The session is about the need for women centric funds and access to risk capital. Aditi Balbir, founder of V Resorts is moderating the session with Prachi, Director of AWE Fund, an early growth stage fund investing in women owned and led businesses. The interview is on HEN – Her entrepreneur network – this is basically a platform for women entrepreneurs looking to build and scale their businesses by inspiring, learning and supporting each other.
Q1. Why did you start a women focussed fund in India?
India has the largest startup ecosystem in the world and women are represented poorly with only 4% equity funding in 2019 as per IFC. There are 5 key reasons for supporting women entrepreneurship –
- Access to more equity funding / risk capital because women may not have collateral for loans
- Number of women entrepreneurs are on the rise due to 50% demo, suited for women, increase in education
- Women are a great asset class that give better returns (35% increased returns: Mckinsey Report)
- Lack of empathy or gender lens investing
- Women entrepreneurs leave a greater impact on society, (if we invest in women they give back 80% to society)
Q2. About AWE?
A Fund to promote gender balance by investing in businesses led, owned or influenced by women
- Sector agnostic fund
- includes companies which supply chain is women or consumer base is women
- tech innovation – food, agri, healthcare, clean energy, supply chain, fintech
- From Pre-series A or Series A
- Initial cheque size of 3-5 cr going up to 5 million
- Eligibility – strong mgt team, scalable, USP, big market
- Companies between 1 -3 cr which are profitable or on a path to profitability
“Only business with sustainable models will be able to grow, rest will die down”
Q3. What are some of the myths around Women Entrepreneurship?
- Women run businesses clock lower revenues than their male counter parts – Actually data suggests that today women around the globe clock sales of more than $1.3 trillion and this rev is more than the combined market cap of Apple, Microsoft, GE, Google and Sony.
- Women are not good at numbers – Women are inherently great negotiators and can tell a strong story with their numbers
- Women and men face the same level of difficulty when raising equity financing – Actually women have to put in more effort because of socio-economic biases around family, marriage and kids
- Women focus on lifestyle business – Even if there is a lifestyle business it can be very scalable and profitable like AND by Anita Dogre in fashion or Nykaa in beauty. Only 11.8% of women run businesses around the globe are in lifestyle!
- Women do not take risks – actually women take calculated risks and tend to outperform their targets rather than giving very large unrealistic goals
“We prefer all companies (in a portfolio of 12) giving a 3X to 6X return rather than one company that gives a 100X return and remaining giving 0.5 to negative returns”“Indian women have access to 4% equity funding (as per IFC) which is still double that of US at 2% of overall capital”
Q4. What are the challenges that are unique for women entrepreneurs?
Women need an ecosystem to support them through their entrepreneurial journey and hence there has to be focus on capacity building
- A strong training and mentoring program is required.
- Programs are required to target attainable goals like 5X increase in sales
- Empathy is important and gender lens investing becomes important as women investing in entrepreneurs tend to understand their challenges better
- Access to networks for scaling and marketing are required
“We have men’s clubs but there is nothing like a women’s club”