For this week’s edition of FinanciElle “Statements” I had the opportunity to interview Karina Storinggaard, Co-Founder of Think Yellow.
Think Yellow’s mission is to drive investments toward advancing gender equality. Think Yellow enables people to invest with a Gender Lens by Listening and Connecting, Co-Creating invest-able vehicles with leading institutions, and advocacy.
Gender Lens investing is an area that I’ve been really interested in so having the opportunity to interview Karina was amazing.
Paolina: What is Gender Lens Investing and what do you see its impact being on female entrepreneurs who want to get funded and on female investors?
Seeing the world through a ‘Gender Lens’ gives us the insight needed to make choices in support of achieving gender parity. You can think of it as donning a special pair of glasses. Gender Lens Investment is evaluating invest-able entities through these special glasses, i.e. adding gender-related criteria to the investment analysis process.
For an investor (male or female), there are several ways to invest with a gender lens:
- Invest in women owned businesses. Examples include microfinance and funding of female founders in the startup world. Why? It acts as a major catalyst for development. The International Finance Corporation (IFC) estimates the unmet financing gap to be around USD 320 bn and only 6% of venture capital goes to women-led businesses.
- Invest in companies whose products and/or services help advance gender equality. Why? Five sectors (telecommunication, contraception, child care, water and energy) alone represent annual potential of USD 300 bn by 2025, e.g. 1.7 bn women have no mobile devices. What’s relevant for the financial sector is the fact that 1.1 bn women are still unbanked.
- Invest in gender diverse companies (workplace equity). Why? The benefits include collective intelligence, customer centricity, lower volatility, and better governance and talent retention.
For a female entrepreneur what this means is a very big question. The short answer: Be aware, pay attention and be creative with the know-how.
The fact is, there is a gender investment gap, as BCG puts it. According to their research, when women business owners pitch their ideas to investors for early-stage capital, they receive significantly less—a disparity that averages more than $1 million—than men. Yet businesses founded by women ultimately deliver higher revenue—more than twice as much per dollar invested—than those founded by men, making women-owned companies better investments for financial backers.
Some more facts:
- More than men, women founders and their presentations are subject to challenges and push-back.
- Male founders are more likely to make bold projections and assumptions in their pitches.
- Many male investors have little familiarity with the products and services that women-founded businesses market to other women.
SO, back to what it means for female founders, at first glance the current situation sucks, but on the other side, maybe this is the best thing that can happen. Why? This might be the reason you look further for what type of investor you want for your business (one that’s more aligned with your values) or maybe you find more sustainable ways to fund your venture.
An increasing awareness of these facts is arising by the investor community too, and this can be your advantage as a female founder. Search around, in my opinion do not adapt and become “men” by making the same bold projections. Look at organizations such as SheEO or Astia, Plum Alley Investments, and BBG ventures. More are coming.
Paolina: Why is it important to look at investments through a Gender Lens?
Not only because equality is a moral and social imperative – on top of this it brings enormous new opportunities, which adds to the attraction. How can we not look through a Gender Lens?
- Customer-centric products
- Unmet market needs
- Performance –
Paolina: What goes into creating an investment vehicle with a Gender Lens?
It depends on who you are.
In a nutshell it is about bringing the right partners, data and knowledge together to construct such products.
We have co-created products with two financial institutions, Julius Baer and Baloise. On one side working with experienced financial institutions as issuers of the products, while on the other side working with research experts, in our case Equileap, to ensure the transparency and quality needed in the data that serves as the base for the chosen listed companies in the products.
Equileap has researched and analyzed more than 3,000 companies according to their Gender Equality Scorecard. The scorecard is based on 19 different measurements of organizational behaviour and characteristics, divided into 4 main categories: Gender Balance in Leadership & Workplace, Equal Compensation & Work Life Balance, Policies Promoting Gender Equality and Commitment to Transparency & Accountability. Furthermore, companies not adhering to strict ESG standards are excluded from the list.
Paolina: What has being a Co-Founder of a company that takes a Gender Lens view taught you about being a woman in business and the challenges/opportunities that exist for female entrepreneurs?
Great question. We learn every single day and have a ton of learnings.
Mostly, I think it is an amazing opportunity to be a female entrepreneur, as we often see things through a different lens and see opportunities as well as e.g. understand a customer group that has been less understood.
At the same time, it is not without challenge to work on such a personal topic as gender, which includes all of us. Everyone has a “gender story” and collectively it is easy to get together and connect and build on the “gender story”. This is fine, but it is also of paramount importance that we are able to put our stories aside, while listening, paying attention, and being conscious about the topic. We can then add the gender lens and find all these amazing opportunities to discuss and co-create with partners.
And yes, we have also met a lot of more unconscious people who have their own stories and do not necessarily see or may I say want to see through these lenses. That requires a certain level of awareness to just let that go. I am learning to let things go – and it makes it a lot easier that there are plenty of men and women who are open and interested in looking at the world through these pairs of glasses.
Paolina: If someone wanted to get involved in Gender Lens Investing as an investor, what would they need to do?
My favourite answer: It depends.
It depends on ones’ experience as an investor, values and preference, and of course ones risk profile.
A more straightforward answer could be:
Research a bit about the theme.
Consider which lens to take. Most financial institutions do not offer all lenses, but rather focus on one. There are legal and other good reasons for this, although from a customer experience point of view I am not sure it makes sense.
Speak to professionals and ask questions. Many professionals might not know about the theme, and then keep asking or move on to other professionals. Shop around and look before choosing how and where to invest. If you are an experienced investor, you might be able to do this online and add some gender into your portfolio through the offering of gender lens investing products being added to the market as we speak.