Despite clear outperformance, women innovators lack access to capital. We rallied the venture community to pledge $1 billion towards women-founders – and this goal was met in under 9 months! Now, we’re going BEYOND THE BILLION – focused on driving capital to and with venture funds investing into women, to drive returns through diversity.
The Billion Dollar Fund for Women (TBDF) was launched at the World Bank meetings in Bali in October 2018 with an audacious goal of catalyzing $1 billion dollars into the hands of female founders globally, addressing the gender venture investment gap where women were receiving only 2.2% of all venture capital funding. In less than a year, TBDF mobilized a global consortium of more than 80 venture funds committed to investing $1 billion dollars in women-founded companies.
Building on this momentum, founders Shelly Porges and Sarah Chen-Spellings launched Beyond The Billion (BTB) to catalyze capital deployed to and with these venture funds, and ensure continued investment by mobilizing limited partners (LPs) and connecting them to general partners (GPs) who invest in venture-backable companies founded by diverse women.
Launched to address the gender venture funding gap where female founders were only receiving 2.2% of venture capital, the campaign was the first-of-its-kind global capital commitment campaign focused on gender-lens investing, a bold measure to inspire venture capitalists to pledge to invest more into female-founded companies.
This report, published with support from Pacific Western Bank, Mastercard, Bank of America and Motley Fool Ventures, found that the consortium deployed 61% of their pledged amount in just two years into almost 800 companies—nine of which were recognized as unicorns at the time, with the remainder expected to be deployed by 2023. An additional analysis from a sample size of 479 of the deals tracked by the consortium’s data partner,
PitchBook, showed that these portfolio companies with female founders, have gone on to raise more than $4 billion within the timeframe of the 2018-2020 pledge campaign.
This report presents both qualitative and quantitative data to specifically answer three core questions:
LP investors, even those committed to investing in diversity, must re-engineer their processes to increase the diversity of their portfolios.
A mismatch exists between legacy LP structures and expressed goals to diversify portfolios showing that systemic bias requires systemic solutions. Despite the best of intentions to back both diverse fund managers and those who invest into diversity, LP investment profile constraints such as check size and track record requirements hinder the ability of emerging fund managers to attract capital.
The issues faced by general partners (GPs) mirror the issues of LPs with systemic barriers being a core.
There is no “pipeline problem” when it comes to funds seeking female founder dealflow.
Rather, fundraising is by far, one of the biggest challenges faced by fund managers investing into female founders.
Fundraising while a female founder, is still an experience mired in systemic bias.
Female founders interviewed shared how they had experienced biased lines of questioning and noted how the vast majority of investors’ examples of past patterns of success were almost exclusively referencing male founders. They were encouraged by encountering investors who recognized the opportunity to invest in female founders as a chance to improve their returns and who had committed to this as part of their investment strategy.
“It is now a well-known fact that diverse allocators tend to allocate more capital to women and diverse founders compared with non-diverse allocators. In my role as head of manager selection, we have focused on looking at the diversity of the investment managers who are allocating capital to women and diverse founders. Our clients, both individual and institutional, are demanding greater transparency about how their capital is being allocated.
We are of course being driven by this demand, but also by our belief that it is important to:
1) ensure that diversity across one’s portfolio not only relates to asset class and sector, but reflects the full universe of investable businesses
2) provide access to businesses that are transformative to our economies and communities and
3) provide clients with access to the returns that women and diverse owned founders can generate. To this end, we have doubled down on efforts to not only source investments that reflect Bank of America’s $250mm+ commitment to inclusive development, but have incorporated DEI criteria into our investment conviction in the managers in whom we entrust client capital.