Gender Lens Investing - Our Take
What is gender lens investing anyway?
Gender lens investing simply means, investing through the lens of female empowerment; making investment decisions that aim to earn a financial return and address the challenges that women and girls face across the world.
The term is a subset of ‘socially conscious investing’ and can include:
Investing in female-owned or -led businesses
Investing in enterprises that promote workplace equality, for example, in staffing, boardroom representations and supply chains
Investing in organisations that offer products or services that substantially improve the lives of women and girls worldwide
However, this investment outlook is not only about investing in women or equal workplaces, but it is also about turning the abstract idea of an investment’s benefit to women into an actionable investment strategy. It must be a strategy that takes a closer look at the role of gender in venture capital and take an approach that integrates gender-based factors into investment decisions.
Gender lens investing is also a process that focuses on gender throughout the investment cycle, including pre-investment activities such as sourcing and due diligence and post-deal mentoring and strategy advisory. This type of strategy should also examine the overarching mission of the investee enterprise to address gender issues, as well as its organisational structure, culture, internal policies and environment. Lastly, and often overlooked, gender lens investing should consider how the prospective investee’s financial and human resources signify a commitment to gender equality, namely their use of data and metrics for the gender-equitable management of performance and accountability.
Why should we care about gender lens investing?
Gender lens investing presents the investment community with an opportunity to rectify the disparity between men and women receiving traditional investment. The theory goes, if you simply invest in the broader market, you are implicitly investing away from women by default, as the majority of businesses have either been started, are owned by or run by men. In 2018, female founders received only 2.2% of venture capital dollars, with a combined total that was still $10 billion less than a single e-cigarette company received last yet.
If the moral imperative to ensure full rights for women and girls globally is not enough, investment into female-first enterprises results in a better return. Research shows that greater gender diversity on boards is a feature of long-term value creation and lower stock volatility. Studies also show that European firms with a larger percentage of women in senior positions have significantly higher returns than those that are male-dominated.
Interestingly, a recent IFC report also found that the private equity and venture capital funds with a greater gender balance in their senior investment teams generate up to 10-20% higher returns than those with a majority of male or female leaders. Despite this, a Big Society Capital 2017 survey exposed the gaps in more than 30 UK-based social investment house and found that women actually only represent 28% of executive or leadership roles in this industry.
The Craftory and gender lens investing
It is clear that investing in this way has captured the investment community’s imagination and appetite for change and the economic opportunity embedded in gender equality in business is profoundly apparent. As investors, we want to highlight our genuine and ardent commitment to promoting a gender balance in our decision-making process and are determined to celebrate this with the positive outcomes experienced by women and girls worldwide.
And let’s not forget ourselves. At The Craftory, we want to constantly be looking inwards to reflect on whether the diversity we promote is incorporated into our own processes and reflected in our behaviours. The gaps in the investment community and the subsequently lost opportunity to ensure rights for women and girls globally continues to motivate our own diversity and inclusion plans as well as our investment strategy.
Ruby Love: built-in, leak-proof, period underwear that actually works
TomboyX: home of size-inclusive, comfort-first, gender-neutral underwear
Female founders in ¾ investments (TBX, RL and PL)
50% female headcount at The Craftory
As long as we ensure that push for better transparency and increasing gender equality remains a priority for us all, gender lens investment into products and initiatives that help women and girls can continue to proliferate.
Investments and initiatives we love
The World’s Biggest Garage Sale - by SheEO in 2018
PEG Africa - by CDC Investing as part of 2X Challenge in 2019
The Billion Dollar Fund for Women - to mobilize a $1 billion dollar fund for companies founded by female entrepreneurs by 2020
Arlan Hamilton - Founder and managing partner at Backstage Capital
Female entrepreneurs who inspire us
Anne-Marie Imafidon - Co-founder at Stemettes (girls education)
Nayna McIntosh - CEO and founder of Hope Fashion (fashion for all shapes, sizes and ages)
Ade Hassan - Founder of Nubian Skin (nude lingerie and hosiery options for WOC)
Jenny Costa - Founder of Rubies in the Rubble (food waste)
Fran Dunaway and Naomi Rodriguez - Founders of TomboyX
Crystal Etienne - Founder of Ruby Love
Tell us about your brandThis post was co-written by Olivia Cramer, and Alice Schulz
Alice Schulz is a Content Specialist at Semetrical the digital and content marketing agency.
Olivia is a Deal Crafter at The Craftory, the alternative investment house on a $375M mission to back the world's boldest CPG challenger brands.
