February 28, 2020

Are accelerators addressing the gender financing gap?

February update: New research on the gender financing gap, our SXSW event, and more.

Last week, my colleagues Heather and Deepak attended the Women Entrepreneurs Finance Initiative (We-Fi) MENA Regional Summit in Dubai, where they took part in the unveiling of important new research from IFC, conducted in partnership with our team at Village Capital.

The genesis of the research started with a well-known problem: the gender financing gap. Female-led startups in emerging markets raise only about $1 of seed funding for every $9 raised by all-male teams.

There is a lot of hand-wringing about how to meaningfully close this gap - and our work puts us in direct contact with one of the potential keys to a solution: accelerators and incubators. These entrepreneur support organizations are on the front lines with startups, and play a connecting role between founders and funders. As a result, they have huge potential to influence diversity in who receives capital, and who doesn’t.

So earlier this year we teamed up with IFC and World Bank Gender Innovation Lab, in partnership with We-Fi, to research how accelerators are addressing the gender financing gap.

The results surprised us. The research found that acceleration is actually widening the gap. We found, in a nutshell, that acceleration seems to have no positive impact on the ability for female founders to raise equity. Men, on the other hand, seem to reap the benefits of acceleration, increasing the amount of equity they raise by 2.6 times as much as startups with a female founder.

Why is this the case and what can be done about it? You can read more in Forbes, and download the report here. Please reach out if you have thoughts!

What’s on my mind:

  • Will you be at SXSW in March? I’m excited for good weather, good food and hearing from featured speakers like Arlan Hamilton and the keynote from Laurene Powell Jobs. I’m also excited about our panel “Who Gets to Decide? Flipping the Power Dynamics in VC” with Charli Cooksey (WEPOWER), Melvin Hines (Upswing), and Liesel Pritzker Simmons (Blue Haven Initiative). If you’ll be at SXSW, come by!
  • It’s Black History Month, and a good chance to reshare the statistic that black entrepreneurs in the US still receive less than 1% of VC dollars. This piece from Forbes connects America’s systemic oppression to the massive funding gaps, and highlights history-making entrepreneurs. For further reading, a quick plug for the Plug: a digital news and insights platform covering the Black innovation economy. Their weekly briefing newsletter is a must-read for reporting on Black tech trends, stories, and analysis.
  • For the second year in a row, Inc. Magazine and Startup Genome published a list of Surge Cities. Between the coasts, startups are breaking the mold of the New York, Boston, and Silicon Valley hubs and thriving! The Rise of the Rest continues!

What we’re up to:

  • Don’t miss our panel at SXSW on March 14, 2:00-3:00pm!
  • 2020 is well underway and our team is preparing to launch accelerator program applications (keep an eye on our Current Programs page). If you’re interested to learn more about our most recent programs, check out a new blog post from my colleagues Deepak and Matt recapping the last few months of 2019 (Including 8 accelerator programs across 5 continents!!)
  • On March 19, Village Capital is hosting a webinar for early-stage entrepreneurs about best practices for financial modeling. It’s free, open to all sectors, and attendees can even win a consulting session with our Investment Analyst. Register today!

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