Some of the nation’s most successful VC funds are putting their money where their mouth is in terms of closing the gender gap in Australia’s start-up industry, and they’re happy to share how they’re doing it
When Equity Clear began in late 2022 it had 12 venture firms and family offices commit. Two years later it has grown to 65, yet when co-founder Samar McHeileh received an email last November congratulating her on the initiative making Fortune magazine’s prestigious Change the World list, she thought it was a scam.
“I sent it to my team and asked if they thought it was legit,” she says with a laugh.
Equity Clear is certainly gaining traction and is hoping to attract even broader engagement after officially launching at SXSW in Sydney on Tuesday October 15.
Equity Clear was co-founded by Alberts, Scale Investors and Giant Leap, the brainchild of Samar, Alberts former investment manager Lisa Fedorenko, and Giant Leap partner Rachel Yang.
It was begun to address the glaring inequality that exists in venture capital when it comes to investing in female-led start-ups, by inviting VCs and family offices that invest at the early stage to publicly disclose data on their investments in all-women, mixed-gender and male teams.
(From left): Samar Mcheileh, Lisa Fedorenko and Rachel Yang celebrated at the official launch of Equity Clear, Empower, in Sydney on 15 October 2024.
Given equality and positive impact are integral to what Alberts stands for and where it already invests through its portfolio companies including Baymatob, Harvest B, Circle In and Conserving Beauty, it made sense to help bring the online reporting standard into being.
“Alberts has always backed equality and was really keen to move the needle and Equity Clear is good governance and aligned to the company’s values,” says Lisa.
As one of Equity Clear’s co-founders, Alberts reports its gender statistics biannually across its portfolio companies. Its most recently reported statistics show 43% capital invested in female-identifying and mixed-gender teams and 57% male-identifying founders.
It’s well-known by now that female-led and mixed gender start-ups achieve a 35% higher return on investment, and 10% more revenue.
“If we look at Australia alone, of the top six unicorns two of them have a woman co-founder, and a woman of colour as well,” says Samar, referring to Canva’s Melanie Perkins and Airwallex’s Lucy Liu.
Yet according to Deloitte, in FY22 – one of the biggest funding years seen in Australia – only 0.7% funding went to women-founded start-ups. This is despite 22% of start-ups being founded by women.
Why the disconnect?
“The two key reasons why they’re not receiving capital is access to networks, and an unconscious bias,” says Samar, managing partner at Scale Investors. “What it comes down to is the investors, and those who are making decisions on where they’re allocating capital.”
The three co-founders approached their company’s regular co-investors including Tractor Ventures and LaunchVic’s Alice Anderson Fund, all of them aligned on the proven benefit of investing in female-led and gender-diverse businesses, and invited them to publicly disclose their funding data in those businesses, along with their pipeline, and investment team and investment committee composition.
All 12 signed up on the spot. Within the year there was 65 venture firms and family offices across ANZ committed to using Equity Clear and its prepared templates to collect pipeline and investment information with the aim of closing the gender parity gap in the Australian and New Zealand VC industry.
“Transparency creates impetus to move and genuinely show you care. It’s putting yourself in a vulnerable position, when it comes to anything that’s transparent, it’s a clear way to show you care,” says Samar.
While the aim is to reach 100 venture firms and family offices, Equity Clear is gratified to see some of the nation’s biggest funds have signed up.
“The take-up has been fantastic and importantly in includes Blackbird and Airtree, two of the largest players in the space … so it sets a precedent for everyone. It’s really exciting,” Lisa says.
Scale Investors’ managing partner Samar Mcheileh at Equity Clear’s ‘Empower’ launch.
Tuesday’s official launch, titled Empower, at Google Sydney’s headquarters as part of SXSW Sydney included a panel for founders dissecting how AI is revolutionising Aussie startups, followed by a founder showcase featuring pitches from inspiring female founders, and a VC panel exploring how to drive more transparent DEI reporting amongst investors. The event culminated in a party and live music.
Samar feels positive the appetite for change is there and hopes Empower will encourage more investors to get on board.
“The emphasis needs to be on the opportunity, rather than rehashing challenges, we’re all a bit bored of that,” she says. “I genuinely believe ANZ has an opportunity to shed the mentality of ‘oh we’re always 10-15 years behind on VC’ and everything related.
When it comes to achieving equality for folks to have access and opportunity in this space we really do have such a huge opportunity to take advantage of, given how small we are relative to other developed countries. It’s not going to be easy to solve, it’s multi-layered and complex, but it is easy for everyone to sign up and start doing this as a starting point.”
