Investing in women - but only with 1%

The Unconventional Ventures report is out and yet again we are being forced to report on such dismal figures like ‘1% of funding allocated to women in ‘21’ and the tight purse strings of female General Partners (GP). ‘VC funds with all-men GP teams have 4x the firepower (AUM) to invest in companies compared to all women GPs of venture funds.’

In the Nordics, all-men founding teams were allocated 88.2% of all capital deployed during 2021. Mixed teams secured 10.7% and all-women founding teams a meagre 1.1%.

The data was tracked by Dealroom.co and funding rounds assessed from 2017 to 2022 H1. Quite frankly if you are skim reading this article for the ‘good news’, unless you are an all-male founding team then you are really not going to find any. 

This is the fourth consecutive year Unconventional Ventures has analysed data on funding in the Nordics, France, Germany, and the UK. This year’s report covers the capital, the founders and the investors painting a broad picture of all stakeholders. This particular picture isn't pretty.

In fact, if you are one of the 'good doers' who are trying to make a real difference with impact companies then not even the climate crisis can shift thinking to the fact women might just be worth a punt on.

“Teams with at least one woman founder are now more than twice as likely to run an impact company. We need to seriously start considering the risks of not allocating proper funding to those within the ecosystem focused on building companies that drive positive change,” says Nora Bavey, General Partner at Unconventional Ventures.

This year Unconventional Venture have included data on how Government agencies, as LPs, allocate state capital based on the GP gender composition at the funds. 

“We’re happy to see an increase in the amount of women-led funds. Unfortunately, the data shows all-women GP teams are sharing the same 1% of capital. This means the AUM (assets under management) for women-led funds has not increased, even though the number of active funds have,” says Thea Messel, General Partner at Unconventional Ventures.

There is a smidgeon of good news for mixed teams – there is an increase in funding amounts. Sweden, Denmark and Iceland had the biggest cheques allocated to mixed teams both in angel/seed and early VC/series A stages but the same trend can be seen in France, Germany and the UK. 

Unfortunately, this trend did not follow through to all-women teams with the average round size 57% smaller at angel/seed and early VC/series A stages.

For the all-women teams that do raise decent early stage rounds there is a huge drop off in further rounds. 

Also reported is ‘founders from ethnic minority backgrounds experience additional obstacles raising capital, added to their initial starting point. E.g., an all-women founding team from an underrepresented group have double barriers.’

Statistically the UK & Ireland, along with DACH, see the largest share of total funding going to mixed and ethnic minority only founders - these are higher relative to the share of mixed teams in the region. 

It would appear that now women have broken the glass ceiling they must now contend with opening an ironclad vault. Let’s hope we have a different story to write next year.

Read the full report.