"Instead of trying to change the system, let’s build a new one": an interview with Vicki Saunders
Vicki Saunders launched SheEO in 2015, a perpetual loan fund powered by the ‘radical generosity’ of several activators who each contribute the equivalent of 1,100 dollars (or $92/month) into a pool of capital for women-founded ventures solving social problems (or, as Saunders describes them, ‘the world’s to-do list’). SheEO launched in the UK, their fifth country, in late 2019, and have a pipeline of 70 further countries keen to replicate the model. The long-term goal is to reach a million women activators by the end of this decade, and a billion dollar fund helping 10,000 entrepreneurs every year.
Our friends in Australia call this the “gateway drug to investing”, which is an interesting phrase. Because you're not worried about getting your money back, you trust a little bit more. We’ve noticed that our activators - the people with the influence, the networks, and the expertise - are getting into a deeper relationship with the ventures who are the next generation of innovators. That's been a real gap in the marketplace, and it has started to create this upward spiral of people asking, “what else can I do?” beyond the radically generous contribution of 1,100 dollars.
The phrase 'in relationship' comes up a lot in your podcast with Joy Anderson at Criterion Institute. Can you talk a bit more about that? Because there’s very different language being used in the work you both do.
One of the things I've learned is if you want new behaviour, you have to create new language. Everything in financial services is a transaction - "What's in it for me, I'm just doing this transaction, there's no human involved" - and we want to move that to a relationship. When you're in relationship with people it's a very different kind of experience.
With SheEO, when you come into this network, you're voting for who you're excited about. You then help them with marketing by talking to your friends about it, with introductions through your networks, with influence if you have it to help them get some bigger customers. And then the next thing that comes up is, "she needs more money to scale, we should help her."
This is the next level of capital that we're unlocking - activators in our network are becoming investors. And it's because they're in relationship with one another..
What is standing in the way of you achieving your long term vision for SheEO?
This is just phase one - we want to create the Bank of Radical Generosity. What would that look like? What would a bank look like in 10 years? [Today] when I look at the capital markets, our commercial banking, it's not very entrepreneur-friendly. And it's really challenging to get to scale. We have a woman founder in our network who, like so many small and medium sized businesses, has a struggle with cash flow because her purchase orders are paid out 90 days or more. And the best offer from the bank at an early stage - at a million bucks in revenue, trying to scale up - is it costs 13% for a line of credit to fund your POs. Which is completely insane. Imagine if we could have better terms for entrepreneurs who are building socially and environmentally sustainable jobs and scaling out healthcare.
We're at a stage right now where we're still using capital that's at odds with the values that we want to live with. We're ploughing billions of dollars into companies like Uber and Lyft, who are decimating jobs. I don't want to live in a gig economy world. I want to live in a world where people are paid a living wage. And I want to invest in that kind of world, versus just seeing the rich get richer and flipping companies.
We need to rethink what we value. We need to rethink how we're using our money: all of our capital should go towards working on the world's to-do list. The barriers in front of us are people who are still sitting in accumulation culture, thinking, I don't have enough, I need more for me. That's a big mindset shift.
There are many people yearning for more meaning, more connection to be in relationship with people in their community, to be making a difference. We need to get back to having these connections. What we're doing is a massive rethinking of economic development: we have a model where you can aggregate local capital around a certain set of criteria, in this case gender and social impact, and then have a completely democratic voting process. Everybody who contributes capital is voting and using all of their social capital to help achieve the goals for those businesses. Imagine that happening in every community. That is an economy that I want to live in.
Where are men in this for you?
We’d be happy to take their money :-) They're welcome to contribute capital, but in the name of a woman, because we have women deciding on the kinds of companies that we support. This is not the long term strategy. We recognize, of course, that to transform the global economy, we need everyone involved. But for now, activating women’s capital to support women innovators is our goal. We won't have women-founded, scaled up, women-led companies unless women start writing cheques.
It's not happening by just showing the data: we've had data for decades and nothing's changed. So number one, activating women's capital, number two, looking at the kind of world that women fund, which is quite amazing. We've funded 63 ventures so far, and every one of them has an incredible innovation with high social impact. I think we need more balance in our global economy, but long term this all gets integrated.
What you said about the data is interesting - I was going to ask about the role data and tools play in driving deeper impact.
I'm deeply frustrated by the fact that everyone's like, 'Well, let's get some data'. Did we have to have data for men, to show what they would do? The bar is so insanely high for women. Women pay their debts, we are more efficient with capital, we get to profitability more quickly; we do more with less.
There's so much unconscious and conscious bias built into our systems and structural inequities that need to be rethought. So instead of trying to change the existing system, we're going to create a new one. We're focused on creating a whole new model instead of levelling the playing field. Because if you go up to 30,000 feet and talk to leading economists like Mariana Mazzucato, if you look at the data from Caroline Criado Perez, if you look at new models by Kate Raworth, all these women are talking about how our economic models need to be rethought.
Very cool. What else do you think can be done? Do you think it's worth trying to shift the existing gender narrative?
I've been thinking an awful lot about this. It's really about power, who has the power and who doesn't have the power. In our network, the 14-year-old activator has the same power as the CFO of the biggest bank in Canada. They each get one vote for their contribution. So there's not only a gender focus, but there's a power restructuring. There's a democratic decision making process. I think if you are looking at total transformation, it's more about power than gender.
What else can be done to unlock more gender smart capital?
Part of the thing I've witnessed over the last 25 years is that you really need to show, not tell. That's one of the biggest challenges. Can you actually scale up a company paying a living wage? Most investors would say no. What we're trying to show - with startups like Alinker - is that you can actually have 30% margins, pay a living wage, and be scaling up.
Complete this sentence. How might we...?
How might we create a world where our capital is going to those in need, versus just to those wanting to make more money?
Originally published on LinkedIn. Photo credit Dahlia Katz.