Down under game changer for tech start-ups

Women, especially women of colour, still receive a tiny proportion of venture capital, but Australia can fix this say girl geeks Shruti Shah and Sydney Thomas.

Shruti Shah and Sydney Thomas, Geek Girl Academy.

Women, and in particular women of colour, still receive a tiny proportion of venture capital, but Australia has a huge opportunity to right the wrongs of other jurisdictions according to industry veterans and self-described girl geeks Shruti Shah and Sydney Thomas.

Shah, who is currently entrepreneur in residence at Silicon Valley Bank, which has helped fund 30,000 start-ups globally, tells The Australian that the amount of funding going to women and under-represented minorities on a global scale is devastatingly low.

“Australia has a real opportunity, because your ecosystem is still so young. You can get ahead of the problems in a way the US has not,” she says. “A number of women we met on our trip down under talked about the bias that does exist in the system. They feel they have to work twice as hard for the same results.

“There’s a sentiment out there, especially when it comes to raising capital, of ‘is it worth it?’”

Thomas is a senior associate and head of operations at ­Precursor Ventures, a seed stage venture capital firm. She says that globally, things aren’t getting better for women when it comes to ­finance for their tech companies.

“The numbers just aren’t changing that fast,” she says. “If you look at where venture capital went when it comes to women and women-led companies, it was flat between 2017 and 2018.

“Changes are being made when it comes to more female partners at venture firms, but in terms of where capital is going there is yet to be this critical mass of women to the point where they feel comfortable taking these kinds of investments.

“Women are still yet to feel they have a seat of the table.”

Thomas says there is still an implicit bias when people — and in particular investors — think of what a great CEO looks like.

“There aren’t a lot of great ­examples of women, or especially women of colour, who have built billion-dollar companies,” she says. “And because we don’t have those examples, they expect women or women of colour just aren’t capable, which is not true.

“People have to take an extra step in their mind for women and women of colour and women ­before they invest. They don’t want to take the extra risk.”

Melissa Widner is a general partner at NAB Ventures, the bank’s venture capital arm. She has seen the start-up ecosystems in both the US and Australia, and says when it comes to women, the numbers are still dismally low.

She’s encouraged however by the steps Australia is taking.

“I think in many ways, Australia is on the forefront of gender inclusion,” she says. “The work of Male Champions of Change — founded in Australia and AVCAL has had a positive impact by not only shining a light on the lack of gender parity but also by taking concrete actions to affect change.

“In 2009, less than 10 per cent of directors of ASX 200 companies were women. Today it’s close to 30 per cent. This was accomplished without quotas but through a concerted effort by many organisations to highlight the issue. We are ahead of the US where only 22 per cent of S&P 500 company directors are women.”

Widner says that while NAB Ventures doesn’t have a quota for women, it does measure and report the percentage of its portfolio companies run by women, the percentage of women in their senior leadership teams, and the percentage of women on their boards to their investment committee.

“In general, this is a very widely discussed topic in Australia, but disappointingly in venture capital, there are hardly any women at the general partner level in firms,” she says. “There are very few women who are senior partners at venture capital firms in Australia. Until the large institutional investors make gender diversity a criteria for investment into this asset class, significant change will take time.

“Until we achieve something close to parity, we should continue to focus on the issue and be relentless in measuring and reporting.”