Female representation in venture capital investment is crucial for female-led businesses to thrive, according to a recent report from Slip founder Tash Grossman.
The retail technology app CEO said increased female representation in the venture capital sector was the key to unlocking the potential of businesses started by women, and to narrowing the gap between male and female-founded companies.
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The survey found that for every dollar invested in female-led start-ups, twice that amount of revenue was invested in male start-ups, which Grossman linked to a lack of women in venture capital positions.
According to the report, female business founders were three-times more likely to receive funding from venture capital companies headed by women. However, women currently make up a mere 13% of senior leadership roles in the industry, with many firms discovered to have zero women on their investment teams.
“Around the world, venture capital has always seemed like a ‘boys’ club’ and as we look to the future, investors need to show that they are willing to adapt if we are to encourage the creation of more female-founded businesses and reap the economic rewards of this,” said Grossman.
Grossman’s Slip app recently gained £750,000 in a fundraise supported by a slate of female investors, including Dr Pamela Walker, who pointed out the emerging body of research in support of the impact gender and racial diversity have as a major driver of financial performance in companies across the international spectrum.
“From my perspective as an investor, I believe everyone should have equal access to capital and diverse teams are able to think both critically and creatively with an instinct to align, decide, and act quickly which in turn helps them to become more successful,” said Walker.
“Diversification is a core tenet of investment. Having a diverse portfolio means targeting more diverse markets with a different lens and unlocking access to innovation.”
“Investors that pull this mindset through to funding will out-perform the rest.”