I like to put my money where my mouth is — as does the co-founder of my business, EnterpriseAlumni. So late last year, we set ourselves the goal of being the first software company of our size and scale to boast a gender-balanced shareholder structure.
This target has been achieved before by companies raising $1m-$2m but we wanted to prove it was possible to do so beyond seed stage, when more was at stake. We recently completed our third round of fundraising, bringing our financing to $12m. And the gender balance of the shareholders is 50:50.
EnterpriseAlumni is the market leader in alumni management software. We help organisations, including HSBC, Nestlé, P&G, Wells Fargo and Pearson engage with their corporate alumni community. We have one male and one female founder; equally divided founder stock; equal say.
Sadly, we are an anomaly. In the technology sector, diverse teams are rare. A 2018 study found that women comprise 35 per cent of start-up equity-holding employees in Silicon Valley yet own just 20 per cent of the equity. Worse, women account for 13 per cent of start-up founders but just 6 per cent of founder equity — even when they are on founding teams and assigned equity, it’s far less than their male counterparts.
Funding figures are just as bleak. In the US, just 2 per cent of investment into start-ups goes to women despite 38 per cent of founders being female. Three-quarters of venture firms do not have any female partners. No doubt you have heard it all before. It’s depressing.
That is why when we set our target, everyone told us we were mad: fundraising is challenging enough without trying to achieve the unachievable; women don’t invest; it was a poor use of our time when one fund could write a cheque. They had a point. Fundraising is hard and this was so more challenging than we had expected it to be. But we took Nike’s advert narrated by Serena Williams to heart: “If they want to call you crazy, show them what crazy can do.”
First, we had to seek a broader range of investors. Instead of taking only institutional money (typical for a business like ours) we had to find men and women who supported our goal. There are some amazing initiatives to support diverse teams, but the ones we found tend to focus on early stage start-ups. Backstage Capital, Portfolia, Aligned Partners, Halogen Partners, SoGal and Jane.vc are making an impact on both sides of the Atlantic. Many focus on consumer companies, rather than those that serve businesses. So a lot of those pots of cash were unavailable to us.
We drew support from Angel Academe, which backs teams with at least one female founder and tapped its syndicate for four times as much as it had ever raised before. The women’s wealth management firm Addidi was also quick to help us identify investors. Our female investors include entrepreneur Julia Ross, who listed the company she founded on the Australian Stock Exchange in 2000, and Aileen Getty, whose foundation supports endeavours focused on building fairer communities. Outgoing SAP SuccessFactors president Mike Ettling and Lord Mervyn Davies, co-author of the UK government’s report on gender equality on boards, also put in money. As did three funds: Backed, Pentland and B&Y.
Our gender-balance goal is just one step towards change, but it’s a start. So are other efforts such as the Billion Dollar Fund for women and the individual investors, syndicates, venture funds and governments who are trying to make financing fairer. I hope we can be part of a positive change in how women invest and diverse teams are funded.
We have reached our goal of half men, half women. As we head into a fourth funding round we have a tribe of shareholders and investors who support our mission as well as customers with whom we know our aims resonate.
To me, that’s winning and not at the expense of anyone.
The writer is co-founder, with James Sinclair, of EnterpriseAlumni
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