Leaving money on the pitch: What VCs can learn from the Matildas about how to invest in women

It strikes me (pun intended) that venture capitalists have a lot to learn from the Matildas about how to invest in women.

There’s no doubt the Matildas’ success has captivated the nation both on and off the field. Audience records are being set at each new match, with numbers on Saturday night’s quarter-final against France the largest for any Australian sporting event since Cathy Freeman won gold at the Sydney Olympics. 

Outside of match times, we can see the signs of the Matildas’ success through record ticket sales, billboards and bus ads showcasing player sponsorships and unprecedented sales of merchandise. It is safe to say a lot of people are making a lot of money from this glorious moment in history.

What’s easy to miss is the amount of foresight (and investment dollars) that has been deployed over many years in order to bring this moment to life: from general ‘brand building’ to positioning soccer as a viable viewing option in a nation traditionally focused on different codes of football, to seeding girls’ competitions within community clubs and A-Leagues, and supporting players with sponsorships to help them get to the elite levels. 

There’s still a long way to go before we see true equality in football – the prize pool for last year’s men’s World Cup was almost triple what is on offer this year, for example – but you’ve got to give credit for the vision and foresight that made this moment possible.

Meanwhile in business, women founders are still stuck at the grassroots level, playing in a game built for boys, and hoping that despite the odds being stacked against them, they’ll be able to break through and achieve success.

There is plenty of data showing that teams of all male founders produce worse returns for investors, and yet they still win the lion’s share of VC money. Last year in Australia 90% of VC funding went to all-male teams, and one in three top VCs failed to invest in even one women-founded business. 

Not to be dramatic but the 41 female led companies in the S&P500 have outperformed the 459 male lead ones pic.twitter.com/uKtwnvMmCC

— Girls That Invest (@girlthatinvest) March 30, 2023

The time for nice words and positive intent is over. We need money – real actual dollars – to be flowing to women-founded businesses.

Most venture capitalists will tell you that they aspire to invest in more women founders, and many will even acknowledge the data showing that businesses with at least one woman founder perform better. However, when it comes to the actual investment decision where they ‘pick the winners’, they still default to what they think a ‘winner’ should look like. 

There’s simply no other way to rationally explain how VCs continue to direct so much money into all-male teams.

When the vast majority of our startup success stories have come from such a narrow demographic, it takes real awareness of cognitive bias to invest heavily in underrepresented founders. For venture capitalists, investing in women-founded businesses is going to feel like a leap of faith; but this is not that different from the leap of faith required to build soccer competitions for little girls 10 years ago.

There are plenty of ‘Matildas’ waiting to make us proud among the ranks of women founders, and plenty of money to be made by those with the foresight to back them.

In fact, when you consider that women-founded businesses produce statistically better returns, VCs are actually leaving money on the table for their investors if they fail to back women founders.

Kirstin Hunter is the managing director (NSW) at Techstars, the world’s largest pre-seed investor.