Welcome to our #194 weekly newsletter.
“For women taking control of their financial future”
-Jana Hlistova
From The Purse
In this week’s newsletter, we spotlight the research published by the British Business Bank on how to improve diversity in the UK venture capital industry.
In 2022, female founders received just 2% of venture capital funding.
And don’t forget to listen to The Purse Podcast interview with Triin Linamagi, Founding Partner of Sie Ventures. We talk about female founders, raising capital, female investors and how gender lens investing can become mainstream.
Listen here to the full interview.
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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
Report: improving diversity in UK venture capital firms
The British Business Bank has published its report on how to improve diversity in the UK VC industry.
The British Business Bank recently published its report on improving diversity in the UK venture capital industry.
Despite making strides in recent years, women are still vastly underrepresented in venture capital or entrepreneurship.
Out of all venture capital investment in the UK, all-female founder and mixed-gender teams receive about 1% and 10% respectively; while all-male teams get 89%. In 2022, female founded teams received just 2% of venture capital funding.
In terms of entrepreneurship, only 1 in 3 are women and approximately 14%+ of angel investors are female. And we know that female investors invest (in female founders) up to three times the rate of male investors
Recently, UK MPs also have urged the Treasury to make collecting and publishing the diversity statistics of venture capital firms and their investments a requirement for eligibility.
The research from the British Business Bank has contributed new evidence ‘by asking investors and entrepreneurs to share their experiences of the most effective actions’.
Based on their analysis, the British Business Bank suggests there are at least three different ‘pathways’ to success that venture capital firms have taken:
Pathway 1: diversity at the top
These venture capital firms focus on increasing diversity among key decision-makers, particularly the Investment Committee. A broader range of views ‘at the top’ can result in more investment in non-traditional or underserved founders.
Pathway 2: inclusion in the pipeline
These venture capital firms put far more emphasis on increasing inclusion in the deal flow pipeline. They actively seek out diverse teams, engage with scouts to diversify the investment opportunities they are exposed to and use accelerators and incubators for earlier stage firms.
Pathway 3: transparency and accountability
These firms subscribe to the notion that ‘what gets measured gets done’. Measuring and delivering progress is regarded as essential supported by an emphasis on external communication, genuine commitment and active participation in industry-wide collection.
Entrepreneurs have also validated the above approaches and offer additional insight for venture capital firms, this includes:
Entrepreneurs place high value on feedback and cross-referrals to other venture capital investors.
The role of the Limited Partner (LP) community is key to encouraging adoption of actions and accountability.
More detail is provided in ‘Evidence on Each Action’.
One of the reasons we are starting to see more women launch venture capital funds, whether solo or otherwise, is to address markets often ignored or misunderstood by mostly white, male venture capitalists.
This is a step change which is also putting more pressure on a traditional industry which has been very slow to adjust and shift its focus to being more inclusive and diverse.
What next? (Re) listen to The Purse Podcast:
News in Brief
Financial news
Fed’s Chairman Jerome Powell: Fed Staff no longer forecasting a recession this year.
Fed raised interest rates to the highest level in 22 years as expected and left the door open to additional increases as officials fine-tune their effort to further quell inflation.
ECB raises all rates by 25bps as expected. Deposit rate to 3.75%, highest since April 2001, main refinancing rate to 4.25%, highest since 2008. It is the ninth consecutive hike in a cycle that started exactly one year ago.
Eurozone M2 money growth turned negative for the first time in Eurozone history, in a promising sign for inflation. M2 growth revised to -0.1% in May from initially +0.3%, and falls deeper into negative territory in June to -0.5%.
Pound on worst run since March 2020 as weak economy curbs interest rate rises. New report suggests British economy almost stalled in July as consumers limited spending.
Meta stock surges after company reports 11% rise in revenue. Revenue grew to $32bn, marking company’s most profitable quarter since 2021, as news sends stocks surging by 7%.
MPs challenge VC firms over record on female and minority-led firms. Treasury committee finds huge majority of venture capital funding goes to companies run by white men in south-east England.
Crypto: bitcoin, ethereum, DeFi & NFTs
Bitcoin (BTC) lost 1.7% and is currently trading at $29,287, while Ethereum (ETH) lost 0.9% and changes hands at $1,875.
Shibarium blockchain's Ethereum bridge goes live for testing as SHIB tries to shed meme coin tag.
Sam Altman’s Worldcoin launches token with more than two million sign-ups. The project frames itself as an antidote to some of the problems posed by the explosion of AI tools like ChatGPT, but it has faced harsh criticism from privacy advocates.
France's privacy watchdog looking into Worldcoin's 'questionable' legality. France privacy watchdog CNIL initiated investigations into Worldcoin.
The Purse Podcast
We cover the following in our conversation:
Sie Ventures: the backstory
Why is it still difficult for female founders to raise funding?
Female founders generate higher returns
The vision for the fund & thesis
Investing in diversity
Female investors-how do they differ in how they invest?
How do we ensure gender lens investing goes mainstream?
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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The Purse provides content for informational purposes only, we do not provide investment advice. Please do your own research or speak to a financial adviser.
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