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Business
Funding network supporting only self-identified women-led businesses and non-binary entrepreneurs with nearly 100 percent success rate aims to disrupt traditional capital raising for good
Kiwi entrepreneur Lisa Booth launched her Waikato-based Kete Kai food delivery social enterprise last year after seeing a serious need for affordable food kits for those in detention.
The idea had been in the works for six years, as Booth’s ultimate goal was to end poverty by 2030 in Aotearoa. But what delayed the launch is access to finance.
“We started last year because when Covid hit we thought the cheapest way, and the easiest way to feed people is to do it, like really good meal planning. But raising capital is the hardest thing, â€Booth says.
Kete Kai is working with the Department of Human Nutrition at the University of Otago to create emergency meal kits to keep prices affordable.
“We raised some money to spend the year saving, but this year I raised around $ 100,000 from my family and friends.
“I gave up my corporate career at the end of last year because I really wanted to focus on this full time and realized I really needed help and to find a network of women. because we are a minority in technology and leadership. “
Theresa Gattung, business veteran and co-founder of NZX-listed meal kit company My Food Bag, said that, impressed with Booth’s social enterprise, she reached out to her on LinkedIn and encouraged her to apply for funding SheEO, a nonprofit venture capital organization supporting women. -identification of non-binary entrepreneurs through interest-free loans and mentoring.
The company became one of five startups to secure a five-year interest-free loan from a pool of $ 1.25 million raised through donations from generous Kiwis seeking to support women-led businesses.
Gattung says that while access to capital for women-led businesses grew in New Zealand, with Icehouse Ventures creating the ArcAngels fund supporting only women-led businesses, there was still a long way to go.
“Women are tested even more often and often ask ‘Will you be able to do this?’ “How are you going to handle this”. It is a collective unconscious bias.
In 2019, 2.8% of funding went to startups led by women, and last year it fell to 2.3%, Crunchbase The figures spectacle.
“Our structures are designed to be biased against anyone who is not a white male Harvard dropout.”
– Vicki Saunders, Founder of SheEO
Gattung introduced the SheEO investment model in New Zealand four years ago after hearing Canadian founder Vicki Saunders talk about it at a conference.
Since 2017, the SheEO Aotearoa branch has raised $ 1.25 million from 1,100 donors.
To be eligible for funding, businesses must be majority owned and run by a cis or trans woman, a non-binary, gender fluid or gender non-conforming person, have revenues between $ 50,000 and $ 2 million, and be working to building a business with positive social impact – following the United Nations sustainability goals.
At the start of each funding cycle, each donor puts $ 1,100 into a fund to provide interest-free loans to five businesses.
Donors vote to select five winners from a shortlist of 10 companies they believe should get interest-free loans and mentorship from the fund.
The pot fills up as entrepreneurs pay off their loans.
Previous recipients of SheEO funding include zero-carbon beverage company Chia Sisters, vintage products company Hello Cup, and recycled plastic packaging company Better Packaging.
According to SheEO’s 2020 Impact Report, the last 15 winners exported to 50 countries, created more than 100 jobs between them, and generated around $ 12 million in revenue.
So far, all of the businesses except one social enterprise that the network has supported have paid off their loans quarterly.
“You won’t get a venture capital portfolio with a 100% success rate, but it’s very close to that. We trust the wisdom of women, not a group of experts, â€says Gattung.
SheEO founder Vicki Saunders is a former venture capitalist who implemented the new investment model to level the playing field for women when it comes to raising capital.
“About 2% of invested capital goes to women, who represent 51% of the population. We still have a very long way to go before that even happens, I don’t think that’s fixed in my lifetime, â€Saunders said.
“Our structures are designed to be biased against anyone who is not a white male Harvard dropout.”
She says there has been a lack of imagination on how to invest differently, and she hopes SheEO can be an “experiment” to transfer capital to those who have been marginalized.
“It’s showing people, it’s possible, we can do things differently. We created this society so that we can change it too.
Saunders, who spoke to Newsroom from Toronto, said North American companies were facing a major shift in the workforce. Record-breaking month-to-month resignations qualified as “big resignations†are also changing the entrepreneurial landscape.
Saunders says Covid has pushed workers towards entrepreneurship and entrepreneurs to rethink the types of businesses they want to run.
“All of this, working 24/7 and always being on is completely exhausting, and Covid has just taken that to the extreme. “
She says that over the past few years, entrepreneurship has acquired a toxic culture of celebrating work over health.
“I remember years ago I went to this event, and this kind of famous guy in a hoodie, got up in the front and said, ‘How many people have slept less than eight hours last night? ‘ And all these hands went up like it was a badge of honor.
Saunders believes that over the past year more entrepreneurs have reconsidered their growth plans.
“Entrepreneurs wonder if they really want to grow? Maybe having a turnover of $ 5 million per year with 15 employees who are very well paid is what aligns best.
“We’re going to see a lot of different models of success, not just one story. “
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