Award-winning documentary Show Her The Money and Shebacks.me challenge the funding gap for female founders
Shelin David of Shebacks.Me discusses what needs to change to make VC funding more equitable for female founders
Award-winning US documentary Show Her The Money, which examines the relationship between VC money, financial power and female-founded businesses, premieres in Australia next week. The documentary follows the roller-coaster journeys of four female entrepreneurs overcoming setbacks to build successful businesses.
Their struggles with securing funding mirror the experiences of many Australian female entrepreneurs. According to the 2023 State of Australian Startup Funding report, female-only startups in Australia received only 4% of venture capital funding.
Shebacks.Me, a community of angel investors dedicated to providing alternative capital pathways for Australian women entrepreneurs and offering education for new women investors, is behind the Australian premiere of this documentary.
I spoke to Shelin David, Chief Rebel With A Cause of Shebacks.Me, about the state of venture capital (VC) funding and what needs to change to make access to funding more equitable for Australian female entrepreneurs.
There’s been a lot of reporting on the challenges female founders encounter with VC funding. Why do they still face the kinds of issues that results in only 4% of them getting funding?
In Australia we’ve had a lot of restrictive legislation and systems in place up until 1980s where women couldn’t take out business loans by themselves. They literally had to take a male with them.
It was only 50 or 60 years ago that women were allowed to have superannuation funds. And there was a time where when women got married, they weren't allowed to work anymore without the permission of their husbands.
These biases are still lingering in the systems and structures - you know, the fact that people think that if a woman gets pregnant, that's going to affect her brain and her ability to solve problems and to lead a company.
What changes would you like to see to make funding more equitable for female founders?
If a VC firm receives funds from a superannuation fund or any kind of government funding, I think they need to be legally required to report on gender funding data. Many industry super funds invest in VCs, so they're what you’d call a limited partner.
Recently the Queensland Government provided a significant amount of funding to VCs. That's taxpayers’ money being allocated to these VCs, so I think they have a responsibility to show that their outcomes are aligned with what we're talking about as a society in Australia, which is how do we create gender equity and equality? Which means backing and funding more female entrepreneurs.
I also think there are other things that VCs could be doing, like lifting up more women investors to decision-making positions in their firms.
In terms of the rest of startup ecosystem, what can be done on the investing side to encourage women investors?
One of the barriers is the sophisticated or wholesale investor test, where you need to have an income of $250,000 for at least two consecutive years, or net assets worth $2.5 million.
Historically women haven’t been able to create and accumulate wealth at the same rate as their male counterparts, so they're unable to meet the test. This creates a situation where there are more wholesale and sophisticated male investors than female investors.
So I’d love to see the government bring in education pathways and accredited courses as a way to allow people to become wholesale and sophisticated investors.
What can men do to support investment in female founders?
I want them to come to the party. I want them to push to hear more from women entrepreneurs. I’d also love to see more family offices or trusts (where both the husband and wife might be beneficiaries, but it’s really the husband making decisions) where more men are empowering their wives and the women in their lives to be able to use the family wealth to invest in women entrepreneurs.
You lead Shebacks.Me, which invests in female and non-binary founders. What is Shebacks.me doing to change things?
We started with revenue-based loans, which in itself is also a great option for women entrepreneurs because compared to bank loans, your repayment is determined by your revenue.
This year, we’re releasing courses for women on angel investing and how to invest in private companies and startups. We’ll be having workshops that will democratise the knowledge that they need to venture into that world.
We’re also going to offer capital strategy services for founders and entrepreneurs. Depending on what type of business they run and what sort of growth goals and investment they have, we’ll work with them to look at available dilutive and non-dilutive funding options and compile a capital strategy for them.
How do we also bring in women who aren’t wholesale sophisticated investors? We’re building network of businesses who have committed to contributing 1% of their profits into a fund that we're building to provide business grants to women entrepreneurs. Women investors who don’t have a business can contribute [to the fund] through a membership fee.
Why is it important to offer non-dilutive alternatives to VC funding, especially for female founders?
The VC model isn’t realistic for many entrepreneurs because you need to grow your business to ten times the investment. Secondly you need to have an exit plan. This doesn't align with entrepreneurs who want to achieve financial freedom so they can support their family, support themselves, give back to the community and more importantly, build a financially sustainable business. Sometimes companies that receive VC funding will continue to operate at a loss for many years.
We want to back more entrepreneurs who want to reach profitability quickly. We need more local businesses because a lot of VCs expect [startups] to scale and grow globally - "How quickly you are going to grow? What markets are you going to reach? Are you going to be a billion dollar cap value company which is a unicorn?”
We're not worried about unicorns. Rather than have a company that's bringing in a billion dollars, we'd rather have 1000 million dollar companies. That's more sustainable and more equitable for entrepreneurs as well.
In terms of why should there be non-dilutive capital options for women entrepreneurs, we want to ensure they continue to hold as much equity in their business as possible.
If they go down the equity route, they have to give part-ownership of their business. Some VCs or even Angel investors will say, “I don't just want equity. I also want to sit on your board. I want to be involved in the decision making.” And this can affect a founder’s position to be make independent decisions for the business that they've built from scratch.
So we try to help women retain equity in their business to ensure they can create their own wealth. That's wealth that they can then use to give back to the community and support women.
What would you like the audience to take away from watching Show Her the Money?
I think it will be powerful for the audience to hear from women investors on why they back female entrepreneurs. It will empower women entrepreneurs to know there’s support for them.
I think it will also empower women who are interested in investing but don't have the confidence to see how they can be an investor and give back to the community through startup investing.
Show Her The Money premieres in Sydney and Melbourne next week.
MELBOURNE: Wednesday 26 June 2024, 6:30pm - 9:30pm AEST
RMIT University, Building 80, 435-457 Swanston Street
SYDNEY: Friday 28 June 2024, 4:30pm - 7:30pm AEST
Fishburners, Level 2/11 York St, Sydney