The term ‘gender lens investing’ coined in early 2009, is now being used heavily in the VC world. Throughout the years, women-owned businesses have suffered due to lack of capital, funds, support, and resources. According to an Ashoka global survey, 9% of their fellows reported experiencing gender-specific challenges while attracting funding and investment for their businesses.
In 2005, when Valeurs Feminines fund, created by the French money-management firm Conseil Plus Gestion, started investing in women-owned and women-led European businesses, it led to many other venture capitalists joining the league. Now, some of the famous gender lens portfolios include Morgan Stanley, Merrill Lynch, Goldman Sachs, Root Capital, Veris Wealth Partners, Illuminate Ventures, Trillium Asset Management, Gray Matters Capital, Golden Seeds, and the Calvert Foundation.
Gender lens investment yields many benefits to the ecosystem and also contributes to our sustainable future. As times are changing and if we look back, the return on investment or equity of women-owned or backed businesses has never been low. Over a five-year period (2011-2016), U.S. companies that began the period with at least three women on the board experienced median gains in return on equity (ROE) of 10 percentage points and earnings per share (EPS) of 37%.
What other benefits does gender lens investing bring to the table? I had the opportunity to talk to five social entrepreneurs and VCs to share their opinion on it. Let’s hear it from them.