Dave Richards is co-founder and managing partner of Unitus Seed Fund (USF), a Bangalore-based social investor in social enterprises that target bottom of the pyramid (BoP) communities. It is an open secret that part of USF’s investment philosophy is to actively seek out women entrepreneurs. Richards has spelled out why USF leans towards women entrepreneurs in a blog post titled ‘Why we want to invest in more women entrepreneurs’ that makes sense from both an economic and social benefit point of view.
As part of SocialStory’s month-long series on women social entrepreneurs I did an email interview with Richards who spoke about why USF invests in women entrepreneurs, challenges faced by them, the importance of cultivating women as entrepreneurs in India, importance of finding a co-founder and thought partner and the role women social entrepreneurs can play in solving India’s development issues.
Here are the edited excerpts.
SocialStory (SS): Why does USF bet in women entrepreneurs?
Dave Richards (DR): There are multiple reasons, but bottom line is that we’re seeing some great women entrepreneurs who have skill sets we think are primed for success.
A few of the reasons: (a) often women are the primary household purchase decision-makers for products/services (e.g. healthcare or education services) offered by our portfolio companies and women business leaders often understand their perspective better than men; (b) many of portfolio companies are developing disruptive business models which require them to build trusted relationships with multiple constituents. Often women are more intuitive and relationship oriented than men which enhances their ability to create and maintain these relationships; (c) women entrepreneurs are often overlooked by other investors … possibly because most investors are men who are more inclined to connect with other men.
SS: How many investments have you made that have women as founders or co-founders? How have these investments panned out?
DR: This is early stage for us – we just started investing last year. We do look for women founder/co-founders but also key managers. iStar’s CEO and co-founder is a woman and they’re making great progress since we invested in them back in April. Hippocampus has a woman in a key role and they’ve ramped up their rural learning centres significantly since we invested last year. We are in due diligence on a number of companies with women in key positions.
DR: I haven’t seen the data. Since small number of women co-founders in India to date, I’d be surprised if statistically relevant data to back that up. That said, the same gender bias that affects seed/angel investing probably is present in follow-on investing. Although; we aren’t worried about this.
SS: Do you see women entrepreneurs face a different set of challenges compared to men?
DR: Yes. Often women don’t have the same “old boys”-type business networks that men have. Since historically so much of business (and investing) is done in India based whom you know, this can be a disadvantage. I believe that as investing professionalizes in India and people look more objectively at investment decisions that women will get a fairer consideration based on merits. You are already starting to see this happening more versus even 5 years ago. For example, look at the number of female CEOs, co-founders and senior managers in microfinance: Swadhaar, Ujjivan, Spandana, Samhita, Bandhan, etc.
SS: What kind of support does USF provide to women entrepreneurs besides the capital?
We don’t necessarily provide women-specific value-add. We provide the same services including strategic advice, networking, governance development, and fundraising support. In some cases, some of these services might be more helpful to women – example: networking if she doesn’t have the right connections. We also have a number of women on our team, which can be helpful – http://usf.vc/about/team. Also, we have a number of women venture advisors (http://usf.vc/va) who may have add some additional perspectives.
SS: Do you find that the Indian social entrepreneurship industry treat women entrepreneurs differently compared to the developed world?
SS: Does India have enough of a supporting environment for women entrepreneurs to thrive?
Better to ask a women entrepreneur
SS: What role can women social entrepreneurs play in solving India biggest development challenges?
DR: Start and build scaled companies rather than nonprofits. There are too many nonprofits in India that have only “micro scale”. Also, constant fundraising and having to serve donors’ interests rather than that of the customers is a big issue.
SS: What would you tell wannabe women entrepreneurs who are sitting on fence confused about whether they should start-up?
DR: You really have to want to do it. You’re going to have to be persistent and creative to overcome the obstacles that you will encounter. Find a great co-founder to help you carry the load and be a thought partner.
Follow Nelson Vinod Moses on Twitter @nelsonvinod