A group of 25 female general partners from different countries are enlisting the help of the European Commission, the executive branch of the European Union, to establish a €3 billion fund of funds to ensure equal access to capital for European female-led venture capitalists.
During an online event on Thursday, Laura González-Estéfani, founder and CEO of TheVentureCity, and Kinga Stanislawska, managing general partner and co-founder of Experior VC, handed over a report on the state of VC funding in Europe to Mariya Gabriel, the European Commissioner for innovation, research, culture, education, and youth, on behalf of the co-authors.
Entitled “Invest in Women NOW: The Time is Now for the EU to Equal the Stakes for European Women in VC”, the report aims to help the industry reach a point by 2025 where at least 30% of the available capital goes to women-led funds. The current figure is around 3%.
The general partners behind the campaign have total assets worth around €2.9 billion under their management and represent funds, in which “45% are female but only 8% of females hold real firepower.”
Gender disparity
Their findings highlight that only 10% of European VCs had a gender-mixed general partnership team from 2016 to 2020 and that just 1.7% of all capital went to female founders in Europe.
The report notes that the total estimated assets under management by women-led VC firms were €5 billion compared to €51 billion managed by the entire European VC firms during the four-year period.
In addition, the average fund size raised by women-led funds in Europe was estimated at less than €10 million compared to the €70 million average fund size raised by the European VCs in general.
“More diversity at the investor level leads to more diversity at the portfolio level. If we support women as the source of capital, we will see diverse results at a portfolio level. For that, we need coordinated initiatives. We can change the equation together. Awareness is key to changing the dynamics, the industry, and the world,” say the co-authors of the report.
For more innovation in Europe, according to them, there is a need for more projects that represent clean, green, medical, and education sectors with solid elements of deep tech “and female general partners are the ones who invest most in these projects.”
Only 10% of European VCs had a gender-mixed general partnership team from 2016 to 2020, and just 1.7% of all capital went to female founders in Europe.
Need to empower women
“We are at an amazing time in history where technology investments are going through the roof,” said Stanislawska, who is also the founder of European Women in VC, a community of nearly 700 senior VC women professionals and over 5500 followers that was instrumental in drafting the report.
She lamented that female general partners are still facing many challenges despite the current abundance of capital and investment opportunities.
“What we’ve discovered is that female and mixed teams outperform every time. Therefore, we want to make sure that women get the right seat at the table and are able to work to their full potential.”
González-Estéfani from TheVentureCity, another leader of the initiative, called it a “historic day” for the female VC community and expressed hope that it will change the status quo for the better.
Action plan
The group behind the campaign has proposed a number of measures to be taken toward this end, including the establishment of a European Fund of Funds of €3 billion to “anchor female-led VCs and growth funds by contributing up to 50% of the capitalization of those funds, up to a maximum commitment size of €100 million per fund.”
They also called for developing a tracking platform to make sure female-founded companies are being supported, providing grants or loans to address the lack of capital upfront to fund the general partner contribution, setting up relationship-building events for women-led VC firms and limited partners, and financial incentives to encourage investment in women-led funds.
‘Timely’ initiative
The European Commissioner expressed her “full support” for the “timely” initiative, noting that she believes highly qualified women can contribute greatly to the entire startup ecosystem in Europe and its economic recovery following the coronavirus pandemic.
“We have to act at all levels… and we need to work with men as allies,” Gabriel said and added that her team will analyze the proposals made and integrate them into the recommendations they make on a regular basis to the authorities concerned so that the necessary reforms can be introduced.
“We would like to make Europe in 2030 a continent with the highest growth of female tech founders, CEOs, tech, investors, and business agents, and it’s worth working for.”
Those interested in supporting the initiative can sign the related petition here. It has already received over 800 signatures from leading European and international investors, VCs, and limited partners.
Disclaimer: This article mentions a client of an Espacio portfolio company.
