Solutions to Unlocking Gender-Smart Capital at Scale Through Private Market Funds
By Suzanne Biegel and Bahiyah Yasmeen Robinson
After the pandemic flattened our 2020 plans for an in-person pilot of Capital Connect—the first-ever global showcase with the goal of connecting gender-smart investors and fund managers with a gender lens—it seemed unlikely we could resurrect it. But then something unexpected happened—over the course of the pandemic, and especially in the last few months, we’ve seen the amount of capital invested into private capital vehicles continue to flow. We wanted to ensure that a larger portion of those investments are inclusive of gender-smart funds, especially those led by women and people of color. With a thriving Capital Connect community asking for ways to connect with LPs, and a set of LPs that are asking to learn more about gender-smart funds, we knew that we had the inspiration needed to bring our plans back to life.
“We realised we were co-creating with some of the best and most committed investors, as well as people running exciting structured vehicles in private markets with a gender lens...and we needed to relook at what might be possible.”
When we started the GenderSmart Investing Summit in 2018, we were committed to creating a “pitch free zone” where investors could speak freely about how they plan to move capital more strategically, with more impact, without the need to worry about being pitched. A year later, we realised that we were attracting and co-creating with some of the best and most committed investors, as well as people who were running exciting structured vehicles in private markets with a gender lens, and that, given our goal to unlock gender-smart capital at scale we needed to relook at what might be possible.
From the start, we knew we didn’t want to make Capital Connect a classic “pitchfest.” There are so many things wrong with that model; in fact, we were talking about how pitchfests are often modelled after a very masculine, competitive, high pressure, investment norm. We’re also not a broker/dealer – we’re not setting out to make money from these connections, but to see what we can catalyse. We know we are not the first people to break the mold on format, but we believe we need to keep reinforcing a range of new approaches.
So in 2020 we took a hard look at what we were doing as GenderSmart and said, if we’re serious about what we and others are calling JEDI – justice, equity, diversity and inclusion – we should co-produce Capital Connect with a black woman-owned firm who is at the top of their game and whose value set and intention to support diverse emerging managers aligns with our own. Voila: the VC Include + Gender Smart collaboration on Capital Connect was born.
First, we had to make some decisions on our parameters for our “first run.” We decided to start with funds raising at least $15 million and which had already raised some capital, and call it a “showcase” with a twist. We chose a mix of fund sizes, structures, and types of capital allocation (some are evergreen structures not set up as funds, but as permanent capital vehicles.)
We decided to prioritise funds that have an explicit gender lens. Not all lead with gender equity, but they must be explicit in either paying attention to women-owned or -led and gender-diverse teams, companies with good employment for women and men, or products and services that demonstrate gender intelligence and address women’s needs. In addition, many are investing in companies tackling climate change, health and well-being, the technology solutions that we need to have a more sustainable and healthy future, and other market trends that are underseen. And of course we’re looking for smart, capable fund managers – but with an expanded view of what “track record” means. We also wanted to pay attention to how these funds are investing, not just what they are investing in.
We thought about whether to structure the events according to geography, to SDGs or other thematics, to sectors, or by returns and impact profiles, and we decided, for this first round, to go with geography. We have planned 8 showcases – 6 regionals, one for global funds (those investing in multiple regions), and an extra session for North American funds with an explicitly gender plus racial/ethnic diversity lens.
“The time is now, and by working together, we can accomplish so much more.”
We also decided that the best route to maximise the number of investors in the room was to enlist a set of terrific co-inviters – we are delighted that Gratitude Railroad, Toniic, the GIIN, Confluence Philanthropy, The ImPact, the 2X Collaborative, AVPA, AVPN, Sankalp, High Water Women, Women Moving Millions, and Invest for Better are co-inviting with us. All of our partners get that the time is now, and that by working together, we can accomplish so much more.
Collectively, the funds that applied for this first round represent billions of capital already raised, with a fantastic set of existing investors, and billions to be raised. Given how much capital went into funds in 2020, and how little of that went to women and people of colour-led and focused funds, we know the market is seriously missing out on this opportunity.
We are on a journey to demonstrate, in 2021, that there are great funds to move capital to, and that investors really can come to the table and move capital. Over the 8 showcases, investors will get the chance to hear from a sample of 40 outstanding funds, but there are many more. If people and institutions are serious about finding and backing the innovators that we need, both at the fund management and the entrepreneur level, then there is no time like the present.
Capital Connect runs from March through May.
Photo by Markus Winkler on Unsplash