While there are still only a very small number of women venture capitalists and most private equity funds are still dominated by men, women around the world have decision-making power over investable assets that surpass the approximately $55 billion in global venture capital.
Women in the Middle East alone control well in excess of $60 billion in deployable capital. For example, Lubna Olayan, the CEO and Chair of the Board of Olayan Group, is worth upwards of $12.4 billion according to news reports, while Sheikha Moza bint Nasser of Qatar, the Chairwoman of the Qatar Foundation for Education, Science and Community Development, manages over $7.9 Billion.
“If more women around the globe could be educated about investing in science, technology and education for women in high-tech sectors imagine the collective impact and growth on our global economy,” says Anu Bhardwaj, a scheduled moderator at the Pioneers Festival in Vienna October 29th to 30th and founder of Women INVESTING in Women, a global media company focused on educating young women and girls.
Bhardwaj compiled research on global investment trends for women during her Fulbright Scholarship at the Indian Institute of Technology in Mumbai and while completing her MBA at the Stockholm School of Economics in Sweden.
She went on to invest $750,000 of her own capital to create Women INVESTING in Women, which has organized eight summits around the world with anchor partners such as Intel, PWC and NASDAQ collectively endorsing the economic empowerment of women as the goal.
The Venture Capital Sector Remains Biased Towards Men
The group plans to hold its next Women INVESTING in Women summit in March 2015 in partnership with UN Women at the UN Headquarters for the Beijing +20/International Women’s Day celebrations.
“Philanthropy has been the traditional approach for women; however, educated women are now becoming actively engaged in both angel investing and private equity investing either through family offices or various institutional vehicles,” says Bhardwaj.
Since 2012, the global crowdfunding industry has witnessed a wave of women entrepreneurs getting funded and a new pool of women who are actively deploying capital in smaller investment allocations across a number of industry sectors, she says.
That’s good news because the venture capital sector remains biased towards men, says Anne Ravanona, a scheduled speaker at the Pioneers Festival and founder and CEO of Global Invest Her, a Paris-based organization that aims to help women entrepreneurs get funded faster.
“The actual situation is that only 5% of VCs are women in America and only 19.6% of business angels are women. Some 80% to 95% of funding is in the hands of men so we know when people say there is no bias in funding women it is completely untrue,” she says.
Studies conducted by the U.S.’s Small Business Administration Office of Advocacy and the Kauffman Foundation found that investors get a higher return on women-led businesses and, according to Dow Jones, VC firms that invest in women-led firms perform better than VC firms that invest entirely in men-led businesses, says Ravanona.
Only 13% Of VC Deals Go To Companies With A Female Founder
Yet, the percentage of U.S. VC deals to companies with a female founder have risen from a mere 4% in 2004 to only 13% by June of 2013, she says.
“Look at the size of the opportunity to increase that.”
“Guys have figured out how to roller-coaster in with bravado but women try to get everything perfect before we talk to investors, and tend to underestimate how much money we need,” Ravanona says.
What’s more, VCs usually only invest in women when they are heading tech companies in retail in areas such as fashion and cosmetics — areas that women are supposed to know something about, she says. A study by Pitchbook, a private equity and venture capital firm, found that in the U.S. only around 5% to 10% of investments by VCs in women-led companies were in areas like software and biotech while funding of women-led retail companies approached 40% of deals.
It is partly a communication problem. In order to be taken seriously by male venture capitalists one French woman entrepreneur went as far as hiring a coach to teach her how to walk and talk like a man.
The solution isn’t to try to be more like men but to figure out how to best communicate with male investors, says Ravanona.
Global Invest Her is launching an online portal to demystify the funding journey for women. It plans to offer a webinar called “Owning The Moment: Using Gender Acumen In Pitching To Male Investors,” which will be run by gender specialist John Fayad. The one-hour webinar can be coupled with one-on-one training sessions with the specialist to learn how men’s brains are wired so that women can tweak their pitches accordingly.
Aurore Belfrage, a co-founder of Swedish social gifting service Wrapp and a scheduled speaker at the Pioneers Festival, is also focusing on training women entrepreneurs. Belfrage is now COO at Your Middle East, a media company focused on shifting the way the news is covered in that region and being “agents of positive change.”
Most Of The Start-Ups Who Come And Pitch Are Women
Entrepreneurship is one of the most popular topics on the site, says Belfrage; Your Middle East team has organized workshops for the region’s entrepreneurs during a roadshow that kicked off in Istanbul in April and includes stops in Dubai, Amman, Tunis, Riyadh, Cairo and Doha. The events include master classes run by successful entrepreneurs and business people and model pitch sessions with entrepreneurs. “We don’t market it as a women’s event but most of the start-ups who come and pitch are women,” she says.
“There are a lot of amazing women in this region in tech.”
Belfrage’s advice to women: “Label yourself as an entrepreneur and give yourself the freedom to think world domination.”
While Global Invest HER and Your Middle East coach the entrepreneurs, Women INVESTING in Women is coaching high-net-worth women to invest in private equity, venture capital, crowdfunding platforms and women entrepreneurs.
“It is a virtuous circle,” says Ravanona. “We need more women entrepreneurs, to get more women entrepreneurs funded, then when they are successful to get them to be angel investors and invest in other women. We also need to tap into women at the top level in corporates and reach other high-net-worth women that today are concentrating on philanthropy and convince them that they should be moving more of that money into companies powered by women.”