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Beyond The Billion: closing the gender venture funding gap and why female investors are key. And listen to our podcast with Shelly Porges, Co-founder & Managing Partner
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Beyond The Billion: closing the gender venture funding gap and why female investors are key. And listen to our podcast with Shelly Porges, Co-founder & Managing Partner

Welcome to our #97 weekly newsletter.

“For women taking control of their financial future”

-Jana Hlistova


From The Purse


In this week’s newsletter, we focus on Beyond The Billion, a global consortium of venture capital (VC) funds and limited partner (LP) investors and their recent report, Our First Billion Global Impact Report, assessing the results of their two-year campaign.

The campaign was a bold measure to inspire VCs to pledge to invest in female-founded companies.

This report found that the consortium deployed 61% of their pledged amount in just two years into almost 800 female-founded companies.

We interviewed Shelly Porges, Co-founder & Managing Partner for The Billion Dollar Fund for Women on The Purse Podcast.

We talk about female founders, access to capital, how to close the gender venture funding gap and why female investors are key. Please enjoy!

Don’t forget you can review the news in brief so you stay on top of global financial, economic and investing trends.

As this is the last newsletter from The Purse for 2021, we’d like to wish you a Merry Christmas and all of the best for the New Year.

Thank you for being on this journey with us.

We’re excited about 2022 as we continue on our mission to change the conversation for women about money & investing and support female investors, in not just growing your wealth, but helping to build the world you want to see.

Stay safe everyone & we will be back in early January 2022.

Jana


Beyond the Billion: closing the gender venture funding gap and why female investors are key

Assessing the results of their two-year campaign with Our First Billion Global Impact Report


The gender venture funding gap is real.

Beyond The Billion, a global consortium of venture capital (VC) funds and limited partner (LP) investors have released Our First Billion Global Impact Report, assessing the results of their two-year campaign.

What was the Beyond The Billion campaign?

The campaign was a bold measure to inspire VCs to pledge to invest in female-founded companies. It was the first-of-its kind global capital commitment focused on gender lens investing, as per the Beyond The Billion press release.

This report found that the consortium deployed 61% of their pledged amount in just two years into almost 800 female-founded companies—nine of which were recognised as unicorns, with the remainder expected to be deployed by 2023.

Here are some key takeaways from the report:

  • In under nine months, 86 funds with assets under management of more than $12bn pledged just over $1bn to be deployed by December 31, 2020. 61% of this capital or over $638m was deployed by December 31, 2020.

  • Close to 800 companies with female founders received investments. Of these, 69% were mixed gender teams, and 31%  were all-female founder teams.

  • As tracked by PitchBook, a subset of 479 of the women-led portfolio companies of pledged partner funds went on to raise more than $4bn within the timeframe of the pledge campaign (2018-2020). Pledged partner funds also reported investment in nine female-founded unicorns at the time of publication. 

  • This amount was deployed across five regions, including North America $374m+, Europe $121m+ and Asia $82m+.

Key insights include:

  • LP investors must re-engineer their processes to increase the diversity of their portfolios. LP investment profile constraints such as check size and track record requirements hinder the ability of emerging fund managers to attract capital.

  • The issues faced by general partners (GPs) mirror the issues of LPs with systemic barriers representing as much of a challenge as personal ones. Fundraising is by far one of the biggest challenges faced by fund managers investing into female founders.

Female founders struggle to raise capital..

…from venture capital (VC) firms, especially if you compare this to all male teams.

This is despite female founder outperformance and their startups exiting earlier at higher valuations per dollar invested.

In fact, funding for female founders declined last year by 3% whilst the overall VC market grew by 16%.

The good news is

…that we saw a 70% growth in the funding of female founders, in the first nine months of 2021, from the last high in 2019 ie an increase from $23.7bn to $40.4bn, as per the Pitchbook report.

And that compares with a 43% increase for that same period for the overall market which grew from $166.4bn to $238.7bn.

However, the gender diverse teams received approximately $36bn of the $40.4bn, meaning the female founder teams received $4.5bn (only).

Why female investors are key

Shelly Porges, Co-founder and Managing Partner for The Billion Dollar Fund for Women, had this to say on The Purse Podcast:

“Having female investors is critical and a couple of ways. It's critical for the female founders.

…Women check writers are twice as likely to invest in women as male.

Even though, surprisingly in some cases, females have some of the same biases, personal biases against women as the men do. But overall (on average) they are twice as likely to write the checks for women.

So that's very critical to ensure the capital flow goes to worthy female founders.

In fact, in 2021, the number of female check writers in the U S went up by 3.5% since 2019 resulting in 15% of all GP positions at funds in the U S being females. So that's really fantastic. And that helps…”

What next?


News in Brief


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The Purse Podcast


We cover the following in our conversation:

  • Female founders

  • Access to capital

  • Closing the gender venture funding gap

  • Female investors

  • and more

Please enjoy! Listen on all podcast platforms including iTunes and Spotify.


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We’d love to hear from you. Get in touch with Jana via the The Purse website or tweet @jointhepurse and @janicka.

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