Recent research has revealed that women entrepreneurs are more likely to experience funding gaps. As talks on gender pay gap becomes more prominent, less is known regarding the gender gap in the investment community. It was stated that companies backed by women raise 50 percent fewer investments compared to men.
Billion Dollar Fund for Women aims to change those statistics. Shelly Porges is one of the co-founders of a new campaign that acts as a global consortium for venture funds to pledge more investments in companies founded by women.
"This is really important because all over the world we see a major funding gap for women. You know many of us are aware that in many countries there's a gender pay gap but what we don't talk or think about is the gender investment gap and why is that important to anybody but the women? It's important because we are missing out on great innovations that can help the world. We find that women as entrepreneurs are quite mission driven and they don't just primarily want to get rich, that's not just what motivates them. What motivates them is solving important problems," said Shelly.
As part of their official launch, the consortium has secured over 460 million US dollars in pledges, including from Chinese venture capital firm, Gobi Partners. The firm is one of the largest VC firms in China and has branched out to many other parts of Southeast Asia. Gobi Partners has pledged to invest 50 million US dollars in women entrepreneurs by 2020 in various industries including e-commerce and fintech.
Chinese venture capital firm, Gobi Partners, is investing 50 million US dollars in women entrepreneurs globally by 2020. /CGTN Photo
Sarah Chen knows what it's like to be on both ends of the approach. Having worked in venture capital firms for a long time, Sarah joined the team with a vision of changing the paradigm of how venture capital firms approach women-founded enterprises.
"Asian businesses driven by female founders are really changing the game. As of the last four quarters, just take a look at Alibaba. We talk a lot about Jack Ma but do we remember the women behind him or beside him? Peng Le, she raised 14 billion for N Financial and now she's the CEO of Lazada. She was really responsible for driving that. We are right now in a very interesting time for Asia, an emerging market where we are getting a little bit more digital savvy and we are also getting richer and more educated and it's an unsaturated market where things can grow tremendously with one single innovative idea," said Sarah.
Sarah believes those ideas are what makes Asia an extremely attractive market for investors. However, she said there are still plenty of challenges and obstacles that stand in the way of women entrepreneurs to this day and it is what she calls an unconscious bias in the investment community.
"What we are fighting for right now through the Billion Dollar Fund is what I personally believe, it's not a pipeline problem. Women are starting businesses twice as much as men but we are not getting there because what we are lacking is access to capital," said Sarah.
The Billion Dollar Fund aims to draw attention to that by slowly closing the gap between private, public and institutional investors globally creating a much bigger impact.