Exploring the avenues

• Author: Castellano, Letizia; Skonieczna, Agnieszka
• Pages: 11-16

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5. EXPLORING THE AVENUES

5.1. INVESTING

The first key to change is increasing the amount of financing flowing to female-led companies.

Female entrepreneurs can be supported in a more systemic way through general financial products,

such as guarantees, or equity financing through funds that invest with a gender lens. This could be

achieved by setting indicative targets and/or incentives. Such funding will ideally be combined with

other support activities and capacity-building for financial intermediaries (see section 5.2 and Box 2).

New and targeted approaches could also be explored for crowding-in female investors and

gender-diverse investments (see Box 2). A small part of the fund industry is specifically dedicated to

products or funds that embrace and support gender diversity, but research shows that such a focus

could generate higher returns and benefits for a more sustainable financial system. Options for

supporting women in the VC industry and increasing awareness of female and gender-sensitive

investors could include:

• a dedicated investment programme geared to support gender diversity in VC and private equity

funds, and among business angels. The programme would support funds that are female-led

and/or that target gender diversity in their investment strategy;

• a co-investment fund with female business angels; and

• alternative and innovative actions based on new developments in the financial markets,

e.g. crowdfunding, social impact bonds, etc.

Box 2. HIGHLIGHTS FROM STUDIES AND EU AND COUNTRY MAPPING

Into the margin! Women and microfinance in Europe (a new study by the Laboratory on Gender

Diversity and Gender Inequality of the U niversità la Sapie nza (2018)) shows that microfinance institutions

that focus on women are more likely to target disadvantaged clients. Moreover, they predominantly have

non-profit status and appear to pay more attention to social inclusion and poverty reduction. They face

higher operational expenses, which might indicate that more effort is required on the intermediary side to

reach out to women.

The Competitive Start Fund for Female Entrepreneurs (operated b y Enterprise Ireland) aims to

accelerate the growth of female-led start -ups. It provides up to €50,000 for a 10% equity stake and a wide

range of other support services. The investment is released in two tranches: the first tranche is released

when successful applicants confirm additional new cash investment for equity of €5,000; the re mainder is

provided as the business receives blended learning support, business coaching and networking s upport.

TheNextWomen (NL) provides female founders and investors with access to knowledge, capital and

networking opportunities. It is a network of female founders, investors a nd professionals designed to build a

strong community and drive cult ural change. It runs TheNextWo men Fund, which offers a platform for

joint investments by female investors.

Portfolia (USA) is an investment platform and a family of venture funds created to enable investors to

diversify i nto up to 1 0 high-potential start-ups and growth companies. It is designed to engage investors

seeking managed earl y-stage or alternative private investing and provide them with ‘learning by investing’

experience. Its overall investment strategy is focused on investing primarily where modern investors –

especially women, minorities and millennials – make markets as buyers, builders and influencers.