Like most investorsI'm a little obsessed with unicorns.
But not just Silicon Valley. As a mother of a five-year-old daughter, my interests also move in a pink, sparkling direction. So it should come as no surprise that I was recently in a dusty corner of the Internet where die-hard unicorn fans spread their wings.
There, deep in the My Little Pony forums, a question stopped me: “Will a male Alicorn be possible in the future?1"
An Alicorn is the rare winged female version of a traditional unicorn for those unfamiliar with the mythological details.
My little pony popularized the term, and the fan forum where user "Green Precision" asked in 2015 had some interesting answers to the details of this philosophical dilemma.
Shadow Stallion replied immediately: "I don't think a male Alicorn will be possible in the future. Not because it is [sic] not wanted or because it is [sic] genetically not possible … but generally things get ugly when male characters are introduced to a show where female characters are in the foreground. "
Malinter stated: “They probably do, but given the ratio of women to men in Equestria2 They are probably exceptionally rare. The real problem for a male Alicorn is not that they exist, but where is their place in the world? … Our male Alicorn has some fairly large hoof prints to fill in, while at the same time it doesn't make a train accident of established lore. "
Wind Chaser went straight from unconscious bias to conscious bias in her response: "Aesthetically, a male Alicorn simply wouldn't look right because her bodies are naturally taller than female, so the wings would cause an imbalance in design."
But it wasn't all bad news.
"Until proven otherwise, it can be said with certainty that something like a male Alicorn is possible," answered Geek0zoid. Crysahis agreed. "Overall yes, I think there could be a male Alicorn, it can only take a while before it actually happens!"
Stanford or the only female investment partner at Sequoia do not do a doctorate in philosophy3 to assume that these conversations probably took place across Sandhill Road in December 2009, when male VCs discussed whether female unicorns could actually happen4,
As we approach 2020, however, we will see a pink winged rush.
Just look at the latest trends. More female-funded unicorns were born in 2019 than ever before.5 And things just look good. (I look at you, ClassPass!)
Public opinion agrees. In addition to TruePublic, where I am a consultant and angel investor, I did a study asking if people believed that we would see more unicorns led by women in the 2020s.6 At the time of this writing, 68% of the 6,500 respondents said we would see more, with 30% of women answering "much more" (as opposed to only 16% of men). Only 4% of women, but 9% of men replied, "No, no chance."7
Kaben Clauson, founder and CEO, said: "To represent Gen Z, Millennials and Gen X, TruePublic needs a weighted sample of approximately a thousand Americans to represent this population of the United States." This particular study already has 6,500 respondents, which makes it statistically significant.
Indeed, companies founded by women and co-founded by women over index the unicorn status despite lack of investment funds.
Shelby Porges, co-founder of the Billion Dollar Fund for Women, said: “Recent research has shown that women-owned companies make up 4% of all unicorns. This is astonishing when you consider that they have received just over 2% of all risk finance in recent years. "Porges, whose group has mobilized more than 80 venture capital funds to promise to invest over $ 1 billion in women-owned companies, continues:" It shows why we say, "If you invest in women, you are in good shape Society. "
Here are the three reasons why I think a herd of winged female unicorns (OK, Alicorns) will be piping in the 2020s:
1. Women invest three times more often in men than men
New data show that women invest almost three times as often in women as men. Given the (slow) increase in the number of female investment partners in VCV companies, we are ready to fund more and more gender-balanced start-up teams.8th As a male general practitioner at one of the world's leading VC funds said to me when he spoke about one of the few partners in his company: "It always brings us parent companies." It could be terrible if TechCrunch hadn't declared 2020 the "big year for online childcare" and the same partner didn't make much of her money thanks to all of the upcoming parent Alicorns, which she skillfully financed.
Sophia Bendz, a partner at Atomico who also leads the Atomico Angel program, said: "I am confident that we will see more female unicorns in the next ten years as more and more ambitious women founders develop incredible products and services. There are now more women in VC as well, and I saw firsthand the impact that female investment partners can have on increasing investments in women-owned companies, data shows that women invest three times more often in women than male investment partners. ”
My study at TruePublic agreed with these results. When asked whether an investor was more likely to invest in an entrepreneur, 64% of the respondents answered positively (64% of these people were women and 63% men).9
Jomayra Herrera agrees. An investor at Cowboy Ventures (who first coined the term "unicorn" thanks to Aileen Lee) and volunteers at AllRaise, a non-profit organization that promotes women in VC, says: "As the venture industry continues to diversify, especially as It refers to gender and race / ethnicity. I am optimistic that we will see more female and colored unicorns in the next ten years. We know that different teams not only work better, but can also identify areas with opportunities that more homogeneous teams may miss. I think the next generation of investors is more likely to question conventional wisdom, forms of pattern recognition that can lead to bias, and other structural barriers that promising entrepreneurs have missed in the past. "
Camila Farani is a well-known investor in Brazil. As the founder of G2 Capital, former president of Gavea Angels and personality of the Brazilian “Shark Tank”, she says: “Different perspectives at the table make the decision clearer and safer. People who think differently from you and have different visions of the market can sometimes show you what you can't see yourself. "
It also reminds us not to forget the impact that angel investors can have. “The investment market is still mostly made up of men, but this landscape is gradually changing. It is interesting to see that angel investments are the most common choice for women who want to make their first investments. "
This trend to invest more in women is not limited to female investors. Susana Robles has been responsible for investing in women in Latin America for two decades and, along with Marta Cruz from NXTP Labs, is co-founder of WeXchange, a platform that connects entrepreneurs from Latin America and the Caribbean with mentors and investors.
