Revisiting the dynamics of raising capital for start-ups and growth companies over this series of articles, has reminded me of the low statistics of women led businesses able to obtain venture capital (VC) funding. Less than 5% of VC funding worldwide are to women led businesses, and even less for women of colour.
On the flip side though, a study by Boston Consulting Group found that women led start-ups generated a return of 78 cents in the dollar versus male led start-ups returning just 31 cents in the dollar. These are good statistics! Although, the number of women led ventures applying for funding may be lower, which may lead to these statistics. (Even that itself, is an issue worth addressing).
LIFTOFF ARTICLE SERIES: CAPTIAL RAISING
In 2018, I learned of SHeEO and became an ‘activator’, which I wrote about here. It was exciting and refreshing, finally seeing a female organisation with a purpose. Personally, I like that it is not about ‘feminism’ – this is about helping remedy under-representation.
So, what is SHeEO?
- Women ‘join’ by becoming ‘activators’.
- ‘Activators’ contribute $1,100 whereby $1,000 forms part of a $500,000 loan, and $100 is for administration.
- Ideally there would be 500 activators which provide for a $500,000 loan.
- This loan would be provided to five women led ventures on an interest free basis to be repaid over five years.
- Any repaid amounts are recycled into new ventures.
- An ‘activator’ can only be a woman, but men are free to fund this for the women in their lives / workplaces.
What are the requirements for a venture to apply?
- Majority women-owned and majority women-led
- Senior Leadership / CEO position is held by a woman
- Generated $50k to $2m revenue over a year
- Represents a new mindset, model, or solution for a better world, and
- Is scalable.
So why is this important in the venture capital space in New Zealand? Given the statistics mentioned earlier, it is a good idea to have an organisation like this which is focused on women led start-ups. Over time, it will build increasing confidence in this space for women. Success breeds success. It is a forum that is supportive and provides a network of more than just money, even for the ventures that may not ‘win’ the funding that year. This is not a fund, as it is not just limited to providing support and expertise to only the ventures that are awarded funding. Into its fourth round of venture funding (which will close in mid July this year), the statistics speak for themselves. Fourteen out of the fifteen ventures are still growing strongly (one was a social enterprise). Some of those have raised further rounds of capital and scaled Internationally. Some specific examples are:
The Better Packaging Co, which operates in the USA and Australia. They have raised two further rounds of capital and have secured significant large corporate clients for their sustainable packaging products.
Jobload (technology allowing seasonal workers to book work with producers who provide good working conditions), has also completed its second round of capital raising, and continues to grow.
Guardian Angel Security specialises in the lone worker sector and has delivered solutions to protect over 2000 workers in Australia and New Zealand including Worksafe NZ, Waikato, Northland and Hawkes Bay Regional Councils plus many City Councils, as well as Suncorp Group and Midway forestry in Australia. Petra Hakansson from Guardian Angel Security will be sharing her story with us at our event in June.
As evidenced by these examples, SHeEO also actively encourages ventures to ‘do good’ and imagines a world where running a business and ‘doing good’ are not mutually exclusive.
SHeEO is well on its way to making a noticeable impact in the women led venture capital space. The next step would be to encourage more ethnically diverse activators and ventures. There are definitely challenges for women in this space, and can be magnified for women of colour. However, if any country can achieve a pathway to success and growth for these women and ventures, it is New Zealand. SHeEO is one way to help.
If you are interested in learning more about SHeEO and becoming an activator, or are in a position to reach potential ventures, please register your interest with Joshna at firstname.lastname@example.org. We are hosting an event on 23rd June 2021, where Theresa Gattung will speak more about SHeEO, and one of the successful ventures which received some of the loan funding, will also share their story.