Albion VC, a venture capital firm, reviewed its portfolio of investments and found that women accounted for around 20 percent. The gender split is above average, but not quite equal.
Ed Lascelles, AlbionVC partner explains that this did not indicate any conscious or subconscious bias against women. The numbers in the portfolio reflect the number of women-led companies that are coming through the pipeline. “When we looked at companies coming to pitch, it was around 20%,” he says.
The London-based VC company began to think about the implications of this information for investors. If women approach VCs less than men, VC funds will miss out on a huge pool of talent.
These discussions led to the creation of Radia Accelerator by AlbionVC, along with SpeedInvest, another venture capital fund. The first cohort was aimed at executives who were preparing to leave the corporate treadmill to embrace entrepreneurship. The second cohort, announced last week, is aimed at early-stage entrepreneurs.
It is well known that women are underrepresented in VC portfolios. This is often attributed to the tendency of a male-dominated industry to support people who look like them and sound like themselves. In that context, more female VCs could be a solution to the problem. A new report by European Women In VC, made this point last month. It pointed out that female or mixed-sex teams have a better track record when it comes to investing in women.
Knowledge and Network Gaps
Radia Accelerator takes a different approach to the topic. Its goal, in essence, is to “accelerate growth journeys” of companies that have at least one woman founder. Albion, Speedinvest and other partners encourage female-led companies to make connections and learn more about growth processes at an early stage. “The accelerator aims at filling two gaps. Lascelles says that the accelerator aims to fill two gaps: “The knowledge gap and network gap”.
Who is this for? The project has evolved. When the project was launched last summer, it was primarily comprised of aspirant entrepreneurs with executive careers who were planning to leave their jobs.
In 2024 it will be a little different. This year, it’s for people who are already taking the first step to start a business. Lascelles says that they are just at the beginning.
The focus is very early. The program will cover topics such as finding customers (creating an MVP), finding customers, and working with cofounders.
On the networking side, it is important to make connections with participants, especially in terms of fundraising. Lascelles says that if you have a good network, you will have a greater chance of raising funds.
Radia Accelerator organizers made some grandiose promises in the early publicity for the project. They said that the project would help to nurture the next female unicorn founders. Let’s accept that not all founders can expect to lead a company to unicorn-status. What is a good result?
We want to create sustainable businesses in the first place. We are trying to create an ecosystem of successful entrepreneurs. Lascelles says that we would expect the majority of alumni to raise money in the next few years.
The accelerator will also be leveraging the expertise and connections of VCs in the U.K. The partners for this year include Seedcamp an early-stage funder; Créandum a startup support company; and Aviva, a major insurance company.
Missing out on New Ideas
Lascelles, as the organizers of the accelerator begin the task to sign up the next cohort I ask if a female-focused group requires a different strategy than a mixed group. Only in one respect. He says, “The biggest difference is that there will be many more women teaching in the sessions.” “Otherwise, it will be identical.
There are a number of reasons, including moral and societal, to encourage more women to join the VC community. However, there are also commercial motivations. If we don’t attract women, we risk missing out on great ideas that could become world-beating companies. Albion VC is not just interested in Software, but also in other entrepreneurial sectors.
As the startup landscape changes, women may find themselves at the forefront of new and emerging industries. European Women In VC, for example, found that venture capitalists were increasingly interested in companies with a social impact. This is often correlated with the presence of women on founding teams. The report found that women are well represented in certain key areas, such as food and health.
Radia Accelerator is only one part of a larger picture. It’s not the only accelerator that focuses on women. It does show that VCs are able to act to create a more equal business support and funding climate while providing a way for women-led team to find their path into the Angel/VC eco-system at a very young stage.