By Samira Ann Qasim and Saloni Bhojwani, above, partners, Pink Salt Ventures
No one would say men make better entrepreneurs, yet many female founders who are building high-growth scalable technology companies are overlooked by the market at the earliest stage. Female founders typically lack the capital, access and network that male founders have, and when building for a woman end-consumer, investors often don’t understand the market or opportunity for which they are building.
That is why we set up Pink Salt Ventures, the UK’s first VC firm for female founders. The firm invests in female-led technology companies in Europe, the US and the UK. We are former operators and entrepreneurs who have cultivated deal-flow networks at the heart of the female founder community.
We recently released a survey on our community of female founders to explore their challenges related to fundraising, delving deeper into the stagnant VC funding statistics that are currently dropping. Female founders almost unanimously agree that they are treated differently when pitching their business than male founders. For many, this topic is tired and they are discouraged by the lack of changes in statistics over the prior decade. But we see the current market mix as a huge opportunity.
With a focus on women’s health, future of work and fintech, the firm is primarily interested in businesses built by women for women or that disproportionately benefit women over the long term. For example, tools that enable decentralized working, markets that are female-led and in need of new solutions like the creator economy, healthtech, HR tech, marketing tech.
This research demonstrates the unique lived experience of female founders, and the specific dynamics necessitating dedicated capital that needs to be institutionalized. That only fuels our determination at Pink Salt Ventures to change things.
To delve yet deeper into where the gap stems from: PSV advisor, LBS professor and global thought leader on the gender gap in startup funding, Dana Kanze, has done extensive research on the topic. The key finding: women get asked prevention questions, men get asked promotion questions. Prevention questions are to cover what could go wrong; promotion questions cover what could go right. Prevention questions create a downside-driven narrative that’s highly unlikely to result in a term sheet being issued. So unconscious bias, whether we like to acknowledge it or not, does in fact play into the way investors ask questions, and ultimately, make investment decisions.
The female founder opportunity is massive, and overlooked. Women control c. 80% of the household spend in the Western world, and are responsible for all key purchase decisions within the household. Yet they are largely overlooked as the consumer. But historical and societal norms are now being disrupted, and there are significant macro trends in which we see opportunity. For example, in FinTech women own roughly a third ($72tn) of the world’s wealth by 2020, and inherit 70% of the wealth that will be passed down in the next two generations. They are best positioned to innovate in wealth management and financial inclusion.
Moreover, by 2030, women in the US are expected to control the majority of $30 trillion in financial assets that baby boomers will possess. This wealth transfer equates to the size of the US’ entire GDP, suggesting space for innovation: the empowered consumer taking control over their finances, and changing macro trends in pensions in the developed world.
Within healthtech, there’s a huge opportunity for innovation. The vast majority of health, medical and pharmaceutical products and services are built for the male body, leaving 50% of the market significantly underserved. Moreover, life stages like menopause are not even covered in medical curricula, and hormonal imbalances that affect an estimated 80% of women are not addressed by the medical industry. This creates a massive opportunity to capitalise on this market gap – one that we believe women are best positioned to innovate in, given they are likely to want to solve the problems they have experienced.
We built Pink Salt Ventures because we love the businesses female founders are building. We never doubted that women could build scalable tech businesses and deliver outlier returns for investors. Together, we can help unleash their potential.