The case for backing female founders: perspectives from Pink Salt Ventures

While the title of this article may seem trite and the female founder thing might feel like a stale conversation, the fact remains that in the UK, there have been no VC funds categorically dedicated to female-led companies. Until recently, anyway.

In industry metrics, we see the numbers stagnating, with roughly 90% of venture funding going to all-male teams over the last five years. But where there is a problem - a funding gap - there is also an opportunity, if your baseline assumption is that talent is equally distributed while opportunity is not.

Female-led unicorns have been increasing year on year globally. Future generations are also less beholden to stereotypes of who should and should not be a founder or a funder, more so than at any point in history. Still, female founders are dogged by investor biases, both conscious and unconscious, that they’re not building VC backable businesses, influencing the questions they get asked and their chances of fundraising success.

Many highly reputable VCs (that we’ve spoken to) are tethered by historical bias and sit within fund structures that incentivize business as usual, making a case for new funds to fill the void. They explain the data away by asserting that women just want to build another lifestyle business. We’ve also spoken to top tier VCs who are delighted that funds like ours exist to create the feeder pipeline into other funds, many of whom would love to back more women-led companies and get access to the markets they’re building in and for.

At Pink Salt Ventures, we bring a fresh, unbiased perspective, an excited willingness to back women who think big, and we’re equipped to get it done. We understand how to close the gap because we speak the same language as the founders we back, and can quickly grasp their vision and what is possible. We see our thesis play out across industries, creator economy, fintech, health and wellbeing. And we find the market-making technology companies that are building the world we want to live in, and invest at the earliest stage.

The gender health gap is well-documented, and is now being addressed through technology, though it’s yet to be seen whether big pharma gets on the bandwagon (women were excluded from drug trial studies until the 90s, and approx. 90% of drugs have never been tested on a female). But it was recently revealed (and popularised) that women are 32% more likely to die from an operation conducted by a male surgeon vs. a female surgeon, and that implicit sex biases are the most likely culprit. This brought to the fore the need for scalable technology solutions, as well as changes in medical curricula. And most medical schools and residency programs in the western world don’t teach aspiring physicians about menopause, the 10 year life stage that all women undergo (and usually, at a time when they are most affluent), and that brings an increased risk of heart disease, osteoporosis and cognitive decline.

We see the need for co-gendered teams in FinTech too. Millennials and Gen-Z are financially illiterate, but millennials are soon to be the richest generation inheriting £50B by 2040. Most investment platforms are male-dominated from a founding team and user base perspective. We like technology solutions built by diverse teams, thereby circumventing the problem of gender bias in the technology itself. We see the results in user bases that are 55/45 male/female or thereabouts, indicating that at scale, these platforms will capture almost double the audience of incumbents.

In this cycle of unbundling within media technology, the creator economy is compelling. Creators can distribute and monetise their content directly (e.g. Substack, which unbundles journalists from newspapers, Cameo which allows celebrities to sell social capital, Patreon, etc.). But this also presents the opportunity for technology solutions that cater to creators - the enabling technologies, or picks and shovels. And refreshingly, this is a female-dominated industry. AI technologies like GPT-3, which didn’t exist a decade ago, enable innovative content creation tools that allow not just creators but also business leaders, solopreneurs, to produce high quality content and communicate effectively with their audiences.

We invested in Alena at the pre-seed round; this is an example of a co-gendered team building a unique and globally scalable solution. It’s a platform that delivers access to high quality mental health services at a fraction of the market price, therefore democratising access to solutions using technology. Innovation in this area is constrained to telehealth providers, where cost is still the same but with a different distribution channel, and mindfulness apps, that take a one size fits all approach and require a certain kind of extremely self-motivated person to use. Alena is an example of a co-gendered team building a unique and globally scalable solution that is truly accessible to large swaths of the population rather than just the 1%.

Investing in female-led technology companies, to us, means investing in the companies capturing the largest audiences (and driving the largest market share), solving the big problems that need to be solved, and generating outsized returns.

Under the spotlight: Saloni Bhojwani

Saloni Bhojwani is Co-Founder and Partner at Pink Salt Ventures, the UK’s first VC fund dedicated to female-led technology companies. Saloni has been angel investing in female-led businesses since 2019, and was previously an Investor at Founders Factory, the UK’s leading accelerator, and invested in 16 companies across consumer and B2B. Saloni is a former start-up operator, scaling a seed-stage startup from 5 to 50 FTEs, and started her career in strategy consulting. She holds a B.A. in Economics from Tufts University, and an MBA from London Business School.

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