After first announcing it in the state budget back in November 2020, the Victorian government has revealed more details about its $10 million Women’s Angel Sidecar Fund, which is named after a local tech icon and will be open for applications from July.
In 2019, of the 104 Victorian startups that secured angel or VC investment, just 19 were led by women, a statement from the state’s startup agency, LaunchVic, said.
Operating as a so-called ‘sidecar’ fund, the scheme will see the state government take part in early-stage startup funding rounds. Their investment will make up a third of the total round, with private sector investors making up the difference.
That means up to $30 million in funding could potentially be released for investment into women-led startups.
The fund has been dubbed The Alice Anderson Fund, after the woman who opened the first all-women garage in Australia, in Kew, back in 1919.
At just 19 years old, Anderson was reportedly committed to educating and creating employment opportunities for women in mechanics and engineering.
“Victoria has many modern-day Alice Andersons and we’ll continue to back their innovation, excellence, vision and commitment,” Victorian Minister for Women Gabrielle Williams said in a statement.
Minister for Innovation Jaala Pulford suggested the new fund will serve to level the playing field for local startups, ensuring more women-led startups can secure access to early-stage funding.
“At all stages of the startup life cycle, women-founded firms are a significant minority,” she said.
“This is a pivotal time to support women entrepreneurs to drive economic growth and create new jobs.”
Here’s the low down:
The fund will provide investments of between $50,000 and $300,000. It’s expected to back between 40 and 60 startups over the next three years.
The state government’s investment will cover a third of the total funding round, with the rest being contributed by private sector investors.
There are two possible ways a startup could be eligible for the fund.
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First, a business is eligible if it is 50% owned by women, before any external investment.
This means — unlike the federal government’s Boosting Female Founders Fund, for example — a startup co-founded by a man and a woman would still be eligible, even if it has already raised some equity funding.
Second, a startup is eligible if there is a 30% ownership stake by women, and at least one woman in an executive role — such as chief executive officer or chief technology officer.
Additionally, if there is a board, there must be at least 30% representation of women.
Startups must be a registered business in Victoria, and must meet LaunchVic’s definition of a startup: a business with ‘high impact potential’ that uses innovation in some way, and addresses a scalable market.
Private sector investors under the scheme must either hold a valid Australian Financial Services licence, or meet the criteria of a ‘sophisticated investor’.
They must also operate completely independently from the startup.
Investors do not have to be based in Victoria to take part in the scheme.
In a statement, LaunchVic chief Kate Cornick urged investors to “start reviewing their pipeline for those talented women founders, so we are ready to invest come July”.