Only 1% of venture capital capital invested in Austin goes to female founders.
Carla McDonald said that's possible even though Austin ranks sixth in the country in terms of number of deals and investment value.
“There's something very broken here,” said McDonald, who chairs Austin Mayor Kirk Watson's Women's Entrepreneurship Task Force.
According to McDonald's, only 21% of Small Business Administration loans go to female founders.
MacDonald said the main focus of the Austin Women Entrepreneurship Task Force is to obtain more funding for female founders. She joined other Capital Factory task force members on Sunday for a panel discussion focused on the mission to make Austin a leader in women's entrepreneurship.
Jennifer Cuello, partner at Eisner Amper, moderated the panel, which also included Sarah Brand, founding general partner at True Wealth Ventures. McDonald, founder of Dynabrand Ventures. Mary Price, executive director of the Texas Venture Lab at the University of Texas McCombs School of Business; Babson College Professor Patricia Green;
Panel members say Austin strives to be the best place in the world for women to start and grow companies.
MacDonald said the main objective of the Austin Women's Task Force is to identify pillars of the community that support women entrepreneurs, such as educational institutions, businesses, and nonprofit organizations, and to make Austin the world's best place to start and build businesses. He said that the goal was to make the city a city with a strong
“Austin has real opportunity because it has entrepreneurship in its DNA,” she says.
The Austin Women's Task Force is comprised of 21 women, including McDonald, and reflects the ethnic and racial diversity of the community. She said it is made up of leaders in the field and pragmatic thinkers. Recommendations to the Mayor must be actionable and actionable.
“Finally, we wanted someone with a long history of championing women entrepreneurs,” McDonald said.
Price, an entrepreneur who has lived in Austin for 35 years, said local organizations have done a great job building a base of female founders. She is also the co-founder of her Capital Factory.
Another pioneer is Mr. Brand, who co-founded True Wealth Ventures with Kelly Rapp in 2016. Two years later, they closed their first $20 million fund, which Brand said was the largest fund ever raised focused on gender diversity. Currently, one-third of his investments at True Wealth Ventures are in Texas, with more than $60 million in assets under management.
Ms. Green also focuses on entrepreneurship and published one of the first reports on women in venture capital in 2004 with the Kauffman Foundation. She is also a professor of entrepreneurship at Babson College, where she became the founding national academic director of 10,000 Small Businesses at Goldman Sachs. She also served as her academic director for 10,000 Women Global, which supports women in developing countries. She served as the Director of Women's Affairs at the U.S. Department of Labor, where she worked to build a platform for women entrepreneurs. Now she's back in Austin, investing in and advising startups.
Green said many small businesses led by women are working on new products and services but don't know where to turn for help with innovation, prototyping, intellectual property and other related matters.
The Women's Task Force is concerned with promoting diversity, inclusion, equity, and economic development. McDonald said supporting women entrepreneurs in Austin would contribute between $6 billion and $12 billion to the local gross domestic product.
Mr Price also said it was important to have the right financing structure available for the business. Venture capital is great for the right company at the right time and with the right purpose.
McDonald said the Austin Women's Task Force plans to submit a report to Mayor Watson by March 25. She said the report includes 12 practical and actionable recommendations to address the needs of women founders. These needs include access to capital, access to a broader network, and access to affordable goods and services to help build a business, she said.
“Success seems to bring about change,” McDonald said. “This is a call to action for the entire community. Success will look like everyone leaning in and recognizing that this is a problem that we all need to solve. Is this the right thing to do? is.”
The brand also believes that women should be investors. She says getting more female general partners is the quickest way to change the situation where 2 percent of VC money invested each year goes to female founders.
“If you have a woman in your company, you're twice as likely to invest in a female founder,” Brand said. “The way to get more female GPs is to get more female LPs. In our Fund 1, we found that 80% of the LPs were Texas women.”
Brand said that by 2050, women will control two-thirds of investable assets. She said it was essential to fund women entrepreneurs and the way to do that was by getting more women to invest in funds.
McDonald sees a silver lining in angel investors funding female founders. She said angel investors invested $23 billion in 2023, so it is an important part of the ecosystem.
If investors looked at the data, panelists said, they would invest in female founders all day long. Statistics show that women-led startups use less capital, exit faster, and deliver higher returns to investors.
Nevertheless, some conservative groups are targeting funds that give capital to Black women founders. In particular, the American Equal Rights Alliance filed a lawsuit against Fearless Fund, an early-stage venture capital firm that funds only Black women founders, accusing it of racial discrimination in the fund's grant program. I woke you up.
In November 2023, America First Legal announced a program with Progressive Insurance Company that would provide grants to Black-owned commercial vehicle companies, including Houston-based Hello, which helps small businesses obtain financing and services. He sued Alice.
Asked about the backlash, McDonald said: “This is a wrong that needs to be righted.”
“It's motivating and it's frustrating,” Brand said.
“It also makes the work we do even more important,” McDonald said. The solution is not a one-time thing. Rather, they are woven into the fabric of this city, so you can't attack this city the way you do with these funds.
“If we do this right, everyone wins,” she said.
During a Q&A, Barbara Jones Brown, founder and CEO of Atlanta-based Free Returns, said she has raised $5 million for her startup, 80% of which is From women, 70% said they came from black women.
