Sacha Celestial stands out.
Not just for her unusual name, but because, along with her business partner Tessa Clarke, they have won a slice of the meagre 1% of UK venture capital funding that goes to female-run companies for their business, Olio.
Olio aims to tackle the problem of food waste by connecting people who have food they don’t want or need, with neighbours who do.
Ms Clarke and Ms Celestial believe that because their business is primarily targeted at women, it hasn’t resonated as much with male investors.
After three successful rounds of funding, they say that they’ve done noticeably better when pitching to women. The trouble is, the venture capital industry is still overwhelmingly dominated by men.
“Our conversion rate with women is north of 70%, compared to 5% or 10% for male investors,” says Ms Celestial.
“There aren’t nearly enough women with cheque-writing abilities, so in our experience, we believe a lack of diversity at VC (venture capital) firm level is a real challenge for female founders.”
The latest report from Diversity VC, which monitors the make-up of the industry, shows that 63% of UK venture capital firms have no women at all in senior investment positions.
Why investors matter
The UK venture capital industry is small, but packs a big punch. The 171 firms based here only employ an average of nine people each.
But the money they invest really talks. In 2018, venture investors in the UK committed £6.3bn to early-stage companies. The UK is the largest venture market in Europe and the fourth-largest in the world.
As in the television programme Dragons Den, venture capital firms listen to hundreds of pitches from start-ups and try to pick the winners, giving them money and advice. This can turbo-charge small businesses, enabling them to grow quickly and make a leap on to the global stage.
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Francesca Warner, the co-founder of Diversity VC, says these decisions can have an impact on society.
“VCs invest in early-stage technology companies, which have the potential to become influential powerbrokers in the future,” she says.
“As venture investors enter the fray so early on, they can make a huge impact on the make-up and culture of the organisations that they fund.”
Talking at cross-purposes
The number of women in the industry is important because it influences where the money goes.
As entrepreneurs such as Ms Clarke and Ms Celestial have found, investors are more likely to make investments in businesses that reflect their interests.
“Two-thirds of our user base is female and at the end of the day investors are humans and it’s much easier to get your head around a product if it’s something you can directly relate to,” they say.
The recent Alison Rose review of women and finance found that many women entrepreneurs encounter a lack of understanding and imagination from investors evaluating their business ideas.
This judgement can extend into the personal lives of the founders. Inside the confidential walls of a pitch situation, the gloves are off.
Groups of female founders swap stories about male investors concerned about making an investment in someone who is pregnant – or if there is a suspicion they could take time off to have a child.
Ms Clarke says that as a result, when they pitch, “we make it very clear we’re not having any more children.”
This all adds an extra layer of fear to the already fraught process of fund-raising – with the added knowledge that as women, their chances of winning funding from investors is slim.
“On an emotional level, it’s challenging. You find that you’re second-guessing yourself and anything you say by thinking, ‘What would a man say or do?'”
Old boys’ network
Reports such as Diversity VC’s are raising awareness in the industry, but Warner says it’s still primarily built on networks.
Because the funds themselves are often small, they tend to employ people through introductions and word of mouth.
And unlike other industries, there’s no overarching regulatory body and in many cases, a lack of transparency and accountability.
Ms Warner, who worked for a VC fund following a career in advertising, explains: “Most of the things they do are about backing people they know and come across, that they can trust and rely on. They don’t follow formalised processes.”
Their size and structure also means there is little staff turnover. Partners in funds have to put their own money in, which means they are committed to it for the long term.
Case for change
Veteran investor Saul Klein, who was part of the team behind Skype, says the business case for a diverse team is overwhelming.
“Half of our team is made up of women. We think that diverse experiences and skill sets promote better decision-making and we’ve seen in the last few years that our ability to attract and be a good partner to female founders has improved,” he says.
“It is not that there are less female founders, but the people who are gatekeepers to the capital are predominantly men.”
This view is shaping the industry and that brings more women entrepreneurs to the table.
Zoe Castro, an investor from Octopus Ventures who backed Olio, says that for them, backing women has had a snowball effect in breaking down the barriers to entry.
“In the last 24 months one in three of our investments has been a female led company, so we now have a pool of ambassadors and people who look to us and see us as a source of support,” she explains.
The pipeline to top venture capital jobs is improving and the number of junior women in the industry has gone up by 8% since 2017.
More initiatives are being put in place to help women into cheque-writing positions.
For the founders of Olio, this means there’s never been a better time to start a company
As they say, “Now is an amazing time to be a female founder, because the investment community is recognising the importance of diversity and wanting to double or triple down on it.”