Welcome to our #111 weekly newsletter.
“For women taking control of their financial future”
-Jana Hlistova
From The Purse
In this week’s newsletter, we focus on European VC and female founder data for Q1 2022. The numbers indicate a fall in capital invested in female (co-)founders which seems to correlate to a deteroriating economic environment.
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You can review the news in brief so you stay on top of global financial, economic and investing trends.
And don’t forget to listen to The Purse Podcast interview with Kisha Mays. Kisha is a successful serial entrepreneur, an angel investor and a philanthropist. We talk about how female founders can generate $1m+ business.
I hope you enjoy this week’s newsletter.
Until next week,
Jana
European VC: a look at female (co-)founder data in Q1 2022
Venture capital investments to female founders has dropped compared to Q1 2021.
Female founders struggle to raise capital from venture capital (VC) firms.
This is despite female founder outperformance, their startups exiting earlier at higher valuations per dollar invested, and VC funding surging in recent years.
Last year in Europe, only 1% of VC funding of total capital invested was allocated to startups founded solely by women, as per Pitchbook.
Here are some key stats for Q1 2022:
Female (co-)founded VC deal count %:
Female founded only: 4.9%
Female & male founded: 15.8%
Female (co-)founded VC capital %
Female founded only: 0.9%
Female & male founded: 9.9%
European venture capital deal flow by female (co-)founded companies
Capital invested: €2bn (vs €3.3bn in Q1 2021)
Deal count: 434 (vs 607 in Q1 2021)
We’re seeing a drop in VC investments going to female (co)-founders globally..
…which seems to correlate to a worsening economic environment. Inflation is running hot, central banks are raising interest rates and investors are anxious about whether or not a global recession is imminent.
If female (co)-founded startups are (wrongly) regarded as ‘more risky’, mostly male VC investors will allocate capital to ‘what they know’; specifically investing in male-founded teams during times of uncertainty.
It’s why female investors are key…
…because we know that women tend to invest in female founders at least 2x the rate men do.
They also apply a new lens to investing and represent the lived experience and perspective of 50%+ of the population.
Female founders are not only up against gender bias, but they have to spend more time educating the majority male investors on their market and product.
It follows that female entrepreneurs have less resources to run their company for longer, so when they do raise capital (for their startup), they tend to be more effective money managers and generate a better return on investment.
As more female founders exit their companies and generate higher exits, we’re likely to see more capital flow back into women.
Women (and men) investing back into women is a crucial part of diversifying the money flow, backing female founders, growing entirely new industries and companies. And ultimately driving higher returns on investment.
What next? (Re) read this:
News in Brief
Financial news
Russia may be in default, Moody's says. Russia paid roubles on dollar bonds. Russia defaulted on foreign bonds after 1917 revolution, and defaulted on domestic bonds in 1998. Russia's economy facing worst year since 1994.
Lithuania's inflation has jumped to almost 16% but the European Cnetral Bank (ECB) will print another €90bn by June and probably even more.
The Euro depreciated by almost 10% against the dollar in the past 12 months due to an inactive ECB. This puts the Euro in a worse position than the Russian Ruble, which has lost only 8%.
The ECB's Christine Lagarde has said: the Eurozone is in different place than US economy. Therefore it is premature to talk about quantitative tightening. (see graph here)
The ECB leaves all rates at record low as expected. Plans to buy €40bn in April, €30bn in May, €20bn in June. Asset purchases should be concluded in third quarter but this is not set in stone.
US inflation jumped 8.5% in past year, highest since 1981 and higher than expected. But core CPI rose slower than expected w/6.5%.
UK inflation hits 7% in March as fuel prices surge. March reading is the highest in 30 years and increases pressure on Bank of England to raise interest rates again. It is expected that UK households’ real income will contract this year at the sharpest rate since records began in the 1950s.
Big Short investor Michael Burry warns US stocks are heavily overvalued and poised to tumble. Noted the S&P 500's price-to-sales ratio has nearly doubled in 10yrs. Price-to-sales ratio compares market cap to its revenues, instead of its profits or net assets.
Crypto: bitcoin, ethereum, DeFi & NFTs
Bitcoin price nears $41,000 as US inflation jumps to 8.5%. Bitcoin decoupled from the Nasdaq as inflation numbers were revealed. The Nasdaq traded down 2.35% (see the current bitcoin price).
Bitcoin-backed mortgages and pristine collateral discussed at Bitcoin 2022 (conference). Bitcoin as an asset is a perfect form of collateral and will likely be used to provide financial backing for mortgages and other forms of debt.
Traders move ETH out of centralised exchanges and into DeFi. On a percentage basis, Ethereum’s centralised exchange balance is at its lowest level since July 2016 — when ETH traded for just $10. Investors are bullish about ethereum ahead of ‘The Merge’ (see the current ether price).
Ethereum’s ‘Merge’ delayed despite successful ‘Shadow Fork’ test. It is anticipated that The Merge will now take place a ‘few months after June’.
MetaMask’s institutional arm makes push for DAOs with new custody deals. The ConsenSys-owned wallet provider says it want to bring ‘all organisations on planet earth into Web 3.’
Sotheby’s to host an NFT auction for generative art this month. Sotheby’s generative NFT art auction intends to include pieces spanning the history of generative art, beginning in the 1960s through present day, and is set to occur between April 18-24.
Michael Saylor, CEO of MicroStrategy, is bullish on crypto regulation. Saylor calls US Treasury Secretary’s speech on digital assets last week a ‘green light’ for the crypto economy. Saylor said that the bitcoin price could eventually be $10m+.
The Purse Podcast
We cover the following in our conversation:
female founders
how to generate a $1m+ revenue startup
Kisha's $100m global initiative investing in female founders
and more
Please enjoy! Listen on Apple podcasts and Spotify+
Coffee Break? Read This
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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