Closing the Gender Investment Gap

The need to close the gender pay gap is well known. What isn’t spoken about as often, but really should be, is the enormous gender gap in founder funding. Women-led startups received only 5% of venture capital funding in Australia last year.

There are a host of reasons for this. Women I speak to overwhelmingly cite three key impediments: lack of knowledge, lack of confidence, and not having any connections in the investment community. Thankfully, I am not the only one speaking to women about this issue.

I was privileged to have a voice at the table at the recent Female Founders Investment lunch with NSW treasurer The Hon. Matt Kean . Having announced a $10M investment fund for women in honour of Carla Zampatti, the treasurer gathered a group of VC's, entrepreneurs and women of influence to discuss best use of the fund.

My comments were that the fund should not require founders matching. The federal government’s Boosting Female Founders Initiative is severely prohibitive in that it expects women to come up with 50% of the money themselves.

I also said that it is important for women to have the tools to learn how to create wealth outside of their businesses, since most of the time they remortgage their home and go into severe debt to launch a business and have no safety nets. So as well as knowing how to seek investment, they also need to learn how to actually become good investors themselves.

I also made the point that all kinds of businesses should be considered for funding, not just trying to pick the next unicorns. A business where a woman replaces her salary with a good business is valuable to the entire social system. The profits that women reinvest into their families and communities far outweigh what men contribute. In fact women reinvest 90% of their income compared to just 35% for men.

As Matt Kean said when introducing the recent 2022-2023 NSW Budget Womens Opportunity Statement: “ These reforms will not just help women, they will help underwrite our State’s prosperity for decades to come. New South Wales has some of the most highly educated women in the world and unleashing their creative and professional capacity will help drive economic growth across our nation.”

What would you say? How could the $10M be best used to support women’s entrepreneurship in NSW?

Here is another idea: a program called InvestHer that Rare Birds is running October - November with the support of the City of Sydney. It’s a national program aimed at closing the gender investment gap by connecting female founders to the investment community through free workshops, meet-ups and mentoring. I would love to reach as many female founders as possible with this program, so please share with your networks!

#closethegendergap #femalefounders #investinwomen #womeninbusiness