Female-only startups are receiving less than 3 percent of every dollar invested, and only one-in-10 are getting any investment at all. Photo: CAIA IMAGE/SCIENCE PHOTO LIBRARY
White men get the lion's share of venture capital investment in New Zealand, with female-only startups receiving less than 3 percent of every dollar invested, and only one-in-10 getting any investment at all.
The Gender Investment Gap (GIG) research, conducted by the University of Auckland, indicated female-only startups received just under $4.6 million of capital investment from a total pool of $160m invested by 20 venture capital funds last year.
"These are appallingly low figures, but what makes them worse is the disparity," GIG co-founder Jenny Rudd said, adding the main problem was a white-male bias favouring white males in business.
She said international research suggested between 85 and 90 percent of New Zealand venture capital dollars were controlled by white men, who were investing in people who felt safe and looked like them.
"So then that very narrow group of founders gets nearly all the capital, and so they've got all the resources to build the biggest companies."
She said it therefore followed that people believed successful businesses were male-led.
Rudd said even when female-led businesses got backing, they only got a fraction of what male startups got.
"These figures are a wake-up call for the investment community.
"Entrepreneurialism isn't a gender-specific skill set. So why do we overwhelmingly only invest in one type of person," Rudd said, adding the answer was obvious.
"The only thing that's going to change it is when investors who have capital say yes. If you just say yes to the women founders ... that will solve so many things."
Rudd said there was plenty of research to indicate women in business were a good bet when it came to a return on investment.
"There's like a tsunami of data that shows that women-led businesses return more investment on every dollar invested, (and) have a higher return on every dollar invested than men-only led businesses."
She said recent research by the United Nations indicated investment in women-led businesses could add $5 trillion to the global economy, which equated to about $32 billion to the New Zealand economy.
"And that would take the form of job creation and taxes and all sorts of different things.
"And so, you know, the data shows that it's a really, really good investment to invest in women."
University of Auckland Business School Professor Christine Woods said the low level of investment was hard to justify to the young undergraduate women in her programme.
"Greater recognition of these inequities is an important step towards a commitment for more equitable funding decisions to help support tomorrow's female entrepreneurs," Woods said.
Dame Theresa Gattung. Photo: www.theresagattung.com/
GIG co-founder Dame Theresa Gattung said New Zealand could not afford to ignore the untapped potential offered by female-led business.
"The data is clear: investing in women isn't just the right thing to do, it's the smart thing to do," Gattung said.
"It's time for all of us - investors, policymakers, and business leaders - to step up and ensure that capital flows to the best ideas, regardless of gender."
Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
