Blackbird explains its recent male-founder dominated investment announcements

Back in July, 13 of Australia’s most prominent VC firms committed to disclosing data related to their funding of women-led businesses. The idea was for this transparency to result in more support for women in the Australian startup ecosystem.

One of the big names on this list was Blackbird Ventures. Just a couple of months earlier it had published its own blog post by from head of impact Kate Glazebrook and partner Nick Crocker, offering their personal commitment to investing in more women founders. This lengthy piece delved not only into its own goals for gender diversity in its investments but the importance of diversity within its own ranks.

In October, Kirstin Hunter — the managing director of TechStars NSW — wrote a column for SmartCompany exploring money left on the table in VC land. Hunter pointed out that at the time, Blackbird had publicly invested in seven startups in a row with male founders since the July pledge.

Just shy of six weeks later, that number has ballooned to 11 and includes the likes of Darwinium and Heidi Health.

So what gives?

Blackbird says 23% of its core fund investments have had a woman founder

It’s undeniable that 11 investments into all-male founding teams in a row is jarring — particularly after such a loud commitment to bolstering diversity in the Australian startup ecosystem.

It is also surprising, considering that between July 2022 and March 2023, 37% of companies that pitched the BlackBird Investment Committee had at least one woman on the founding team.

However, not all VC investments are made public. And that can be for a number of reasons, such as a business being in stealth mode.

SmartCompany understands the gender split in Blackbird’s last 11 publicly announced investments are not representative of its broader funding activities.

Speaking to SmartCompany, Blackbird said that — despite appearances — it has invested in 22 companies from its core fund since June 2022. At the time of writing, ten of those have not been announced publically. And of the total investments, five of them have at least one woman on the founding team.

This works out to be 23% of the total pool over the last 18 months and is above the industry average of 19%.

“It’s worth noting that we don’t dictate when a company announces its raise,” Alexandra Gifford, chief of staff for investments at Blackbird, said.

“However, the recent string of publicly-shared investments into male-founded companies represents the type of data set that will hopefully become increasingly anomalous as we continue to commit to moving the needle on more investment in women-founded companies.”

Blackbird also said that some of its recent investment announcements have been follow-on investments, as opposed to new investments.

Its newer investments will provide a “truer indicator of progress within the ecosystem today,” Gifford said.

Blackbird says the sector needs more transparency for gender diversity to improve

SmartCompany understands Blackbird looks at monthly numbers for pitches, as opposed to performing a postmortem at the end of the year.

After receiving no Investment Committee pitches with women founders across May and June, SmartCompany understands that Blackbird worked with the team at an individual level to improve those numbers in subsequent months.

What resulted was a significant uptick in pitches from women founders across July to October, ranging from 20 to 50% each month.

According to Nick Crocker, a partner at Blackbird, gender diversity in funding is a multifaceted issue — and one that requires more transparency in the sector.

Crocker says that this is something the organisation has committed to through ongoing reporting, as well as internal and external goals that it has set for itself.

One goal is to have 40% of startups come to the Investment Committee with a woman or non-binary founder.

Crocker also reiterates the importance of initiatives and programs to help get more diverse founders through the door as early as possible in their startup journey.

“This is where our programs like Giants and Foundry are showing encouraging signs of progress right now. In our most recent Spring cohort, 55% of our Giants companies had at least one female or non-binary founding member and 40% of our mentors were women or non-binary,” Crocker said.

Giants is a program that is aimed at mentoring early-stage founders, whereas Foundry focuses on PhD and research students.

“We have made two investments into women-founded companies directly from our Giants program. And in our most recent Foundry cohort… 50% of teams have at least one woman or non-binary founder.”

The importance of feedback from people with diverse backgrounds

Internal biases are a core discussion across the entire ecosystem when it comes to diversifying investment into startups.

Sure, it feels like a tired topic. But the numbers reveal why it’s still a critical one. Cut Through Venture’s latest report found, as always, disparity when it comes to investment into male and female founding teams.

This time around it showed that 97% of Series B investments made during Q3 of 2023 were into all-male teams. Those numbers dropped in earlier funding stages, but even at pre-seed it sat at 67%.

We also know that in general, when we see an uptick in funding for women, it is often due to a few big raises by established ‘unicorns’.

And so one could argue that it is fair to keep asking what factors or biases could be contributing to this. What are VCs doing internally to dissect their own biases to change the outcome?

“Internal biases affect all of us on some level, whether we’re conscious of them or not,” Gifford said.

“For years now, we’ve implemented and used a blind polling system to collect the investment team’s views in written form to encourage healthy debate and diversity of thought around decision-making,”

According to Blackbird, it also seeks feedback from existing founders in its portfolio, as well as those who pitch to the Investment Committee — even if they’re unsuccessful.

“We invite every founder who has pitched to us to complete an NPS as well as those who we meet and pass, which gives us a read on their experience and whether they would recommend Blackbird as an investor.”

Of course, there’s always more work to be done. The third-party statistics are evidence of that, as are instances like Blackbird’s investment announcements over the past few months. Supposed anomalies are less likely to happen when the landscape is naturally more diverse.

And while gender is still a critical consideration in the startup space — despite how draining this fight continues to be — it’s not the only one. Here in Australia, the space continues to be overwhelmingly white, for example.

It’s SmartCompany’s understanding that gender is the key diversity metric that Blackbird is actively focused on in terms of its official goals. And that’s not to say that it — or any other VC out there — isn’t striving for things like racial diversity both internally and externally.

But the numbers, and faces, don’t lie when it comes to how the startup space in Australia looks right now. And it is a disparity that VCs have the power, and cash, to change.