Female venture capitalists and private equity fund leaders are blazing a trail in the startup world, raising funds to support promising companies and ensuring women are at the table.
It’s a landscape where women are often in the minority; according to recent data from Pitchbook, women make up 17 per cent of decision-makers at Canadian venture capital (VC) firms and 12 per cent of decision-makers at private equity (PE) firms. (The numbers are similar in the U.S. and slightly higher in Europe.)
Despite this inequity, the women at the forefront of this space are changing the landscape.
Laurel Steinfield, assistant professor of entrepreneurship at Ivey Business School – which hosts one of the largest entrepreneurship research faculty groups in the world – says that women in the VC and PE world, shaped by different lived experiences than their male peers, are uniquely positioned to see and address gaps in what is typically offered to entrepreneurs.
Dr. Laurel Steinfield, Ivey Business SchoolSupplied
“For instance, instead of focusing solely on offering funds, they provide coaching support, build community amongst entrepreneurs, and adopt practices to root out biases in their decision-making processes,” Dr. Steinfield says.
“Instead of trying to grow only the business, which can sometimes mean the replacement or burnout of founders, they aim to keep, nurture and develop the founders. They know the founders have a passion, and that if this passion can be coupled with development opportunities and balanced by healthy work practices, the founder and business can reach a fuller potential.”
Women investors are often supportive board members who use their broad networks to bring in experts and build a more diverse talent pool, Dr. Steinfield adds. This often brings more women into top leadership positions and decreases the risks associated with “groupthink,” which can happen with all-male founding teams. “And 85 per cent of start-ups are all-male,” she notes. “In essence, [these women] are working to change the financing and entrepreneurial landscape and are doing it in ways that decrease risks of their investments.”
Here, some dynamic leaders who are making waves share their approach in the male-dominated world of startup funding.
Focus on the path, not the obstacles
Janet Bannister, Staircase VenturesSupplied
Janet Bannister, who founded and launched Toronto-based Staircase Ventures, a technology-focused venture capital firm, in 2023, says she understands the challenges and unconscious bias against women in the VC and PE fields, but chooses to see past that and focus on her goals.
Ms. Bannister, an avid athlete, likens it to skiing through the trees where you need to focus on your path so you don’t hit one. “If you focus on finding the path through the trees, that is what you will find,” she explains. “That is my approach to life and to my career. I choose not to focus on all the obstacles, but on how I can find a path to success.”
That approach has clearly worked – Staircase Ventures raised $34-million in six months and has made seven investments so far. Decades of hard work and experience and years of networking made this “overnight” success possible.
The firm’s approach to helping startups succeed is unique – firm operating funds are used “to help founders learn, grow, develop and show up at their best every day,” Ms. Bannister says. Startups also get a portion of the profits from the fund, which incentivizes founders to help one another as they all benefit.
Supports include one-on-one executive coaching, peer learning groups, a health coach to maximize health and wellness, access to a personal financial advisor, a cash stipend and access to family support and parent coaching. Founders also have access to a network of experienced advisors who have all run their own companies.
“I raise the expectations in terms of what [founders] should be delivering – and then I help them get there,” Ms. Bannister says.
A culture of trust and transparency
Lisa Melchior, Vertu CapitalSupplied
Toronto-based growth private equity firm Vertu Capital, which launched in 2017, is also focused on the startup technology sector, particularly business-to-business and software-enabled companies, says Lisa Melchior, founder and managing partner.
As the first woman to start a private equity fund in Canada, Ms. Melchior says she felt the responsibility to be visible in order to show other women it was possible.
With fewer than 10 companies in any fund, Vertu’s investment teams work very closely with management to help them execute on their vision of growing the business, Ms. Melchior says. “We are very active owners.” In addition to board representation, Vertu gives them access to its resources, its deep global network of experts and its eight experienced business operating advisors.
While Vertu doesn’t have formal guidelines around diversity, with a women-led VC firm, it’s not surprising that the management teams of its portfolio companies have senior women in leadership, she says.
In addition, Ms. Melchior chairs the boards of many of her firm’s portfolio companies.
“We are data-driven decision makers at Vertu… so we remove bias from decision-making,” she says. “If you have a culture of high trust and transparency, and you actually listen to each other, you can achieve the best outcomes.”
Proactive in pursuing companies
Noramay Cadena, Supply Change CapitalSupplied
Los Angeles-based Supply Change Capital is an early-stage venture capital firm that invests in the intersection between food and health, from food innovation to sustainable agriculture and supply chain improvements. Its first fund raised $40-million and it has invested $20-million so far in 22 companies, says Noramay Cadena, co-founder and general partner of the firm with Shayna Harris.
