The founder of an organisation dedicated to supporting female entrepreneurship says it’s based on the decidedly female strategy of radical generosity.
“We weren’t going to go international until 2018,” Saunders told the Listener. “But then I came to New Zealand. There’s a definite move to action here that we haven’t seen in other markets.”
According to research by business accounting provider MYOB, women now own 44% of small and medium businesses in New Zealand – an increase of almost 50% since 2012. But securing business funding and venture capital has long been a challenge.
Alex Mercer, Xero’s head of global communications, is a member of the advisory board of ArcAngels, an angel investor organisation that focuses on businesses led or managed by women. The size of the investment pool is the biggest issue, she says. “Female founders attract more capital where there are more female investors in the pool.”
ArcAngels has a two-pronged approach: providing investment and educating investors to enlarge that pool. She says any effort, such as SheEO, to increase available funds is positive, “especially in a place like New Zealand, where capital is tight”.
SheEO, which aims to raise $1 billion from a million women committing $1000 each by 2020, was launched in 2015, with a pilot in Canada, in which 500 women lent $500,000 to five female-led ventures. The funds will be paid back over five years and reinvested perpetually. Today, there are 1500 activators and 15 companies in the portfolio – 10 in Canada and five in the US. Saunders, who has co-founded and run four ventures, in Europe, Toronto and Silicon Valley, says what she really wants is for women to create a new economic model.
“It’s clear to me that we were not at the table to design this world and therefore it’s not working as well for us as it could if we had been.” She says only 4% of venture capital goes to women, and 90% of venture capitalists are men. Why? “Most of the people writing the cheques are men”, and they fund what they feel comfortable with, she says.
Mercer agrees. “You invest in what’s familiar to you.”
SheEO was born after Saunders considered the “very unforgiving business environment”, where you have to hit milestones or fail, and wondered what the world would be like if “we were radically generous with each other”.
Radical generosity means each activator’s $1000 isn’t an investment per se, as the funding is provided with no expectation of any direct financial return. The benefit lies in the relationship between the activator and the entrepreneur, the social capital, expertise, networks and future good, says Saunders. It’s a “leap of faith” that this will create more meaning in your life.
For now, SheEO’s activities are limited to women. “It is important that women realise we can do this together. We have everything we need to change the world.”
The criteria for companies are simple: they must generate $50,000 of revenue, be majority-owned and led by women and, importantly, be able to articulate how the business contributes to creating a better world. “We don’t call it social investment per se, but you need to not be digging big holes in the Earth and doing harm. If we are all going to put our networks towards these companies, we want them to be benefiting society,” Saunders says.
So far, companies include ventures that design, build and market durable walking-bikes for people with mobility challenges, called Alinker Inventions; Little Lotus products that use proprietary Nasa technology to keep babies at the perfect temperature and help them to sleep better; and an online system called Callisto, for reporting sexual assault.
The companies are selected and supported by the activators, which is one of the key differences between SheEO and other venture-capital funds, regardless of whether they focus on women, says Saunders. Companies get exactly what they want from the network within 24 hours, creating an “on-demand, modern girls’ network that we’ve never had before”, as well as early customers.
For New Zealand entrepreneurs looking further afield, this network could help them find easier access to North American markets. “If you are a Kiwi company and you want to expand to those markets, you tap into the thousands of radically generous women in those communities who help you,” she says.
Saunders says she used to start every sentence with “imagine if”, but can now point to concrete results. The first five companies that have been involved for just over a year are generating on average 40% revenue growth each year.
The time for SheEO is right, she says, noting the global political backdrop. Even US President Donald Trump doesn’t faze her. “Women are coming together and are activated more than they have ever been because of this administration. Political awareness is much higher and people are definitely looking to take action, so that’s a good thing.”
Kiwi women surprised her with their immediate positive response to the idea. “The thing that stood out is how fast women get to action here,” she says.
By the end of the conference, 180 women had expressed an interest in being activators and several had put forward business ideas. Lawyers are looking at the best model, and the SheEO website’s “choose your region” tab now lists New Zealand as well as Canada and the US.
Saunders says, “It’s exciting how fast it’s all coming together.”
To get in touch with SheEO New Zealand, click here.