Gender funding gap not pipeline but a capital access problem, says TBDF’s Sarah Chen

Sarah Chen at DEALSTREETASIA's Asia PE-VC Summit 2017 in Singapore.

There is no shortage of venture funds that seek to back women entrepreneurs. Take, for instance, Arlan Hamilton’s Backstage Capital (which backs people of colour and LGBTQ entrepreneurs, in addition to women).

Nor is there a paucity of initiatives to tackle the gender funding gap. Cowboy Ventures’ Aileen Lee launched non-profit organisation All Rise in April this year to help address the lack of diversity among investors and founders.

So, when a new initiative, The Billion Dollar Fund for Women (TBDF) was launched this month, one had to ask – what was different about it?

For one, TBDF builds on the foundation of these initiatives. Backstage Capital has partnered with the initiative and so has Springboard Growth Capital, an accelerator focused on women entrepreneurs that has seen its 730 companies raise $8.6 billion in total.

“We’re like a network… We’re not here to make direct investments, we’re more of a consortium for this first phase,” says TBDF co-founder and managing partner Sarah Chen.

In that first phase, expected to last through 2020, partners will commit to an incremental goal to accelerate access to funding for women entrepreneurs and women founded and led companies. In the next phase beyond 2020, TBDF will ask its partner funds to re-invest their initial investment in women-founded businesses. And the cycle will be repeated until a total of $1 billion incremental dollars have been invested.

So far, the consortium has secured pledges of over $460 million from global investors including Gobi Partners (which made a $50-million pledge), Golden Gate Ventures, Rethink Impact, SoGal Ventures and Different.

This is just the start, said Chen, who hopes that TBDF could spark a conversation among legacy funds including institutional investors, pension funds and family offices to invest in women-led businesses.

The focus of TBDF is not just to increase investments into women-founded companies, but also to include these companies in deal flow and highlight them to the investment committee. Last but not least, shall the company fail to secure funding from these funds, they need to be given constructive feedback to help them improve.

“We know that when you’re forced to give constructive feedback, you have to ensure your methodology is right. Because when you’re investing in early-stage, sometimes you invest in the team when there is barely a product-market-fit. That’s where bias and unconscious bias come about and that’s what we’re trying to address,” Chen explained.

Chen, who started off as a law graduate from King’s College London and was handpicked to start the corporate venture unit of Malaysia-based conglomerate Sime Darby, has previously co-founded Lean In Malaysia, a women-led non-profit established to empower women community.

In a conversation with DEALSTREETASIA, Chen shared some of her thoughts and observations across the startup and VC world, and how the newly-launched TBDF aims to address the gender funding gap.

Edited excerpts:

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.