowledges the issue that female founders sometimes face when undervaluing their startups. Women may think that in order to compete, they need to set lower valuations than men, to similar quality projects and pitches.

My recommendation to women would be, do not discount, always ask an appropriate valuation for your projects, I also want to encourage women to recognize that it's okay not to have a perfect version of your product just yet, no successful startup ever had. Have the courage to step in and figure things out along the way. If you wait for a perfect version of your product before you launch, you will be too late, as markets move fast.