A considerably diverse number of venture funds are increasingly and deliberately incorporating women, or gender lens, into investment analyses and decisions, a report called “Project Sage,” by the Wharton Social Impact Initiative concludes.

The Wharton team has found that the funds have raised a sizeable $1.3 billion and is now backing more than 650 companies.

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Why The Study Matters

Suzanne Biegel, Wharton

As recently as five years ago, according to Suzanne Biegel, its lead author and Senior Gender Lens Investing Advisor at Wharton Social Impact Initiative, funding options via gender lens were few or non-existent. The network of investors, key players and knowledge-owners was small, limiting access and opportunity for investing using the approach.

Today, impact investing is a market sized at over $23 trillion, so there is ample opportunity for the investment strategy to capitalize on the potential of women to help effect significant change to persistent problems across the world.

Finally, consider the backdrop of the study’s results against today’s news of harassment claims against prominent men like Miramax Film’s Harvey Weinstein, tech evangelist Robert Scoble or Uber’s former CEO Travis Kalanick. Despite persistent biases, many of today’s generation of women are game-changers and speaking out more.

Dig Deeper

The average size of the nearly 60 funds studied was $36 million with a wide range between $1 million and $400 million.  Nearly 60% of all the funds had all-women partners.

Technology, health-focused companies and companies with a positive environmental impact dominated fund portfolios, prioritizing businesses that served the “aging market,” “deep tech,” “agtech,” or “disruptive tech.”

Vehicles for directing capital were also as varied, from traditional venture and private equity, “collaborative” angel funds (i.e. group of angel investors, also called “sidecar” funds to angel group) to flexible loan structures that allowed loan drawdowns or redraws (i.e. ability to borrow the minimum to minimize interest on the borrowed funds or ability to reborrow loan payments made on top the minimums already paid).

Post Hoc

Biegel concludes Project Sage with an invitation to research more questions. The hope is that her team’s work will provoke deeper discussions and uncover more opportunities.

“What financial and social performance are each of these funds aiming for? What are they really delivering in terms of gender outcomes? Are their gender criteria creating issues in sourcing and selection? How have their criteria evolved? What are their motivations for backing these funds – social change, good market opportunities, or both? How much of the capital deployed comes from women limited partners? What’s happening with exits?”

Read Some More

“Project Sage – Tracking Venture Capital with a Gender Lens,” Wharton Social Impact Initiative, October 2017.

“World’s 100 Most Powerful Women,” Forbes, November 2017.

“Investors put pressure on Google and Starbucks over gender policies,” Seattle Times, October 2017.

“Millennials and Women Are the New Faces of Giving,” Wealth Management, October 2017.

“Gender Lens Investing Gains Ground — But Can It Conquer Wall Street?,” Knowledge at Wharton, July 2017.

Funds Mentioned

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