Robles says: “I think the world is finally waking up to the fact that there are serious studies showing that startups with co-founders win in all aspects: profitability and greater social and environmental awareness. Investors should want that triple profit. "She continues:" Women tend to return money to investors faster than men, and at the same time they generate higher returns. Women are responsible for 64% of all global purchasing decisions for products and services. So women in C-level positions increase the probability of a startup [will] be very attractive for a huge market and become a unicorn. "
It also extends to the LPs in the funds. "I also think a lot of investors are investing in funds (mainly DFIs) [development finance institutions] (but not exclusively) have stated more loudly that they no longer want to invest in teams that are led by a purely white, purely male cast, who choose startups with purely white, purely male founders. "Jennifer Neundorfer is a co-founder of Jane VC and an investor in Kinside, a parenting app that has just raised a $ 3 million starting round. When describing the reasons behind her fund to focus on female founders, she drops the microphone:" We will invest in an undervalued asset class that outperforms. "Boom.
2. Founders create new billion-dollar markets
Another reason why we will see more "Alicorns" founded by women in the 2020s has to do with the new markets that women founders are creating. Hunter Walk of Homebrew was one of the first seed investors in Winnie, an online childcare marketplace that recently raised a $ 9 million Series A. At that time, he saw something that other investors did not see. Winnie's co-founder, Sara Mauskopf, explains: “When we started Winnie four years ago, parenting and childcare in particular were not hot investment areas. That has changed. It certainly helps that more investors are women and are in the midst of childbirth and education. "
Part of what Walk said to recognize was the clear fit of the start-up market that Mauskopf and her co-founder Annie Halsall showed. As Mauskopf says: “With Winnie, we saw an opportunity to solve the childcare crisis that other founders either didn't recognize or didn't want to solve. While everyone else started crypto and scooter companies, we built the first technical platform for the childcare industry worth $ 57 billion. The lack of access to high-quality childcare has a disproportionate impact on women. So it should come as no surprise that a team led by women was required to take advantage of this opportunity. "Walk extends the concept of founder-market fit and says," I love getting away and thinking that these are the absolute right founders to build this business. "10
Bendz, the Atomico partner who specializes in femtech and is also an avid angel investor, agrees. “I often meet founders who you can tell are in the right place at the right time, with the right attitude and the right team. It's almost as if all of the experience they had before starting a business prepared them to start that business at this point. These are the founders who I know will be there in the long run and who will survive the ups and downs. “As a woman who uses the products and services she invests in, Bendz is also an example of investor market adjustment that I believe will open up new markets in the coming decades.
What do other investors like Walk and Bendz believe in? Oversized opportunities. And the potential for oversized opportunities is particularly mature in undeveloped markets. The rise of femtech is another example of how the intuitive success of the founder-market adjustment concept ultimately required more female founders to flourish in certain markets. Bendz explains: “There are many major events throughout a woman's life that have a major impact on our general health – from birth to menopause. I know that all women are fed up with finding bad or nonexistent solutions for women related to these life events, and that's why so many businesses are being created to better serve women's needs. When you think about the fact that women have only had voting and education rights for 100 years, it's amazing how long the world has been under control with only 50% of the population. This is reflected in the products and services that we have financed as a company. "
Consumer goods are another area. Ornella Moraes is one of four co-founders of the Brazilian-led sousmile, which recently raised a $ 6 million Series A run by Kaszek Ventures. "Our brand is a woman," says Moraes of her dental beauty startup, which is available in retail stores across São Paulo. And the company's executives too. Sousmile has four female co-founders and two male co-founders. "Worldwide, more dentists are women than men, so it was crucial for our team to have more founders," she says. In this way, the rise of founders and co-founders can completely change the markets. “We believe that this will fundamentally lead to a different type of product,” says Walk.
