Finance Small Business New funding for female startups

New funding for female startups

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A network of mostly female investors is hoping to boost the number of Australian women in entrepreneurship.

Scale Investors was set up in 2013 and has 59 female and 11 male high-net-worth members.

It provides a deal flow of women-led startups and so-called Scale Angels invest up to $25,000 each.

Chief executive Laura McKenzie said it was important to have a diverse perspective around a boardroom table.

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“There’s been a lot of coverage around getting more women on boards … that problem is more pronounced in the start-up community where 96 per cent of the investment community is male,” she said.

“We feel as a group we have so much to give to that next generation of entrepreneurs.”

Scale Investors is unique in Australia and was inspired by a US-based group Golden Seeds.

Golden Seeds boasts tripling the number of female investors over the past decade. It claims 20 per cent of all start-ups in the US are now run by women.

“We’re trying to recreate that situation here. We think encouraging more women to be investors is absolutely part of that solution,” Ms McKenzie said.

Engineer and Scale Angel, Lauren Melton, said being a member of Scale was empowering.

“We feel as a group we have so much to give to that next generation of entrepreneurs — every one of us brings something different to the table,” she said.

She has invested in Trademark Vision — the world’s first visual search engine aimed at disrupting the trademark industry.

“You take much more of a personal stake in the business than you would with a company you just bought shares in over the internet,” Ms Melton said.

“It’s much more satisfying, much more gratifying.”

Funding hard to find in Australia

In just one year Sandra Mau has grown Trademark Vision to eight staff and 100 trademark attorney users.

“In order to search for trademarks it’s quite difficult, you have to describe a picture in words. This can be very subjective. How do you describe a Nike swish or Adidas flower — you and I might describe it very differently,” she said.

But Ms Mau said seed funding was difficult to get in Australia.

“It definitely would have been very slow-going if we weren’t able to raise the funding we might have had to look overseas for it,” she said.

Scale has invested $3 million in six disruptive start-ups so far, including Dayone Response, which has invented a water treatment bag used in disaster relief, and Switch Automation, which controls building energy usage via the cloud.

But those are the lucky ones. Regardless of gender, Australian start-ups struggle to attract funding and a 2014 World Economic Forum report found the ecosystem here lagged behind other developed nations.

Scale Investors aims to deliver a ten-fold return on investment on exit — a healthy return for helping to level the playing field in the competitive start-up game.

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