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Supporting Women isn’t a Charitable Deed

by DIANA DORAHY|9 October 2020

One week on and we’re still talking about the deeply personal and uplifting piece in Medium* by Halogen Ventures’, Jesse Draper and her global plea to invest in women.

Drawing on the incredible achievements of the late, great Ruth Bader Ginsberg, she called on those in power to make investment in women a priority across the board. Only then, she says, will we see real change.

It starts with encouraging little girls to talk about money and how to invest it, conversations traditionally had by men with boys. At a corporate level, it means ensuring positions of power are held by women.

“Until those in positions of power at family offices, institutions, Fund of Funds and endowments at the Limited Partner level change their hundred year old investment philosophy, nothing changes”, says Draper.

Beyond the lack of diversity in venture capital investment, the economics doesn’t make sense either. According to Morgan Stanley, women-led and women-founded companies represent a three trillion dollar opportunity. As Draper quite rightly points out, women aren’t charities, this is about achieving profit and performance.

Cultural change is really at the heart of this movement and that only happens through education. For Zarmeen Pavri, VC Investment Manager and Partner at SDGx, that means a lot more discussion around gender lens investing (GLI). Practically speaking, investors must look beyond the ‘counting’ of women and more towards ‘valuing’ the diversity that gender brings to the equation.

“When you look at the commercials, you see so many companies leaving value on the table”, says Pavri. “They’re not exploring how to address and tap into the consumer purchasing power of women”.

There are also structural gender barriers that need to be addressed. Whether they’re laws that discriminate by limiting access to and control over property, which constrain women’s ability to provide collateral for loans.  Or, stringent identification requirements specifically aimed at women that make it more difficult to open bank accounts. These are significant barriers which stand in the way of women even beginning their entrepreneurial journey.

“Plus, we need to explore different ways to approach funding within our due diligence processes too, for example rethinking of the ways we “pitch” away from the shark tank style,” says Pavri. “Within the international development sector, women are creating new pitching mechanisms of circles instead of linear one way transactional styles”.

We are also seeing progress within financial institutions with global players including HSBC, Goldman Sachs and JP Morgan committing billions in helping to nurture female founder talent. In fact, JP Morgan just announced it’s already reached the halfway point in its ten billion dollar three year pledge to help women small business owners grow and scale their companies*.

Of course, one of the biggest issues still remains – ‘unconscious’ bias; a cultural attitude and belief system which is so deeply entrenched, it’s even discouraged women from taking part in pitch competitions or approaching investors.

“There’s still plenty of work to be done around prevention versus promotion questioning but at least we’re having that conversation now”, says Nicole Denholder, founder of Next Chapter Raise. “Eventually, it will become a thing of the past like asking a woman in a job interview if she’s planning to have children”.

In the meantime, says Denholder, it’s everyone’s responsibility to keep raising these issues and make stakeholders accountable. Only then will the idea that investing in women is not just about ticking a gender box, it’s a three trillion dollar investment opportunity that might otherwise be lost.

 

https://medium.com/@jessecdraper/investing-in-women-isnt-a-fucking-charity-ceabe8918b9c

https://www.cnbc.com/2020/09/29/jpmorgan-lent-5-billion-to-women-entrepreneurs-over-the-last-year.html