The Billion Dollar Fund For Women secures $460m in pledges to fight gender funding gap | #VentureCanvas
Kristie Neo | DealStreetAsia – VC
A new initiative to address the gender funding gap is seeking to mobilise as much as $1 billion to invest in women-founded companies. Called The Billion Dollar Fund for Women (TBDF), the consortium has secured pledges of over $460 million from global investors including Gobi Partners, Golden Gate Ventures, Rethink Impact, Springboard Growth Capital, Backstage Capital, Different Funds and others.
The fund is led by managing partners Shelly Porges and Sarah Chen and co-founders Anousheh Ansari, Nadereh Chamlou and Anu Jain.
“This is the first time we’re seeing a consortium linking all venture funds in a single voice to invest in women. We know our bargaining position will be different in the eyes of institutional funds we have already been in talks with,” said Sarah Chen, Managing Partner, TBDF.
Chen added that TBDF had initially targeted $100 million in pledges for investments through 2020 but had upped its target after seeing the response from venture capital firms.
In the US, all-women companies received just $1.9 billion or 2 per cent of the total $85 billion invested by venture capitalists in 2017. Women-founded companies also often struggle to expand their capital base and increase their capacity to invest.
“Having ourselves experienced the challenges faced by other female founders and seeing latest research showing that women-founded businesses deliver higher returns, we are thrilled to be able to bring together our combined knowledge, experience and, most of all, networks in finance, technology, and entrepreneurship to mobilize capital for female founders and innovators,” said Shelly Porges, Co-Founder and Managing Partner, TBDF.
“As a female technopreneur I know how the funding challenge curbs the growth of female founded enterprises. The current institutions have failed to properly recognise the success rate of female-led companies and to understand their needs. TBDF’s campaign is the first phase of our ambitious plans to disrupt the current models,” says Anousheh Ansari, Co-Founder, TBDF.
In addition to raising capital for women-led companies, The Billion Dollar Fund for Women also aims to inspire larger investors to see these funds as an opportunity to diversify their portfolios, especially in areas of gender, environment, social and governance.
“The $1 billion target includes re-investment efforts from an initial $100 million through a ripple effect. The goal was to do this within 2028, but I believe it will be earlier than that, ” said Chen.
Four Questions with Sarah Chen, Managing Partner, The Billion Dollar Fund for Women (TBDF)
1. How did the idea of TBDF come about?
If you look at the founding team, all of us have played one part or another as venture capitalists, entrepreneurs, in philanthropy and international development. Over the years, we have seen VCs fall short when it comes to women founders. We saw an opportunity to coalesce to change the paradigm.
One of the key issues we identified is the lack of ability to continue to invest, despite the best intentions. We believe that past efforts have been fragmented capacity to pump in continued capital has been lacking without larger backers such as institutional funds.
This is the first time we’re seeing a consortium linking all venture funds in a single voice to invest in women. We know our bargaining position will be different in the eyes of institutional funds we have already been in talks with.
2. How has the response been like so far?
The response has been overwhelming! Our initial goal was $100 million pledged to be invested through 2020, and now we’ve hit $460 million. The $1 billion target includes re-investment efforts from an initial $100 million through a ripple effect. The goal was to do this within 2028, but I believe it will be earlier than that.
3. What is your investment focus, apart from investing in women-led companies?
Our focus is in the following areas:
– Increase investment into women-founded companies
– Include women founded companies in deal flow and highlight to investment committee
– Provide feedback to women founders we decline
Our ticket sizes are between $250,000 to $10 million or more depending on the funds who sign our pledge.
What we are addressing the the unconscious bias in the investment community. The larger institutional investors like pension funds, sovereign wealth funds tend to have a legacy investment model. They tend to invest in people with an attributable track record, which creates a vicious cycle if you think about it. What happens is that they don’t invest in smaller funds, especially those that are smaller than $100 million. The challenge is further compounded when women entrepreneurs are already facing difficulties finding the right backers.
What we want to do is provide a platform through a $1 billion fund to highlight the successes of all these funds and encourage larger institutional funders to break the mould to back what really matters.
4. How different are you from SheEO? They’re also raising $1 billion for women-led entrepreneurs.
We are not an angel network or a non-profit, like SheEO. I believe we play a bigger game of catalysing venture funds to create impact.
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