“European Women in VC is a community of over 1000 senior female venture capital investors from all over Europe and beyond. Depending on geography, female chequewriters represent only between 5% and 15% of angel and VC investors, while female founders receive only 2% of VC money. We are on a mission to change this status quo.”

I got to speak to the founder of European Women in VC, 🚀Kinga Stanislawska at TechBBQ 2023 in the media lounge. Kinga discussed issues of accountability in venture capital and the lack of diversity in traditional investor spaces.

TechBBQ 2023: launch of the third EWVC Report

Kinga was present at the event to launch the third edition of the annual report on European Women in VC for 2023. The report aims to highlight the positive financial and societal impact of diverse investment teams in the growth and venture space. Kerstin Jorna, Director-General for Internal Market, Industry, Entrepreneurship and SMEs, European Commission, writes in the foreword to the report:

” As this report shows, gender diversity improves financial performance in European Venture Capital firms. Despite this evidence, woman founders still face problems accessing equity finance to start and grow their ventures. “

Q. How can we hold decision-makers accountable?

Kinga: We have been thinking about this for a long time—how to change this entire ecosystem in many ways. And what we think is that you have to start at the top and there has to be a cascading effect.

So what happens today in VC? Largely speaking, when there is a funding gap of any kind or problem, you’ll try to solve it at the bottom. They do accelerator programmes, grants, and incubators, but rarely does anyone hand out money. I think people are intelligent, and if they give them money, they will learn it themselves. This is the typical bottom-up approach.

What is the top-down approach?

The top-down approach is to start with who ultimately sits at the top. In Europe, it’s the taxpayers who command about half of the entire ecosystem. They are the main contributors to national institutions as well as to the institutions of the European Union.

I think we should be moving away from taxpayer-funded systems. We should be getting the private sector involved. There is, however, one good thing about taxpayers: the accountability issue.

When you have taxpayers at the top, they demand certain things that have a cascading effect. I think we have a lot of institutions that are taxpayer-funded that are very conscious of these problems, of these gaps, and of the changes that they need to make. What came out of our report, for example, is that on LP interactions, actually the national fund of funds, the taxpayer-funded side is the best, the closest to parity when it comes to representation in terms of gender.

That’s not the case when you go to the more traditional investor space, which would be pension funds and insurance companies; there’s only about 20% of women making decisions and 80% men. So I do think that a lot of it is pushing right at the very top.

Do startups need to be held accountable for their practices?

Kinga: I don’t like it when everything is expected from startups. I mean, they have five people sitting in the room, three of whom might be co-founders writing lines of code. They do not have the resources to generate detailed reports and hire inclusively.

I think you have to do things in such a way that it makes sense for people. It can’t be cumbersome, it’s got to allow them to run their business. When you’re a startup and you have, I don’t know, five people on your payroll, it’s not that time.

However, many institutions at different levels that are well-equipped are not being held accountable. To report data, to change things, to do something. I mean, it’s just easier once you have a bigger team, if you have more resources, you have more money.

So, logically speaking, we should be starting at the top, with large companies and enterprises getting people to tell us, and be transparent about the policies that we want to know about.

What can internationals in Europe expect from the VC ecosystem in the future?

Kinga believes that the determination levels of entrepreneurs is one characteristic that matters. In that regard, while it might not sound politically correct, she thinks immigrants in general deliver more. They have something to achieve, and so they’re more determined because they start off being less comfortable. Whether that relates to men or women, I think in the end it’s all the same, says Kinga.

“I would argue it’s harder for women, but, you know, many other people would not. Yeah, I do think that there are many biases that women have to jump over before they get there. But, you know, I mean, people judge on different things and so it’s very hard to, again, generalise.”

“What I’ve noticed is that the VC ecosystem is now, or maybe VC investors ecosystem thinks all the time now not just about money.”

She argues that they’re thinking about ESG broadly, or they’re thinking about how to tackle global challenges, or they’re thinking about how to align with sustainable development goals, or they’re thinking about some other kind of KPI, which is non-financial as well as a financial one.

“And what I found is that many of the women are developing companies in those fields, naturally, because a founder tends to develop a company to address a need that he or she sees.”

Kinga observes that women tend to launch businesses that are heavily rooted in social responsibility. Even in the services-based industry, they view those products as a tool for empowering others.

We are observing a lot of interest currently from women expressing aspirations to build businesses which focus on the health of women. However, only 4% of R&D money in MedTech goes towards female clinical trials and that whole space says Kinga.

One message to aspiring entrepreneurs

Kinga: Zero in on solving the problem, and the funding will naturally follow. Embrace determination as your ally and allow yourself the grace to fail—often. There’s wisdom in failing fast: if a path shows no promise, it’s not just okay but advisable to move on. Not every endeavour is meant to succeed, and that realisation can free you to explore new opportunities with both optimism and resilience. The next big breakthrough could be just one pivot away.

You can find out more about European women in VC here:

https://www.europeanwomenvc.org

Read the third edition of the EWVC report here:

https://www.europeanwomenvc.org/resources/euvc-report-2023-launch-at-tech-bbq

You can follow Kinga Stanislawska, VC investor / Forbes 50 Women in Tech Europe, here:

https://www.linkedin.com/in/kinga

𝐈𝐟 𝐲𝐨𝐮 𝐞𝐧𝐣𝐨𝐲𝐞𝐝 𝐭𝐡𝐞 𝐚𝐫𝐭𝐢𝐜𝐥𝐞, 𝐊𝐢𝐧𝐝𝐥𝐲 𝐬𝐡𝐚𝐫𝐞 𝐨𝐫 𝐫𝐞𝐩𝐨𝐬𝐭, 𝐝𝐫𝐨𝐩 𝐚 𝐥𝐢𝐤𝐞, 𝐥𝐞𝐚𝐯𝐞 𝐚 𝐜𝐨𝐦𝐦𝐞𝐧𝐭, 𝐚𝐧𝐝 𝐬𝐮𝐛𝐬𝐜𝐫𝐢𝐛𝐞. 𝐋𝐢𝐤𝐞 𝐰𝐢𝐭𝐡 𝐚𝐧𝐲𝐭𝐡𝐢𝐧𝐠 𝐧𝐞𝐰, 𝐭𝐡𝐞𝐫𝐞 𝐢𝐬 𝐚 𝐥𝐨𝐭 𝐨𝐟 𝐞𝐱𝐜𝐢𝐭𝐞𝐦𝐞𝐧𝐭, 𝐧𝐞𝐫𝐯𝐨𝐮𝐬𝐧𝐞𝐬𝐬, 𝐚𝐧𝐝 𝐟𝐞𝐚𝐫 𝐚𝐛𝐨𝐮𝐭 𝐭𝐡𝐞 𝐝𝐢𝐫𝐞𝐜𝐭𝐢𝐨𝐧 𝐈 𝐚𝐦 𝐡𝐞𝐚𝐝𝐢𝐧𝐠 𝐢𝐧.