Hello, boys: why investing in women makes sense

Edie G. Lush says women have a strong track record as entrepreneurs and managers, yet struggle to find support from Britain’s male-dominated venture capital community

Women are under-served by the venture capital community,’ Herta von Stiegel, executive chairman of Stargate Capital Investments, told me at a recent Pi Capital lunch. I’m not entirely surprised by her comment, but I’m intrigued enough to investigate further.

The figures back up von Stiegel’s statement. In the UK, according to Management Today, about 25 per cent of the top 100 entrepreneurs are women. Yet less than 2.5 per cent out of a total of €3.5 billion of VC funding in the UK and Europe is going to companies with a female chief executive. The numbers are little better in North America. Nearly half of all privately-owned US businesses are at least 50 per cent owned by women; four out of five start-ups in Canada are run by women; US businesses owned by women have a two-year success rate of 80 per cent, well over the national average of about 50 per cent. Yet just 5.7 per cent out of a total of more than $20 billion of VC funding in North America goes to companies with female bosses.

Von Stiegel’s colleague Gita Patel looked at these figures and saw an opportunity. She founded Stargate Capital’s Trapezia EIS Fund – the first Venture Capital programme in the UK dedicated to investing in women-focused businesses. Stargate closed Trapezia EIS at £4.5 million and Patel and von Stiegel are now half way through raising £50 million in funds for Trapezia II. All the companies Trapezia II will invest in are led, directed or substantially influenced by women, or provide a product or service primarily to women.

As I speak to von Stiegel, it’s clear that she isn’t in this business as a matter of philanthropy. Quite the contrary, she thinks investing in women makes good business sense. ‘Women in Europe represent an incredible market opportunity,’ she says. Some impressive facts and figures follow. European women have the highest GDP per capita worldwide, a life expectancy of 80 years, and are well educated. Furthermore, they drive 70 per cent of household spending decisions and 10 million of them are self-employed or run their own businesses.

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