Investing in women

Women’s Equity Lab

Women’s Equity Lab is helping women founders gain economic security through women-led investments

Imagine you are a woman entrepreneur. You have come up with a new idea. You have developed a step-by-step business plan. Then, you hit a roadblock: you don’t have the money to keep growing. You need to find funding. Despite your best efforts, you can’t raise as much money as your male counterparts can.

This story often goes beyond one’s imagination – it is the sad reality of the business investment space.

About 16% of small and medium-sized businesses in Canada with more than one employee are run by women. Due to a lack of mentorship opportunities, financing, and support services, women-owned businesses see 58% less revenue than their men-owned business counterpartsFootnote 1 . Women founders defy stereotypes and overcome social expectations. They often do it without sufficient support. Much of the business world is built by men and for men. While the culture is changing, women still get squeezed out of mentorship and leadership opportunities because of underlying gender inequality in business.

The solution? Women investors. This concept is the driving force behind Women’s Equity Lab (WEL).

Stephanie Andrew, WEL founding partner along with Irene Dorsman, a founding partner from Vancouver, created WEL to address the chronic under-representation of women in early-stage investing.

“WEL is 20 times more likely than the average investor to invest in women. So, it is key to get more women connected to companies. Not just as silent limited partners in funds otherwise run by men.”

Working together to bridge gaps

Stephanie and Irene dreamed of WEL as a hub of ongoing learning and collaboration that could work to level the playing field for women founders and investors.

“The group, together, goes through the whole process of investing,” says Irene. “There is no investment committee. There are not two people that tell the group what to do. It is all done together. It not only works very well, but it is also a lot of fun.”

The first WEL investment group launched in 2017 in Victoria. Vancouver followed close behind in 2019. Now, there is an investment group in Toronto, and soon there will be groups in Manitoba and Silicon Valley. Each regional group is run by general partners—four or five women with diverse business expertise, including a strong investment background. Limited partners, or individuals who don’t need investment experience, make up the rest of the group. Once a WEL group is formed, all decisions are made together until the pooled funds are fully invested.

WEL’s format works – the proof is in who it attracts. Investors and founders alike are drawn to the unique mission and method. WEL considers themselves to be sector neutral. They have invested in everything from automation software to 3D human tissue printing to organic potato chips with the first compostable packaging. The organization has waitlists of investors who are keen to join.

This rapid growth revealed a new opportunity: WEL needed a national framework to onboard new groups at a faster rate. This realization encouraged WEL to bring a new partner to the table: Women and Gender Equality Canada (WAGE).

Creating a national strategy

WEL received funding from the Feminist Response and Recovery Fund in October 2021. This has enabled the partners to gather for planning sessions, attend the June 2022 Collision Conference in Toronto and speed up the deployment of capital to various ventures. It has also led to the development of a playbook—a national strategy to help roll out the WEL program across Canada in a consistent way by giving instructions on how to start and run a group while following the brand.

“It’s changing WEL from a ground-up, loose organization to something that’s really sustainable over the long term,” explains Irene.

“WAGE has been priceless,” says Stephanie. “We’ve been able to hire a national program manager. This has been invaluable in helping us organize a national strategy and create a playbook for local groups to use. Now we can share best investment practices, learn from one another, share deal flow and educate each other.”

Both Irene and Stephanie believe that the playbook will allow WEL to launch into other regions like the National Capital Region, so more women can learn about the world of angel investing (people or groups who use their own funds to invest in small businesses and entrepreneurs) and helping grow women-led start-ups in these new communities.

A change in the room

As WEL’s momentum picks up, the group is looking forward to a more diverse and female-led future.

“We have actually had male founders say that it’s embarrassing that they don’t have any females in their CEO, CFO role, or as advisors,” says Irene. “They want to add more women. When we get women involved in the early investment stages of the company, it makes all the difference in how things develop further down the line.”

“I want to stress that what makes WEL work is the active participation in the deal sourcing and the investment decision of all the women.  It's not just putting in money in a passive way and letting other people do the investing. It is learning by doing, participating collaboratively in making a series of three to five group-led investments.”

As women’s knowledge of investing grows, so will their confidence to act as decision-makers. “Being an investor indirectly leads to the board of directors,” explains Stephanie. “It’s well known that diverse teams have better performance. It really is to everyone’s advantage to have more women investors in the private markets.”

Since WEL’s launch, many companies they’ve invested in have received recognition and success. Start-ups such as Fictionary and Pocketed raised millions in seed round funding – the earliest stage of funding.

Today, WEL represents a powerful and growing network of over 130 female investors working collaboratively to change the business game – and the world is taking notice. Their one constant? Whatever the future brings, the unique collaborative philosophy WEL takes will never change.

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