Fifty women-led businesses will get a boost in the next four years from a new $20 million investment fund.
Prominent businessperson Theresa Gattung is a cornerstone investor in the fund, which she says will enable female founders to make an impact internationally.
Theresa Gattung Photo: www.theresagattung.com/
Businesses with either female-only or mixed-gender founders will be selected for the investment fund, which is known as ArcAngels Fund II, Gattung tells Jesse Mulligan.
Some will be start-ups but more will be what she calls "scale-ups" – companies already operating successfully in New Zealand and now trying to scale up to export to Australia or the US.
Feed My Furbaby – a subscription dog food service founded by a husband-and-wife team – has received the fund's first investment, Gattung says.
"That company has been going several years and it's doing very well in New Zealand but it now wants to crack America. You can't crack America with the cash flow that you get from a New Zealand business. You have to actually have a lump of money to get any sort of foothold anywhere in that market."
Too often women's businesses stay small because women tend to be less financially confident than men and either can't or don't want to take the risk of expansion, she says.
Yet businesses led by women are generally more successful than those headed by men, Gattung says, and there are two theories as to why that is.
"Women are a bit more consideration when they start something. They're solving a real problem and therefore that business is likely to be more successful.
"Another view is that if men and women were funded equally there'd be no difference in investment returns. But because it's harder for women to get funded only the best female funders get through to funding. Therefore if you do back them, you're more likely to make higher returns than funding all the men, which includes great men and mediocre men."
ArcAngels Fund II is currently a quarter of the way to its $20 million investment goal. With a minimum investment of $50,000 the fund is aimed at people who are already "reasonably sophisticated investors", she says.
While some of the businesses that are funded won't take off and some will go "spectacularly well" this kind of investment is a long game, Gattung says.
"It's not a charity but it's a long-term return. It takes years for companies to build scale, go overseas and then do what's called an 'exit' - when you exit in some way and the original investors get a return of their money, hopefully."
ArcAngels Fund I, which Gattung also invested in, raised $2.8 million for female-led businesses but that amount of money isn't enough to "lead deals" and cut deals", she says.
Entrepreneurship is the way of the future, Gattung says, and investment in women entrepreneurs is more than financial.
All of the 25 young female leaders honoured in last year's Y25 Awards were entrepreneurs, she points out.
"There wasn't a single woman there who was working for a paycheck and had a boss. And that is the future – if women aren't supported to stand powerfully in that future we're not going to be able to create a better world than the one we're currently living in."
