The Australian attempted to explain startups’ funding challenges without talking to any female VCs

What a depressive and ultimately frustrating read in today’s The Australian on startups and venture capital.

Depressive not just because it writes of the failure of startups to raise capital, but more so because it ignores the specific challenges faced by many founders in the Australian environment.

Although the article doesn’t cite anything other than anecdotal evidence, it does do one thing really well. It highlights the incredible challenges female founders face in the capital environment by its very structure.

Capital raising is a hard slog, and it should be. This summary of the why though ignores some of the most significant factors that create barriers to right-fit investment. And it’s not just that founders aren’t good storytellers, and it’s not just that founders *confuse* the definition of small business versus start-up.

The reality in the funding environment is there are systemic barriers to start-up funding for women, and articles like this perpetuate those barriers and support the status quo.

Capital for women remains elusive. The experts cited in this article are all men. For me, it’s that in one single photo, the challenges facing female founder is illustrated.

The article names Tractor Ventures Co-Founder Matt Allen, and shares a picture of him, but doesn’t acknowledge in the same photo stand his key co-founders. Aprill Allen and Jodie Imam are not even identified in the photo, let alone cited in the article as experts in capital raising.

Tractor Ventures Co-Founders Aprill Allen, Jodie Imam and Matt Allen as captioned in The Australian.

One of the most significant barriers to growing and starting businesses is access to finance. Women’s business starting capital (internationally) is 50% lower than men’s. It’s not just an Australian issue – for every pound of VC in the UK, only one pence goes to female-founded business.

The disproportionately adverse impact on women’s careers throughout the pandemic is well documented and will be felt for decades, and this extends to capital raising as well.  Since the pandemic there has not been a decrease in overall VC funding, however, since 2019, there has been a substantial drop in venture capital funding for women-led startups.

When seeking capital or to funds raise, female-founded enterprises suffer from “pattern matching habits”, where VCs fund what they usually/normally have and are risk-averse to funding “others”. What they “normally” see are not women and not mothers.

It’s one thing to be “re-educated by the market” but rather than accept this is the way things are, and startups just are not good enough for funding, why aren’t we changing the conversation about what the Australian market needs to start doing to make the market better for our economy as a whole?  

We need to be having constructive conversations about how VC can look, how we can educate early about capital and access, and how we can celebrate success and learn from other countries getting it right. 

Currently, only about 12% of decision-makers at VC firms are women, so substantially more women would need to enter this field to bring about change in traditional VC funding avenues. How do we increase the number of women who are in charge of the capital? Well, a good first start would be acknowledging the women already working in the space. A good first step is naming them in a photo, and seeking their input in any commentary about the investing environment. 

We need to be highlighting ways and examples to change the experiences and trajectory of funding for female founders and entrepreneurs. 

We need to change the tone of the conversation about capital raising for female founders. And importantly we should be advancing the normalisation of female VCs and the funding female founders.

Sally Branson Dalwood is the director of Sally Branson Consulting, founder of The Suite Set and co-Founder at FOMO Alerts.