Venture capital firms are failing to follow through on their pledges to support women startup founders, who already risk losing out on stable salaries when launching a new enterprise, according to leaders in the Australian fintech space.
Speaking at FinTech Australia’s Intersekt conference in Melbourne on Thursday morning, Cassie Bell, co-founder of insurance startup Butter, described a major difference between many investors’ public claims of support for women founders, versus the support they actually provide.
Butter, launched in 2019, secured $1.3 million in pre-seed funding led by Flying Fox VC, Quokka Ventures and FB10X adVentures.
While it is common for founders to strive through hundreds of meetings before locking down a funding round, it felt like Butter sat through “a thousand”, Bell told the conference.
Bell felt that early trepidation was not directed at her idea, so much as the fact both she and co-founder Steph Skevington are women.
“I’ve obviously never fundraised as a man or started a company as a man, so I don’t know the difference, but the virtue signaling in the investment space for startups is pretty wild,” Bell said.
“We will come out of almost every investor meeting, and in their investment mandate, or when they’re talking to you, or when you’re presenting on stage, it’s often, ‘We love female founders, we’re really supportive of female founders, we really want to get behind them.’
“And then you see 0.7% of capital being deployed [to all-female founding teams], which just doesn’t add up.”
Some investment teams gave feedback that Butter was too young to invest in, or that insurance was not in the fund’s wheelhouse, which Bell questioned.
“Is it really, or is it that there’s an unconscious bias sitting behind that?”
The panel discussion followed a women in fintech breakfast event, with conversations aired in the early morning session expanding through the day.
Katherine McConnell, founder and CEO of energy upgrade fintech Brighte, said would-be founders are in a bind: leaving the security of a salaried role to launch a startup is risky for all entrepreneurs, but the difficulties for women, particularly those leading a family, are particularly profound.
Those risks carry on, even for founders who do secure investment.
“One of the assumptions is that founders don’t get paid when they start, and when they do get paid, their remuneration is the upside of their founder equity,” McConnell said.
“I think that has to change. And I think if you don’t change that, you won’t get more females in the industry.”
May Lam, chief information officer at Australian Payments Plus, said the startup ecosystem, and by extension, the Australian economy, stands to lose out on major innovations should the structural barriers discouraging women from the fintech sector persist.
“I think that especially for fintech, we are here to challenge the status quo,” Lam said.
“We’ll make it cheaper, safer, easier, accessible, and we want to bring more financial inclusion and that’s why we are doing all this innovation.”
“So at all layers of the fintech ecosystem, you need to have the representation of who we serve, so that we build beautiful products, that we are customer obsessed, that we can change the game.”
Dom Pym, founder of Up and investment firm Euphemia, joked that audience members may be wondering why he was appearing on the panel.
But Pym reflected on Euphemia’s recent commitment to disclosing in-depth data on the share of its investments which go towards female founders.
“If you’re employing women, or if you’re putting together a board, or an advisory board or startup panel, we can do is publish that stuff publicly,” he said.
“You will be embarrassed, and that will make you change what you’re doing.”
The Intersekt conference will continue through Thursday, featuring speakers from across the Australian banking, finance, and startup ecosystem.
Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
