More investment firms are considering how their investment decisions can better support economic and social well-being through gender lens investing (GLI). Firms investing with a gender lens raised $4.8 billion in capital in 2019, according to Wharton Social Impact Initiative’s Project Sage 3.0, more than double the amount raised in 2018. And this growth in GLI follows countless studies showing its manifold benefits, from higher profits and better returns on equity to more innovation. But GLI’s growth isn’t limited to impact investing. Mainstream venture capital has entered the conversation, with initiatives like the global community Women in VC and 500 Startups launching 500 Female Forces, which seeks to increase outreach, resources, and representation for female founders. Along with many new GLI funds, this surge presents a huge opportunity for incumbent players to consider how they can incorporate GLI approaches into their investing processes.
When we began exploring how to apply a gender lens to Accion Venture Lab’s impact investing strategy, early last year, we quickly realized that there are many ways to do it. Some available resources discuss high-level considerations and others outline tactical ways to incorporate GLI. But if you are anything like us, you scoured the same resources and still struggled to know where to start.
To arrive at an effective and forward-looking GLI strategy, we needed to distill the most important lessons learned across eight years of investing, looking at thousands of companies, building a global team, and managing a portfolio of 50 companies around the world. Where had we excelled and where had we faltered? What was working, and what wasn’t? We couldn’t define a solution without fully understanding the problem, especially when the solution could take an infinite number of forms.
That’s why, before deciding on a strategy, we recommend that investors should begin with a deep understanding of the gender diversity of their current team and portfolio. This helps identify the strengths, weaknesses, and blind spots in how you operate, and creates a baseline of metrics to track moving forward. By looking at the data and discussing potential strategies at each of the four levels described below, rather than in aggregate, you can define a more nuanced and comprehensive approach.
Read the full article about gender lens investing by Shannon Dwyer & Tahira Dosani at Stanford Social Innovation Review.
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