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Gender Lens Investing: Connecting Female Founders and Female Funders

Updated: Sep 18, 2022

The $147 billion raised in 2018 by all-male founding teams exceeds the amount of Venture Capital dollars put into female founding teams for the last 19 years combined.
Kauffman Fellows, March 2020

Where are the female funders and founders?

In 2021, just 1.1% of European venture funding went to all-female founding teams. In the US, after an all-time high of 2.8% in 2019, in 2021, it had fallen back to just 2.1%.

Women are also underrepresented in those making the investments. In 2020, only 2.4% of founding independent venture capital partners were women, according to a report by Women in VC and most firms still lack even a single female partner.

The result is clear - women are not making funding decisions, and female entrepreneurs are not receiving investment.

In recent years, we have seen the rise of 'gender-lens' investment, particularly female investors focusing on female entrepreneurial founders. This isn't just about gender equity - it's also about sound economic sense.

Why Does Gender-Lens Investment Make Economic Sense?

Investing in women’s businesses reduces mortality and illiteracy rates and could add nearly $12 trillion to global gross domestic product by 2025.
International Trade Centre, Twelve Lessons in Gender Lens Investing, 2021

Investing in women-led businesses, or businesses where there is more equitable decision making, makes economic sense - time, and again, research shows that those businesses are also more profitable.

Research from McKinsey shows that companies in the top quartile for gender diversity on executive teams were 25% more likely to have above-average profitability than companies in the bottom quartile.

Recent research from the universities of Glasgow and Leicester went even further and identified that when three or more women are appointed to a Board, the positive impact on financial performance becomes even more significant.

So it makes economic sense, but very few of our largest companies fit this profile. Currently, only eight women are CEOs in the FTSE 100, and women hold only 14% of executive directorships, according to the Fawcett Society's Sex and Power report 2022.

“We’ve got to work quicker and harder, for the sake of women, for the sake of society and because a more diverse business is a more productive and innovative one.”
Amanda Blanc, Chief Executive, Aviva

Gender-Lens Investment looks to back entrepreneurial female-led start-ups as a fast-track to that more diverse and profitable business opportunity.

Who are the Gender-Lens Investors?

While gender-lens investment is being adopted in more mainstream funds, the investment landscape is also seeing the emergence of more specialised Venture Funds, many of them founded and led by women.

Pink Salt Ventures, launched in 2019, is the UK's first firm dedicated to funding female founders. Founded by Samira Ann Qassim, now joined by Saloni Bhojwani from Founders Factory, Pink Salt Ventures is preparing to launch its second fund in spring 2022 and sees backing women as a serious investment thesis.

The new fund aims to invest in a portfolio of twelve pre-seed and seed female-led companies in the UK, across different sectors, with an average investment of around £350,000.

We want to back the next generation of self-made female billionaires
Saloni Bhojwani, Co-Founder Pink Salt Ventures

Alongside her international success on the tennis court, Serena Williams has been a serial investor in under-represented entrepreneurial founders through Serena Ventures for over seven years. Led by founding partners Serena Williams and Alison Rapaport Stillman, a seasoned venture capitalise, Serena Ventures announced its first fundraise of $11million in March 2022 and has invested 53% in women founders, 47% in Black founders and 12% in Latino Founders.

We don’t require founders to come from historically underrepresented backgrounds, yet 76% of our portfolio founders do. We bet on the best founders, period.

Finally, we see this trend particularly strongly in funds focusing on female economic development opportunities aligned with the Sustainable Development Goals, particularly in sub-Saharan Africa.

Akazi Capital was founded in 2021 by South African investor Liebe Jeannot, now based in Canada. A crowd-powered impact fund built on the blockchain, Akazi invests in female entrepreneurs in Sub-Saharan Africa, focusing on the hard-to-secure early-stage funding up to $250,000. They are already making investments, especially in FemTech focusing on the needs of girls and women on the Continent.

Investing in women is the smart thing to do, and the right thing to do.
Liebe Jeannot, Founding Partner, Akazi Capital

Unlocking The Potential of Female Entrepreneurs with Gender-Lens Investment

Research shows that when women venture capitalists are in decision-making positions, they are twice as likely to invest in female founding teams.

Not only is this a direct investment opportunity, as Akazi Capital outlines: When you invest in women, not only are jobs created, but investments are made in healthcare, nutrition, and education in the communities they operate.

Gender-Lens investment unlocks capital and delivers on many Sustainable Development Goals, as the ITC has outlined. Investing in female entrepreneurs is not only good business but a significant contribution to our road map to a more equitable, sustainable and profitable future for us all.

To learn more about what SDG Changemakers do and how we support organisations like yours, get in touch.

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