New | Start-ups run by women face gender bias when seeking venture capital, says expert

Current models for pitching start-ups and the expectations of venture capitalists seeking out high-growth businesses are skewed towards male-run companies, according to gender lens investing expert Joy Anderson.

Anderson is president and founder of the Criterion Institute, a think tank which focuses on shaping markets to create social good, in particular gender lens investing that uses data surrounding gender as a means to improve investment outcomes and which encourages investors to pay attention to companies led by women.

“Women tend to do complicated things and again, angels don’t always like complicated businesses, they like the shiny toys that they can easily make an investment in,” Anderson said, adding that the innovations women develop can be too complex for a two-minute pitch.

The entrepreneur said venture capitalists shy away from investing in women-led businesses as women tend to build normal growth businesses, rather than the high-growth model investors are looking for.

“We bemoan the fact that women only have 3 per cent of the venture capital [invested] and so we go ‘Oh my goodness, what we need to do is get women to build high-growth businesses so they can get access to venture capital’,” she said.

“Why aren’t we simply saying we should have better financial products that serve normal growth businesses.”