Welcome to our #207 weekly newsletter.
“For women taking control of their financial future”
-Jana Hlistova
From The Purse
In this week’s newsletter, we highlight the new report published by The Alan Turing Institute which states that female-founded AI startups account for under 3% of VC funding in the UK.
A key issue in the industry is the fact that VC firms continue to be dominated by men who prefer to invest in founders ‘who look and sound like them’.
Only 5% of VC firms that participated in funding deals have an equal or majority representation of women at decision maker level.
As women investors tend to invest in women up to three times the rate of men, their role in the startup ecosystem is vital, as they help to diversify investing decisions (which may better serve the world we live in today and in the future).
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And you can review the news in brief so you stay on top of global financial, economic and investing trends.
I hope you enjoy this week’s newsletter.
Until next week,
Jana
New report (UK): female-founded AI startups account for under 3% of VC funding
A new report by The Alan Turing Institute highlights the underinvestment in female-founded teams in the booming AI industry.
A new report, Rebalancing Innovation: Women, AI and Venture Capital in the UK, paints a concerning picture of gender diversity in AI-focused VC investing.
Female-founded companies account for under 3% of venture capital (VC) funding deals involving AI startups.
And between 2012 and 2022, 80% of total capital invested by VCs in AI was raised by all-male teams. In contrast, all-female teams raised a mere 0.3%.
Here are the key points from the Alan Turing Institute report:
Female-founded AI startups raised 6 times less capital than their male peers.
All-female teams raised £1.3m per deal compared with an average of £8.6m raised by all-male teams.
Most of the teams who make these funding decisions are men.
Only 5% of VC firms that participated in funding deals have an equal or majority representation of women at decision maker level.
As we know, VC funding plays a crucial role in technological innovation. They determine who and what gets funded, the growth trajectory and shape the culture of the startup.
White, male VCs tend to invest in founders who ‘look and sound like them’ and very often this does not align with female founders who continue to bump up against gender stereotyping and gender bias.
With the explosion of generative AI, there is an urgent need for women have an equal place in the VC ecosystem as investors and entrepreneurs.
Based on research, women investors..
..tend to invest in women entrepreneurs up to three times the rate of men investors. They share in the same lived experience as women entrepreneurs which can reduce the resistance women experience during the fundraising process.
Many reports point to women entrepreneurs needing to contend with outdated stereotypes from mostly male VCs, who continue to mistake ‘gender difference’ with a more risky startup or a lack of competence and experience.
As a result, we continue to see VC investment funding very similar startups, which may no longer be ‘fit for purpose’ in a high-interest world, grappling with fiat currency debasement, climate change and wealth inequality issues.
Moreover, they do very little to mitigate the risk of embedding bias and gender discrimination in AI-based products.
The Alan Turing Institute Report outlines some key recommendations including:
improving the recruitment and promotion processes at VC firms
fostering an inclusive culture
monitoring investment practices
and diversifying the ecosystem.
According to Dr Erin Young, Research Fellow and Project Co-Lead at The Alan Turing Institute:
“The stark figures in our report show the extent of gender inequality in venture capital funding.
Making sure more female-founded AI companies receive investment is crucial for encouraging responsible AI and fostering innovation.
One can only imagine what technical products and services might have been invented if women had equal participation in the VC and entrepreneurial ecosystem. We hope that our report offers a crucial starting point for these conversations.”
What next? (Re) Listen The Purse Podcast:
News in Brief
Financial news
Who has the losses on the books? Value of global bonds has lost another $1.04tn. This brings the total losses to $3.9tn since mid-July.
10 year yields jump 12bps to 4.84%, driven by a jump in real yields. US 10 year real yields now at 2.53%.
The 5% Bond market means pain is heading everyone’s way. The impact will be felt in everything from shoppers’ pockets to company balance sheets as there’s a lot of debt out there.
The interest rate on a 30 year fixed-rate mortgage is on course to 8%, highest level in 23 years. By contrast, the yield on 30 year US govt bonds is only at ~5%, which is the highest level since 2007.
US jobs report looks a bit hot, at least the BLS headline jobs number: US economy added 336k jobs in September, double the Wall Street consensus; but household survey told a different story.
Buyer’s market fuels fastest fall in UK house prices in 14 years. High mortgage costs result in sixth straight month of sellers being forced to reduce prices, says Halifax.
UK businesses still ‘reluctant to invest’ over Brexit and interest rates. British Chambers of Commerce survey finds EU trade barriers and high rates have ‘flattened’ investment.
Crypto: bitcoin, ethereum, DeFi & NFTs
Market leader Bitcoin (BTC) grew a modest 2.7% over the seven days and now changes hands at $27,952. It briefly hit a two-month high on Sunday night when it crossed the $28,000 threshold.
Ethereum (ETH) had a comparably harder week and lost 2.1% to trade at $1,636 at the time of writing.
Only two cryptocurrencies posted any notable price movements, rallying around 15% this week: Avalanche (AVAX), which currently trades for $10.39, and Solana (SOL), which is currently worth $23.31.
On Monday, the Solana network's total value locked (TVL) hit a new 2023 high of $338.82m.
Grayscale announced on Monday that it hopes to convert its Ethereum trust into a spot ETF.
A UBS asset tokenisation trial supported by the Monetary Authority of Singapore (MAS) was launched and nine Ethereum Futures ETFs were introduced in the U.S. on Monday.
Going Infinite: SBF's hairbrained schemes in new Michael Lewis book.
Both Starbucks and the Museum of Modern Art launched NFTs.
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Nearly one in three female NHS surgeons have been sexually assaulted, survey suggests
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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