“Glimmers of hope”: Five incredible global initiatives to benefit female entrepreneurs
Thursday, August 30, 2018/
It can sometimes be too easy to get bogged down in negative news — especially when you feel like things can’t change for the better quickly enough!
Recently, I’ve written about the gender funding gap and how hard it can be for female entrepreneurs and women-led businesses to get the capital they need to start, grow and scale.
The situation in regards to funding is best demonstrated by the fact that, according to PitchBook data, in 2017 just 2.2% of all venture capital in the US went to companies founded solely by women. The situation is undoubtedly not too different globally. For female entrepreneurs, this funding gap and the difficulties women face in raising capital through other means such as banks can be disheartening.
However, amid the bleak stats, there are glimmers of hope which indicate that things might be improving.
So, here are five global initiatives helping female entrepreneurs raise capital and realise their dreams.
Goldman Sachs mega fund
In June this year, Goldman Sachs, one of the biggest investment banks in the world, announced it was launching a new investment fund aimed at backing women-led businesses. The Launch With GS fund will invest $US500 million in private, late-stage, women-founded, -owned or -led companies.
While acknowledging the equity merit in creating a fund designed to foster female entrepreneurs, Goldman Sachs was also quick to emphasise that investing in women makes sound sense.
“Our goal with Launch With GS is to generate strong investment returns. The bottom line is this makes sense for our business — because investing and helping companies grow is our business. We also hope it makes a difference for women who have big ideas but find themselves cut out of the funding ecosystem,” said Stephanie Cohen, the chief strategy officer at Goldman Sachs.
We-Fi opens shop
We-Fi is a World Bank Group initiative that has amassed a $340 million fund with backing from 14 national governments, including Australia. It aims to back women-owned SMEs in developing nations. In addition to the money from national governments, the We-Fi fund has also attracted $1.6 billion in additional funds from the private sector, donors, governments and other development partners.
Microsoft’s M12 puts up $4 million
The Microsoft venture capital arm M12 launched a competition in July of this year for women-led startups focused on enterprise technology solutions, with a total prize pool of $4 million, with $2 million going to each of the two winning entrants. At this stage, the Female Founders Competition is open only to startups from Europe, Israel and North America.
As with Goldman Sachs, M12 has reiterated that it is looking for top-line businesses that will offer a return on investment. “This isn’t about checking a box. It’s an opportunity to remind the VC community that investing in women is more than just good values — it’s good business,” said Peggy Johnson, executive vice president of Business Development at Microsoft.
Women investing in women
Another brilliant trend we are seeing is growth in the number of successful female entrepreneurs paying it forward and investing in other women. One great example of this trend is the fund set up recently by Whitney Wolfe Herd, the founder of dating app Bumble, which is valued at more than $1 billion.
At about $1 million, the Bumble Fund is small compared to the big institutional funds set up the likes of Goldman Sachs, but it aims to give women from diverse backgrounds a shot at getting their business ideas off the ground. It will give out grants ranging from $5000 to $250,000, but will also provide advice and mentoring.
“We want to give more than capital,” says Sarah Jones Simmer, Bumble’s chief operating officer, who will be leading the fund. “We are in a privileged position of having built a legacy of experience over the last four years. And so much of what we are tackling is what other founders are facing on a day-to-day basis.”
Canadian government backs women
The Canadian government has been making significant inroads into positioning Canada as a destination of choice for tech companies like Google, especially in the area of artificial intelligence. Another element of the Canadian government’s approach to innovation and development is its support for female entrepreneurs, which is highlighted in its most recent budget.
The government has pledged to spend $1.4 billion over three years in financing for women entrepreneurs and $200 million for investments in women-led technology firms, along with a raft of other initiatives that will result in total amount to about $2 billion.
Proud that our government will invest close to $2B to increase women entrepreneurs’ access to capital, mentorship, skills training & will support their growth ambitions. Our strategy was created #ByWomenForWomen & when women succeed, we all succeed. pic.twitter.com/q3HM7RWRFm
— Bardish Chagger (@BardishKW) June 15, 2018