3. Emerging markets will take the lead
Finally, certain emerging markets represent a special opportunity for female founders, as they are over-indexed for both large IPOs and female founders. 2017 was the first year that more of the world's largest internet IPOs came from emerging markets. Nazar Yasin, founder of Rise Capital, which invests in emerging markets, says: "This trend is not waning." After all, most of the GDP growth comes from emerging markets, where most global internet users live. As he explains, "the future of Internet market capitalization growth belongs to emerging markets worldwide." And yet this type of innovation requires resilience. "If you're a startup in one of these markets, it's like trying to grow a plant in the desert."11 In an environment that requires more daily resilience, there is a different appetite for risk and innovation. (I call this resilience innovation.)
Perhaps the simplest example of innovation in emerging markets driven by resilience is fintech. Emerging markets and their often unstable economies have a much higher number of frustratingly unbanked people. This brings innovation. Hanna Schiuma, the Brazilian-born fintech founder of ElasBank, where I am an angel investor and advisor, explains how such a fintech innovation is becoming ubiquitous.
"Soon all funding will be tailor-made and fintech will be a common foundation as all financial services will be technology intensive." She also argues that the nature of such an innovation enables the industry to become more innovative and therefore more inclusive, which is exactly what is happening to its own women's bank that will start in 2020. “This means great opportunities to better meet the financial needs of women, offer dedicated products and collect female talent to develop these products from a diverse and innovative perspective. "Ultimately, resilience is the key for us to build this pool of talent and open the doors to gender balance and financial inclusion."
In addition, data shows that both Africa and Latin America exceed the global average for percentages of women founders. Laura Stebbing is Co-CEO of AccelerateHER, a global leadership community that works to under-represent women in technology. Stebbing grew up in southern Africa and is enthusiastic about the rise of Africa as a hub for female entrepreneurship.
“Africa has the highest proportion of women founders with 26% [Latam comes in second]12 and a funding gap of $ 42 billion. There is clearly no shortage of talent in the 54 African countries. Therefore, investors, executives, policymakers and established founders who are not moved by the moral arguments for gender equality should notice the tremendous business opportunities. We will find that a larger volume of resilient, scalable companies will emerge as managers build more diverse networks and ecosystems that help women realize their entrepreneurial potential. Nathan Lustig, founder of Magma Partners, a VC company in Latin America that invests above the regional average in women entrepreneurs, explains: “Investing in and empowering resilient women entrepreneurs is simply good business and one of the greatest investment opportunities, especially in emerging markets. "
I think Latin Americans can have an advantage. I am an Silicon Valley-born investor and now live in Silicon Aires, where I was thrilled to see an exciting number of female founders in Latin America. Susana Robles agrees, saying that part of the reason is the nature of a committed ecosystem that supports each other. "It is the sheer need that forces you to work together." An ecosystem like Silicon Valley doesn't necessarily have to do this. Of Latin America, Robles says: "In 10 years we will have created a much more collaborative market than the developed one." And this collaboration leads to great founders. In fact, more funds went to co-founders in Latin America in 2019 than in Europe or the United States.13
This will lead to future Alicorns. Ann Williams, COO of Creditas, a Brazilian fintech company that is currently achieving its own unicorn status, says: “The unicorn conversion funnel works like any other selection process. We fill the top with a group of great women who support roles in emerging market startups. These women use their experience and have found new companies. A percentage of this is converted into scale-ups that increase the rounds of the C and D series with valuations of $ 1 billion or more. And voila! We get unicorns led by women. "She continues:" The chances are with us and I am sure that the talent is too! "
Juliane Butty, startup manager at Platzi and former regional manager of Seedstars, one of the leading accelerators and investors promoting entrepreneurship for women in emerging economies, joins Williams. “We have definitely seen the rise of founders and investors in emerging markets in the past ten years. One supports the other. And we know that success brings success. "
Perhaps My Little Pony fan Malinter said it best when he suggested how a male version of Alicorn could finally emerge in a female-dominated space: "The easiest way to add one would be to make Alicorn ruler of a neighboring nation , "In the same way, emerging markets could only hold the key to female unicorns.
Regardless of the region, Robles says, "If we continue to open doors to women entrepreneurs who are as ambitious as men to grow their businesses, we will see a lot more unicorns with gender teams." Hanna Schiuma, the founder of Elasbank, who may be building the next unicorn founded by women, agrees. "The Alicorns are coming. And we are ready to fly. "
2Of course, the My Little Ponies and their various unicorns, alicorns and friends live in Equestria.
3Go Jess Lee!
4Yes, Aileen Lee of Cowboy VC first came up with the term in her 2013 TechCrunch piece, but we're in a unicorn-powered time machine, folks.
8th“Do female investors support women entrepreneurs? An Empirical Analysis of Angel Investor Behavior, ”Seth C. Oranburg, Faculty of Law, Duquesne University, Pittsburgh, PA, and Mark Geiger, Business School, Duquesne University, Pittsburgh, PA, USA
12Upcoming research from TechCrunch / Crunchbase
13Upcoming research from TechCrunch / Crunchbase