A community of female entrepreneurs, founders and investors has joined forces to improve diversity in business.
Katrina Carroll-Foster and Jill Earthy are two of the co-founders of Raise Collective, an initiative to increase female representation in founding and investing in companies.
“We really wanted to create a collaborative community where we would invite in men and women, but with a focus on women, to hear from female investors … women who have spent their lives either in a formal capacity like a venture capitalist or more informal like an angel, investing in companies.”
In a 100-day #womenraise campaign, the Raise Collective is attempting to encourage Canadians to invest $1 million in capital for seven local companies that are led by women. The campaign began March 27 and runs through July 4.
“Women traditionally don’t access capital, especially venture capital, at the same rate men do,” said Carroll-Foster. “I think it is less than 6% of female founders who access venture capital.”
In a First Round Capital report, the venture capital firm found that U.S. companies with at least one female founder did 63% better than all-male-founder teams when looking at how much company values have changed since the firm’s investment in them.
How this applies to the Canadian market is still debatable, but Carroll-Foster believes that if you change the investor, you change the businesses being invested in.
“If there are more women who start to invest in other founders and in female founders, there is going to be a larger capital pool to go around. When there is a larger capital pool to go around and a more diverse group of people investing, the ideas that get invested and the founders that get supported are more diverse too,” she said.
Nano-Lit Technologies, one of the seven companies involved in the campaign, designs smart lights that reduce energy consumption and improve human health and well-being.
When pitching her company to investors, Nano-Lit CEO and owner Sarah Morgan encountered difficulty securing capital, which she believes could be countered by using a different approach.
“When I initially moved the company here, I started having my partner, who is a man, pitch for investments because female companies only get 5% of investments.”
Finding and accessing capital can be difficult for anyone; building a network, no matter who is behind it, helps organize efforts, share contacts and build knowledge.
“Entrepreneurship can oftentimes be quite lonely,” said Vivian McCormick, co-founder of Flax Sleep, an e-commerce company supplying linen bedding.
“Roundtables like [#womenraise] allow people to get out some of their frustration and collaborate on productive things we can do to help each other and other entrepreneurs.”
Carroll-Foster believes there are two main reasons why Canadian women are under-represented as business founders and investors.
“In Canada, generally, there is a more conservative attitude toward investments. There is generally a need for a lot more proof of traction and revenue before people invest.
“Also, I think many female investors are risk astute as opposed to risk averse, and … I think there is a certain sort of persona or image that one associates with an angel investor, and I think a lot of women don’t [identify with it].”
But Carroll-Foster believes new opportunities are convincing people to rethink their investment habits.
“We are starting to see a tremendous amount of independence in investors investing generally.… At a very broad, high level, people are taking a lot more interest and discernment in their investing,” she said. “Second, while everyone may not be able to invest in the capacity of an accredited investor at a certain minimum amount, there are a number of companies out there now that are available to be invested in via an online platform that are really accessible and affordable.
“When you see online platforms enabling people to start with smaller-sized investments, it becomes a lot less daunting. Maybe once you’ve made one or two, then you are ready to do something a little bit larger, and you find a peer group of other people that are interested in doing the same thing.” •