Radical Generosity: Reinventing Capital Investment for Women
By Henny Buffinga
It all started with some terrible statistics. Women receive less than four per cent of venture capital in Canada. Investors are 68 per cent more likely to invest in a business based on a pitch deck if it is perceived to be from a male entrepreneur instead of a female entrepreneur, even when the deck is identical. And only 10 per cent of high growth companies are owned by women.
So Vicki Saunders decided to do something about it. Saunders is a self-described serial entrepreneur who was inspired by the passion women have for their companies. “Women make 85 per cent of purchasing decisions in the household,” Saunders explains. “We always ask women what kind of companies they care about, that they would like to buy from or refer—that’s our number one criteria for selecting a company to invest in. We’re looking for companies women are excited about, because if they’re passionate about them they will bring their buying power and that can dramatically improve the company’s success.”
She came up with the idea of crowdsourcing capital investments in companies owned by women through SheEO. Her 500 “activators” contribute an investment of $ 1,100 each and vote on the company who will be the recipient of an interest-free loan. The investors retain no equity from the company, and the recipient pays the money back, where it will get reinvested in another company by vote again. As the money is paid back, they are able to invest in more companies each year.
SheEO started in Canada four years ago, and has to date funded 55 companies with a hundred per cent payback rate on the loans received. “SheEO has looked at the systemic barriers that are stopping women from getting capital and we’ve built a whole new model,” Saunders explains. The companies they have invested in have doubled year to year on average.
One of the companies they have invested in, Abeego, creates breathable beeswax food wraps that keep food fresher for longer. Another, Alinker, is a walking bike that addresses the fact that 50 per cent of people in wheelchairs can still move their legs. The bike allows for low impact exercise, while staying at eye-level to peers, an important part of social inclusion and improved self-image.
“Every company we fund is creating things that make the world a better place,” Saunders says. And with access to this network of radically generous women, they will go far.