Welcome to our #101 weekly newsletter.
“For women taking control of their financial future”
-Jana Hlistova
From The Purse
In this week’s newsletter, we focus on investing in female founders of colour.
On Monday, Project Entrepreneur, a UBS programme supported by Hello Alice, created to help close the equity gap that female founders of colour experience when obtaining access to capital, announced its winners.
Female founders of colour receive less than 1% of venture capital (US).
***
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 Heather McGregor (aka Mrs Moneypenny), Executive Dean of Edinburgh Business School, Heriot Watt University.
She is a non-executive director on several boards and received the IoD Scotland Chair’s Award in 2020.
We talk about money and how women can grow their net worth.
I hope you enjoy this week’s newsletter.
Until next week,
Jana
Investing in female founders of colour
Project Entrepreneur: programme winners announced and $25,000 awarded to 40 female founders
The stats are shocking:
Black and Latinx female founders receive less than 1% of venture capital (US).
And only 3% of the people actually leading investments are Black.
Serena Williams, tennis champion and founder of Serena Ventures (VC firm), wrote about the unique challenges for female founders of colour in her op-ed in CNN Business in 2020:
“…Black women face a unique set of challenges colored by misconceptions of both race and gender. Investors notoriously doubt female founders, typically focusing investment analysis on the potential risks and losses of female-founded startups.
They often assume that women-founded companies are more likely to fail….
Meanwhile, Black founders contend with systemic inequity at each step of their journey. Investors expect to see more traction from Black founders than their White counterparts, and will often question their technical expertise and market understanding…
Black women rarely have a wealthy network they can call upon for early investment…”
But the funding gap starts well before….
… founders of colour prepare to raise their first venture round.
Nearly 40% of early-stage entrepreneurs raise initial funding through a ‘friends and family’ investment round.
However, because of the disparity in median wealth between people of different races, the racial wealth gap, many entrepreneurs of colour do not have access to a network nor the very early capital to get their business off the ground.
Serena Williams goes on to say in her op-ed:
‘Without the network necessary to raise critical starting capital, most Black female founders close shop before their product even reaches the market.
By building exclusive spaces and systems, we are missing out on the innovation and genius of so many..’
Enter Project Entrepreneur…
… a UBS programme supported by Hello Alice, a multi-channel platform that helps businesses launch and grow (US).
The programme was built to help close the equity gap that female founders of colour experience when obtaining access to capital.
On Monday, the programme announced winners of its Democratising the Friends & Family Round program, which attracted 12,000 applications.
Due to popular demand…
…the programme increased the amount of grants available from 30 to 40.
In total, $1m has been distributed to early-stage, high-growth companies led by female founders of colour.
In addition to providing $25,000 in individual grants, each founder will gain access to virtual coaching and other skill-building opportunities.
Some of the winning companies included:
STEAM-focused gaming for girls
artificial intelligence-powered beauty brands
med-tech innovations
and artisanal food products
Jamie Sears, Head of Community Impact & Corporate Responsibility, Americas at UBS had this to say, as quoted in Business Wire:
‘The sheer number of high-quality applications to our program highlights the inequality that female founders of color face and the financial support they need from investors to continue to grow their companies'..
VC firm Serena Ventures…
… takes a different approach to investing in female founders of colour which is disrupting the traditional VC investor ecosystem.
The firm invests in early-stage founders who often pitch them on a vision.
They look to support dreamers and visionaries of the future, while giving them the opportunity to capitalise on their genius.
By recognising the systemic bias embedded in the mindset, process and decision-making inside traditional VC firms, Serena Ventures turns the process of investing in diverse founders on its head.
They invest based on potential and opportunity.
News in Brief
Financial news
On Wednesday, US Federal Reserve chairman, Jay Powell confirmed an interest rate hike in March. And did not rule out a series of aggressive interest hikes that the market was not expecting. It is more than two decades since the central bank last raised rates by more than 0.25%. (US rate hike bets are jumping from 4% to 4.3% as Fed's Powell reaffirms hawkish stance).
Financial conditions keep worsening following the US Federal Reserve announcing multiple interest rate hikes in 2022. Credit Risk for Junk bonds in Europe rises to highest since Nov 2020 as investors turn away from risky assets.
US GDP rose 6.9% (on an annualised basis) end of 2021 and cements best full-year gain since 1984 as the pandemic recedes.
The European Central Bank (ECB) balance sheet jumps >€8,600bn for the first time as Christine Lagarde keeps printing money (QE) despite rising inflation, which is currently at 5%. Total assets rose by another €6.4bn on QE. ECB balance sheet now equal to 82% of Eurozone GDP vs Fed’s 38.2%, and BoJ’s 134.5%.
FTSE 100 outperforms Europe on strong dollar following US Federal meeting. The FTSE 100 was 0.4% stronger at 7,499 whilst the German Dax declined 0.44% and the CAC eased by 0.2%. The key driver for the FTSE 100’s outperformance was declines in GBP/USD which saw the return of the inverse relationship between the pound and FTSE 100.
UK borrowing figures put pressure on UK Chancellor, Rishi Sunak to ditch national insurance hike.
Crypto: bitcoin, ethereum, DeFi & NFTs
Bitcoin returns to $37,000 amid warnings that BTC price needs to go lower. (See the current bitcoin price).
DappRadar Report: why are NFTs sidestepping the ‘crypto crash’? For example, the inclusion of celebrities and big brands in the NFT world appears to be growing by the day. Also, there is an argument where certain NFTs should be viewed as cultural pieces rather than digital assets.
Arizona (US) considers making bitcoin legal tender. Even if the bill becomes law in Arizona, it’s unlikely to have much impact on usage of bitcoin in the state.
Cathie Wood’s Ark Invest predicts bitcoin could exceed $1m by 2030. ‘Bitcoin’s market capitalisation still represents a fraction of global assets and is likely to scale as nation-states adopt [it] as legal tender’. Last year, Cathie Wood predicted that bitcoin could reach $500,000 by 2026.
SEC rejects Fidelity’s application for a bitcoin ETF. A bitcoin ETF doesn't exist in the U.S. yet because the SEC has been reluctant to approve one. However futures Bitcoin ETFs do exist in the U.S.
Monthly NFT trading volume reaches all-time high of $6bn in January. Monthly NFT volume grew 129% in January relative to December. Much of the increase was due to the latest contender in the NFT marketplace scene, called LookRare.
Bored Ape Yacht Club: Eminem, Jimmy Fallon, Steph Curry, Post Malone, and a dozen other high-profile celebs are now holders of the popular Ethereum NFT collection.
The Purse Podcast
We cover the following in our conversation:
how women take charge of their money
investing for the long term
female investors
funding female founders
ESG investing
and more
Please enjoy! Listen on iTunes and Spotify+
Coffee Break? Read This
Women’s anger is not dissipating and politics as usual won’t solve it
Feeling ambivalent about your boss hurts your performance even more than disliking them
We’d love to hear from you. Get in touch with Jana via the The Purse website or tweet @jointhepurse and @janicka.
The Purse Ltd. Copyright 2022 & All Rights Reserved.
The Purse provides content for informational purposes only, we do not recommend products or services or provide investment advice. Please do your own research or speak to a financial advisor.
Share this post