Over the previous week, conversations about ladies founders and enterprise capital in Australia have been amplified by Blackbird’s newest portfolio knowledge, reported by Startup Each day’s Simon Thomsen, alongside Elaine Stead’s considerate piece, The parable of the funnel.
Each level to one thing vital: The numbers we monitor matter, however the story they inform is dependent upon how we learn them.
This transparency permits us to maneuver from anecdote to proof – thanks largely to the excellent work of Noga Edelstein and the crew at Fairness Clear, who’ve championed openness and introduced important knowledge into the open.
The ‘funnel is only the start.
We regularly hear that the issue is solely certainly one of “deal flow”. That, there simply aren’t sufficient ladies founders reaching the VC pipeline. On the floor, the information appears to assist this. Blackbird reported that all-women founding groups make up simply 2% of its investments, as lined by Startup Each day.
Given Blackbird’s total “hit rate” of round 1–2% (firms pitched versus firms backed), that interprets into an nearly unimaginable 0.02% to 0.04% likelihood of an all-women crew being funded.
As Simon shares, it’s roughly a one-in-2,500 to one-in-5,000 shot. It’s a hanging technique to illustrate how slender the funnel is. However focusing solely on these numbers dangers lacking the larger story.
Blackbird’s knowledge displays a really particular slice of entrepreneurship: high-growth, venture-scale startups, principally in know-how, software program, and frontier industries. In that ecosystem, ladies are certainly underrepresented.
But throughout the broader financial system, the image seems completely different. In line with the ABS and the Small Enterprise Ombudsman, round 34–35% of small companies in Australia are women-owned. These are neither anomalies nor outliers. They symbolize a whole bunch of 1000’s of companies that make use of individuals, generate income, and contribute to GDP.
The distinction raises an vital level: ladies are beginning firms, however many are doing so exterior of the slender parameters that enterprise capital sometimes values.
Asking higher questions
As a substitute of stopping at “what percentage of our investments went to women founders?”, I’m eager to discover and deal with some deeper questions:
What structural boundaries forestall ladies from founding venture-scale firms on the similar charges as males?
How do these boundaries compound on the intersections of gender, race, tradition, and sophistication?
Why can we settle for a system that continues to direct greater than 98% of enterprise capital {dollars} to males?
Is the issue of “deal flow” one other method of claiming we haven’t constructed the networks to see ladies founders?
Why can we hold framing this as a “pipeline issue” as a substitute of an investor design flaw?
What would occur if capital had been allotted proportionally to the variety of ladies beginning firms, as a substitute of concentrated by default in male-dominated networks?
These are vital uncomfortable questions. As a result of if we don’t ask them, we threat treating inequity in enterprise as a matter of optics, when in actuality it’s a matter of financial effectivity.
Studying from the outliers and a few within the center
The encouraging information is that some buyers have already proven what’s doable after we deliberately design for inclusion:
Large Leap studies that 58% of its portfolio is women-led, with a goal of 60% and a mandate to speculate not less than $3 million yearly into women-led ventures.
Airtree has proven that when its Explorer angel program cohorts are ~50% ladies, deal move from feminine founders will increase by 20–30 per cent.
By comparability, the indomitable Tracey Warren and Bree Kirkham at F5 Collective are taking a special strategy by specializing in the ‘lacking center’. They again ladies who’re constructing sustainable, scalable firms that will not match the slender mould of tech or SaaS, however that are nonetheless important to the material of our society and financial system. By supporting these feminine founders, F5 challenges the binary of “VC-scale or nothing” and creates room for the sorts of companies most girls are literally constructing.
These examples counsel to me that the problem isn’t a scarcity of girls founders, however a scarcity of programs constructed to see them, assist them, and again them.
Constructing foundations, not only a funnel
If we wish to meaningfully shift these numbers, the query isn’t simply the way to widen the funnel. It’s the way to construct the foundations that enable extra ladies to even strategy it:
Increasing pathways to early capital, past conventional networks
Strengthening monetary literacy, peer assist, and mentorship.
Advocating for systemic reforms—from parental depart insurance policies to raised visibility for ladies in tech and well being.
Supporting funding fashions that cater to extra than simply “unicorns”—as a result of not each enterprise wants VC to be useful.
The query isn’t simply how we fund ladies founders, it’s whether or not the funding mannequin works for the form of companies they’re constructing. Enterprise capital isn’t damaged, however it’s optimised for a slender aim: speedy development and massive exits. That leaves lots of founders, and full sectors, out of scope. The reply isn’t to ditch VC, however to broaden the capital stack to make revenue-based financing, affected person fairness, procurement, and hybrid fashions extra accessible. If we wish completely different outcomes, we have to change how we discover, consider, and fund potential, so capital reveals up when and the place it issues.
Fairness isn’t nearly percentages in a portfolio. It’s about creating the situations the place ladies can select to discovered, scale, and lead firms within the first place.
My name to motion
The funnel is a helpful metaphor, however it’s not the entire story. If we wish to shut the gender funding hole, we should look deeper into the tales hidden between the information factors. Then, the query evolves from “what number of ladies founders are getting funded” to:
“What would our economy look like if every woman who wanted to build a company had the capital, support, and runway to do so?”
Writer’s observe
As somebody who has lived these dynamics, being a girl working in tech and an aspiring angel investor (thanks, Airtree), I see how advanced the ecosystem is.
The information issues. Sure! So do the lived experiences behind it. Our alternative now could be to construct programs that recognise each.
Sinéad Fitzgerald is a know-how and partnerships chief with twenty years of expertise at world firms together with Apple and Microsoft.
