Research consistently proves that more diverse teams yield better results. Capria has embraced this knowledge since inception and is now increasing integration of gender smart investing principles into capacity development within the Capria Network.
Further, IFC research shows there is a strong correlation between gender balanced leadership and financial performance. The funds with gender-balanced leadership outperformed their unbalanced peers by as much as 20% in annual returns.
We caught up for a quick Q&A with Capria Network Member, Unitus Ventures’ Investment Director Radha Kizhanattam, on how and why to increase women’s participation in investing and the kind of impact it will bring within the investing ecosystem in emerging markets. Here are the excerpts:
How does diverse leadership make your fund unique or give you an advantage?
Radha: 48% of the Indian population is female. That makes about half the customer base of the 1.3B+ population in India; a huge customer segment to address. Yet, there are not many women starting companies or backing them. Having women on leadership teams helps teams understand “women as customers” better and more importantly “pick winners” that serve this population better.
Additionally, venture capital is a long-term business. As fund managers, we work with the entrepreneurs we back, for at least 5 – 7 years (at an early-stage fund). While most investors regardless of their sex and age, have certain traits in common for e.g. ambitious, intelligent, etc, studies have shown that women are more empathetic, patient, fair and balanced v/s men, and hence, easier for founders to work with.
What is the biggest challenge you see today resulting in the low numbers of women in fund management?
Radha: One of the biggest barriers is the amount of General Partner commit that will be required as a fund manager before raising external capital.
What tip can you share for women who have the goal of becoming a fund manager?
Radha: Build a strong track record – make small angel investments and show successes. Alternatively, be a founder, start and build a business. Once you get it to a certain scale, team up with someone who is well networked in the investor (LP) ecosystem to then jointly start a fund.
What is the biggest challenge and/or what are positive trends you see today in making capital available to women entrepreneurs in emerging markets?
Radha: In my opinion (India specific), the problem is not with capital available to women but more the dearth of VC-fundable startups that are started by women founders.
How will you use your leadership position as a fund manager to drive gender equality, health, rights, and well-being of girls and women?
Radha: Proactively look for and back startups that address the many gaps/opportunities such as healthcare/health tech startups in the women and child health area with an example being our investment in UELS which has built and is commercializing an innovative point of care breast cancer screening product/solution across emerging economies. Additionally, I work with my portfolio companies and encourage them to hire for every opportunity as a “gender neutral” opportunity.
Capria offers Gender Lens investors the opportunity to support and benefit from funds with female leadership. Six out of Capria Networks 19 fund managers include females in leadership, with two teams that are exclusively women-led and 4 teams that have women partners or principals.
More than 30% of Capria’s Network Funds Have Women in Leadership Roles. Read here how it is adding value to the emerging market investing ecosystem.
Read what other network members have to say about gender-smart investing:
- Lessons in gender-smart investing from Terra Global Capital, a Capria Network member >
- Lessons in gender-smart investing from Brightmore Capital, a Capria Network member >
- Lessons in gender-smart investing from Lateral Capital, a Capria Network member >
- Lessons in gender-smart investing from Capital Invent, a Capria Network member >