Backing women isn’t just a moral calling: Research shows that gender equality has a strong link to a company’s financial performance.
The European women in VC has published last May 27th the pan-European report on the venture capital ecosystem from a gender perspective; I was honored to have joined a panel about The Funding Landscape in Europe within Lead Today Shape Tomorrow. This is a Europe leading event for female entrepreneurship. Created by Female Founders, born in Austria and spread throughout Europe – it feels this is a good time to share some of the learnings from the last 2 years which I have dedicated to empower women in startups.
The new available data shows 2021 was again a record year for startups and venture capital funds, with over €100 billion invested in tech companies in Europe. Also a record year for VC funds, raising nearly €20 billion. But the money has not leapt forward for female founders at the same pace. Last year, companies founded solely by women garnered just 1% of the total capital invested in venture-backed startups in Europe.
The report highlights the imbalance for European women VC managers in the access to capital (only 9% of AUM are in the hands of females), the discrepancy across jurisdictions in the role of Managing/General Partner, and the unequal access to carry for females.
In spite of these shortcomings, it is fair to say something has happened. VC funding for female-founded or co-founded companies in Europe has been trending up in recent years, and 2021 saw the creation of several women-led funds, incubators for female founders and more new companies.
So why bringing this now?
Are we already in one of the biggest market downturns in 40 years, and certainly the biggest in the last 14 years?
Backing women isn’t just a moral calling: Research shows that gender equality has a strong link to a company’s financial performance. In fact, companies with more women in executive roles are 25% more likely to be profitable.
Investment in female led startups delivers significant better return for investors as studies also show that companies with a female CEO have a better stock price performance.
More female angel investors and more women in senior VC ranks is one of the key ways to get more women funded. And VCs need to hire women with transferable experience from outside the industry to tackle the overwhelmingly male partners’ share.
But we also need to become aware and break the biases that make investors ask female founders different questions than those asked to male founders.
My main takeaways for female investors in Europe are based on a two-year’s long review of multiple sources from the Angel and Venture Capital environment mainly in the USA:
- Start early and give yourself time to learn, fail and improve, as much as you can. Don’t wait too long. Don’t be afraid to make mistakes. That’s when we learn the most.
- Be real. You don’t have to feel like an imposter just because you are starting – this is such a young industry; we are all new here. Even if you have a totally different career, like I did, there are lots of options to get involved nowadays –become a mentor, participate in syndicates with small tickets, and so on. You can use all of these opportunities to learn, learn, learn.
- Get a peer group. Other women you respect, can talk to, discuss relevant topics to all of you and, more importantly, support each other, meet regularly and be brutally honest within this circle.
- Improve and build upon what you can excel in. Focus on your expertise. Other areas you can address later. Rome was not built in one day.
And be brave, be bold, be fearless. The secret ingredient to changing the world is a relentless will to be better tomorrow than you were today. And we, women, know how to support each other and take care of others. Now is the time to lead.