While Supply Change Capital doesn’t have a mandate to invest in women-led companies, the firm’s impact report from 2023 showed that 56 per cent of its portfolio companies were led by women and 78 per cent came from underrepresented background, including women, Black and Latinx individuals.
Ms. Cadena says they are acutely aware that women are underrepresented as founders, and notes that women are often the ones buying and cooking food for their household. Women also make up a large portion of the agricultural work force, she adds. “Because we’re investing across the food sector, we think that it is incredibly important that the voice of women is represented.”
Supply Change Capital hosts a global annual pitch showcase for women, called the Female Founders in Food and AgTech Pitch Showcase, as they discovered there weren’t enough female founders in their deal flow pipeline.
“That’s one example of how we are active in these ecosystems,” Mr. Cadena says. “We work every day to ensure that we have a process that continuously drives out bias [and] we’re very proactive in how we pursue companies.”
Additionally, the firm invests 1 per cent of the fund for portfolio founder support including the Supercharge III program, co-created with Chicago-based consultancy Verde Associates, that includes coaching on leadership, management and culture.
Provide capital, open doors and ‘get out of the way’
Pauline Koelbl, ShEquitySupplied
Mauritius-based ShEquity focuses on “gender-smart and climate-focused businesses,” says founder and chief executive officer Pauline Koelbl. She started this private equity fund four years ago to address the gender funding gap in Africa by investing in female founders from the continent, as many investors see them as “too risky.”
On top of investing in impactful, scalable and sustainable ventures, she launched an investment readiness program called SHEBA, short for ShEquity Business Accelerator, to help startups get their financials, governance, marketing strategy and documentation in order so they could attract financing. So far, 150 women-led and owned businesses have gone through the program, Ms. Koelbl says.
“It was clear for us that we needed to provide more than capital, and that it was a smart business to address gender inequity while also building sustainable businesses in Africa,” she explains, adding they are currently raising funds for a $30-million gender climate fund focused on Africa.
“African women [are] the hardest working women I have ever seen. They operate in challenging environments and still achieve great results,” she says. “If you give female entrepreneurs the critical tools and opportunities they need – financial capital, access to markets and high value networks, open doors for them and get out of the way – you will achieve excellent financial and impact return leading to prosperity and a sustainabile world.”
But Ms. Koelbl says the best way to get more VCs and PEs investing in women is to show others what they’re missing out on.
“We need to highlight and show successes,” she says. “This is why many of us [invest in women], because we’re seeing opportunities that people are missing out on. Research indicates that women-led companies often outperform their male-led counterparts in various financial metrics.”
Supporting Canada’s entrepreneurial future
Dr. Steinfield notes that Canada has become a home for pioneers in this space. She gives the example of Coralus, founded by Vicki Saunders, which is a global community that funds and supports women and non-binary folks creating new systems structures and models for non-extractive businesses.
“All capital, both financial and social, has been gifted by community members to create a new business paradigm that benefits all,” Dr. Steinfield says. “Their experimentation with freeing capital from the traditional rules of engagement, [including] 0 per cent interest loans, has unleashed innovations across sectors, funding 200+ businesses globally.”
Dr. Steinfield points to The51, a venture fund founded by Shelley Kuipers, Judy Fairburn and Alice Reimer that has “initiated feminist financing that expands opportunities to invest in women entrepreneurs by making the cheque size more accessible.”
The Canadian government’s Social Finance Fund is investing $1.35-million to help build an environment that can support businesses that are advancing social and gender equity. Meanwhile, Innovation, Science and Economic Development Canada (IESD) has funded the Women Venture Forward Program, a program run by Ivey Academy in partnership with Canadian Venture Capital Association (CVCA) that seeks to change the face of financing by preparing more women to be venture capitalists. The program has already run three cohorts, graduated 88 women and is expected to run its next cohort in late March 2025.
The Morrissette Institute for Entrepreneurship Powered by the Ivey Business School offers one the most comprehensive entrepreneurship education programs globally. Ivey Entrepreneurship faculty have supported over 1000 Canadian high-growth entrepreneurs over the past 20 years through premier executive programs like QuantumShift and FamilyShift.
Women may be under-represented in the industry, but as Dr. Steinfield says, “They are changing how business is done, and doing it in ways that are healthier for entrepreneurs and the businesses in which they invest.”
She adds: “Although not all women investors do these things, women trailblazers are providing the future generation examples of what can be done.”
Credits to: The Globe and Mail