Gender lens investing is a relatively new concept that many investors are still treading lightly around. There is a lot of gray area in terms of its applications, returns and impact metrics, and lots of challenges around even talking about it without being seen as too limiting or not returns-focused.
The reality is that the gender lens investing is in fact exactly what it sounds like: evaluating investments through a lens that factors gender into the equation. The word lens makes an important distinction. Gender is not a sector, but a perspective that can be applied to all sectors. It involves asking questions about gender at every level: how does gender fit into my investment thesis? Are my sourcing channels the right places to connect to women? Are women the beneficiaries of my portfolio (either as managers, employees or customers)?
Previous blog posts on our website have already discussed the benefits of having more women in mentoring and decision-making roles, which include diverse perspectives, more informed decisions and eventually, higher profits. Investing through a gender lens takes this a step further. It means having more women in the boardroom, but also more women entrepreneurs, more women on product design teams, and more companies making products for customers who are women.
So how do you actually put gender lens investing into practice? The Criterion Institute, who first coined the term, defines three areas or “lenses”:
Access to capital:
It is important that women entrepreneurs and companies with women in leadership and management positions can access capital. A study by Babson college found that only 2.7% of venture-funded companies have a woman CEO. One solution to this is to bring in more women investors. Firms with female partners are twice as likely to invest in female management teams. Capria is always looking to invest in female fund managers and our sister company, Unitus Seed Fund is alwyas looking to invest in more women entrepreneurs.
Gender equity in the workplace:
The issue of time poverty, which Melinda Gates talked about in this year’s Annual Letter, is closely tied to an inclusive work environment. Women all over the world spend on average 4.5 hours a day double on unpaid work – tasks like cooking, cleaning and childcare that aren’t paid, but are essential to daily life. Men spend less than half this amount on unpaid tasks. They spend this time instead on work that is accounted for monetarily, but which would not have been possible without the unpaid labor of women. Investing with a gender lens means fostering an inclusive work environment with policies that ensure that women apply to and stay at the firm. There are, of course, a range of cultural and socioeconomic factors that contribute to time poverty, but one tangible way to combat it is to establish flexible family and maternal leave policies. Unitus Seed Fund, for example, has a team that is over 40% female, and one way to
Products and services that better the futures of women:
A great example of this is Be Girl, a company that makes sanitary pads and underwear and has a threefold benefit for women:
- Allows women to take charge of their own lives.
- Reduces absenteeism from school due to menstrual issues, resulting in better educational outcomes for women who can now contribute to the economy.
- Increases awareness about menstrual health and hygiene and decreases stigma.
The future of gender lens investing is bright. There is a huge opportunity to invest in women as entrepreneurs, managers, investors and movers of markets, and women-led VC firms are on the rise. The gender lens is not one that limits perspective by focusing closely, but rather a “viewfinder for opportunities.” It highlights opportunities for both impact and financial returns that tap into the unrealized potential of women world over. At Capria, we recognize this potential both in our applicants and our advisors. 30% of fund managers who applied to Capria have at least one female partner, which is more than double the national proportion of female fund managers. Women also make up 20% of our advisor pool, providing support and advice for our Cohorts.
Be sure to check out the other posts in our Leading Women in Impact Investing blog series. Read about the Network Effect and why we need more women in impact investing in our previous blog posts. If you are a woman looking to raise an impact fund, or know of any women who are, contact us at info <at> 2021.capria.vc or apply today!
This post is a guest post and was written by Aunnie Patton, who is the Innovative Finance Lead at the Bertha Centre for Social Innovation and Entrepreneurship at the University of Cape Town and an Associate Fellow at the University of Oxford’s Saïd School of Business.
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