Blog by Nicole Bradbury, Renewal Funds SVP

At Renewal we were recently reminded about a Babson College study from a few years ago on the (under)funding of women entrepreneurs by venture capital investors.

http://www.babson.edu/News-Events/babson-news/Pages/140930-venture-capital-funding-women-entrepreneurs-study.aspx

The key findings were:

Women led businesses are grossly underfunded by venture capital.

• Since 1999, women entrepreneurs are indeed obtaining more venture capital; however, a wide gender gap is clear.  Early-stage investment in companies with a woman on the executive team, has tripled from 5 to 15% over 15 years. That’s a positive trend, yet 85 percent of all venture funded companies have no women on the leadership team and only 2.7% had a woman CEO.

These businesses perform better than those with no women on the executive team.

• Companies with women in leadership positions are statistically more likely to have higher valuations at both first and last funding (64 percent higher and 49 percent higher, respectively).

Renewal Funds’ mandate is to invest in businesses creating a more sustainable future. We don’t specifically screen for women-led business, we do our best to support companies that can be financially successful while making strong contributions to people and the planet.  It turns out with this screen we find wonderful women-led companies.

We currently have 4 portfolio companies with female CEOs or Presidents: Alter Eco, Elevation Brands, Goddess Garden and Sweet Earth Natural Foods and have invested in 6 companies that were either founded or co-founded by a woman: Better Bean, Farmhouse Culture, Goddess Garden, Mama Earth Organics, Prana and Sweet Earth Natural Foods.  Renewal Funds itself was Co-Founded by Carol Newell.

The study further reports on the decline of women decision-makers in venture capital.  Thanks to the wonderful leadership at Renewal we are proud to report we have equal gender representation at the  senior level on our investment team (VP +).  A heartening contrast to the Babson findings that the number of women partners in venture declined significantly since 1999, dropping to 6 percent from 10 percent.

We have more capital to invest in our current fund, Renewal3, so if you know of any great sustainability businesses send them our way.