The question is, how do we invest more in the right women-led ventures?
A 2021 study from the University of Auckland led by Dr Janine Swail suggests women founders are often dissuaded from the very idea of seeking external funding to grow their businesses. Without capital support, they are required to bootstrap, which limits their potential to scale their business.
Swail uncovered that women founders are not always exposed to the growing NZ investment ecosystem. Nor do they have angel investors in their professional networks, which makes it more difficult to begin their capital-raising journey and often takes longer than anticipated. Gender bias, both conscious and unconscious, poses a further barrier that some women have to overcome to gain legitimacy in front of investors and secure critical investment to grow.
Women are also less likely to consider becoming angel investors despite having the financial means and business acumen to do so. Women make up just 20 per cent of the angel investor community in New Zealand.
This is bringing all of us down because we are reducing our chance to foster our next cluster of export successes.
Angel investors play an important role in helping founders scale their businesses. Angels contribute not just with the injection of capital, but also the right networks and decades of business experience, which founders often lack.
SheEO is one organisation helping Kiwi ventures founded by women and non-binary entrepreneurs. Each year, five ventures are selected to benefit from a five-year interest-free loan from the pool of $1.25 million gathered through women supporting women entrepreneurs.
In late 2021 we welcomed Atutahi, BDÉT, Farm Plans, Kete Kai, and Supie to our network. They are creating better, fairer, more sustainable alternatives for New Zealand by eliminating pollution, ending hunger, and supporting other local businesses.
These wonderful wāhine toa are not only good at solving our society's many problems, but also outstanding at growing their businesses.
And the numbers speak for themselves. In 2020, New Zealand SheEO Ventures exported to more than 50 countries. On average, SheEO Ventures have grown by 84 per cent since joining the network.
So, here is my proposition for my fellow wāhine in 2022.
If you have an idea, do not wait until the time is right – do it, start a business, and seek investment from like-minded people in your community. Early-stage ventures are receiving more funding than ever before, and there is a growing community of angel investor networks focused on supporting women entrepreneurs in New Zealand – SheEO, ArcAngels, Enterprise Angels.
If you are like me – seeking opportunities to make an impact, join a network of angel investors. There are so many promising female-led ventures with potential for exponential growth, given the capital, networks and wisdom.
And if all the above does not feel right to you, just support the small, female-led businesses around you by purchasing from them and collaborating with them. Your support helps them scale at pace, get critical market feedback and build a network on which they can depend.
Many things are not in our control in 2022. But what is in our control is growing our pipeline of women entrepreneurs in New Zealand. Women continue to capture only a fraction of available equity investment. We can make a meaningful difference to our economy by backing female potential in business.
Evidence shows that women are under-represented in leadership roles, and their businesses are underfunded. Let 2022 be the year we collectively work towards changing this.
- Theresa Gattung is chair of Global Women, country lead of SheEO New Zealand, and funder of the University of Auckland Theresa Gattung Chair of Women in Entrepreneurship.
