After pay gap bombshells, Victorian business leaders consider startup investment bias

The release of groundbreaking gender pay gap data has shaken the startup world, with Australian founders and corporate luminaries calling for new ways to measure how venture capital does — and doesn’t — reach women founders and women-led startup teams.

The Workplace Gender Equality Agency (WGEA) on Tuesday revealed how median pay is skewed towards men across Australia’s largest companies, along with data showcasing the pay gap within individual organisations.

Those findings rippled through LaunchVic’s pre-International Women’s Day breakfast, held on Friday, where speakers asked if a similar initiative would benefit the startup sector.

Some venture capital firms have committed to being more open about the breakdown of their investments, and the proportion of funding that makes its way to projects founded by women and mixed-gender leadership teams.

Initiatives like Cut Through Venture also endeavour to report the share of capital raised by founding teams with at least one female member.

Cut Through Venture last year said women co-founded startups attracted only 18% of total VC funding.

That is despite one-third of all Victorian startups counting at least one woman founder.

Although there are clear indicators VC funding is skewed towards men, there is no startup investment equivalent to the WGEA wage gap data, which is underpinned by legislation making it compulsory for businesses with 100 staff or more to turn over their pay gap figures.

Kate Pollard, co-founder of employee benefits platform Circle In, asked the audience if that should change.

“Why shouldn’t we put the same lens that is being applied to businesses, to be transparent on the gender pay gap, [to] VCs and investors?” she said.

“It would be great to see the same levels of reporting transparency applied, to actually see how the investment is being distributed.

“I know at the moment it’s kind of voluntary,” Pollard continued.

“But I think what comes with transparency is action… We’re big advocates for that.”

Attendees at Friday’s LaunchVic event. Source: Tim Carrafa / LaunchVic.

Accurate measurements and transparent reporting are vital across all initiatives designed to improve gender equality in the corporate sector, said Elana Rubin, board member of the Reserve Bank of Australia, who previously served as chair of Afterpay through its record-breaking $39 billion sale.

“We can’t talk about equality in general,” she said.

“We need to actually collectively embark on programs that will change the die.”

The initiatives that work all have clear and measurable targets, Rubin continued.

“Numbers really matter,” she said.

“We know diversity and equality aren’t going to be achieved by simply talking about it in general terms, or just having one female founder get funding.

“We need to really be very brave about establishing targets, be very diligent about measurement, and be very transparent about numbers.”

The establishment of a formal startup data collection system on par with the WGEA would be a massive task, likely requiring the retooling of existing government data collection systems, and a good amount of political goodwill.

Nevertheless, if there is a time for the startup sector to dream about it, it’s in the leadup to International Women’s Day 2024, which carries the official UN theme: ‘Count Her In: Invest in Women. Accelerate Progress.’

Beyond the discussion of new data-gathering ideas, the event centred on the work of the Alice Anderson Fund, the $10 million LaunchVic sidecar fund offering matched investments to women-led startups.

It has invested $6.9 million into 32 women-led start-ups, activating a total of $40 million in funding when accounting for private sector investment.

International Women’s Day falls on March 8, 2024.