So why is this still a problem?
“It’s always hardest in the beginning, when no one believes in you. Once you have a couple of proof points, everything is easier. Angel investors are very important. They are very used to investing into a specific set of entrepreneurs and men fit that box more easily: technically competent, almost arrogant, wild vision (think “Elon Musk”). Fewer women fit that role. That first person who believes in you is so important, and for women that first person is less often there.” Stephanie Sy, CEO and Lead Data Scientist, Thinking Machines.
UNICEF’s Innovation Fund is not alone in facing this challenge. According to data, only 2% to 10% of VC funding goes to female-led companies globally. What else (have we heard) is going on?
- - Small pipeline … or a power problem -- many VCs quote that the gap is because the number of women- founded tech companies is still low compared to male-led companies, and thus the pipeline to choose from is smaller. However, as the researcher Sheila Herring argues, it’s not a pipeline problem, it’s a power problem. In emerging markets, too few female-led companies are accessing first stage financing: a study covering over 8,000 startups that applied to accelerators in emerging markets found that nearly half of the businesses had a female co-founder. However, at the post-accelerator stage, the numbers had dropped drastically: only 13 percent of the companies had female leadership.
- - Unconscious bias, coupled with the fact that most VC funders are still male. A Kauffman Fellows study found that women tend to invest more in female-led companies than men do, however, the percentage of women in angel investors is still low. Women and men also get asked different questions by VCs, forcing women to focus more on safety, responsibility, security, and vigilance in their pitches, ultimately affecting how much funding they get.
- - Lack of mentors, role models and networks in the field for female business leaders.
Our goal: From 2019 and onwards, 50% of our new portfolio companies will be female-led.
During a 3-day Data Science Cohort workshop in New York, UNICEF Innovation Data Scientist, Elisa Omodei mentors startups working on Data Science solutions.
UNICEF’s Innovation Fund is a venture fund set up to invest in startups building early stage frontier technology solutions in emerging and developing economies. Since its incubation, the fund has aimed to build a diverse portfolio and to address existing inequities through its investments. While the UNICEF Innovation Fund’s investing team is largely female, this is a challenge we haven’t been able to crack.
As ex-Facebook product manager, Bo Ren wrote, “If diversity were a product that launched 2 years ago it would be considered a failure.” We at the UNICEF Innovation Fund are determined to fix the balance for our fund and show to others it can be done.