Women fight for funding in man’s world of tech startups

Women fight for funding in man’s world of tech startups
Black entrepreneur Fonta Gilliam worked overseas with financial institutions for the US State Department before creating social banking startup Invest Sou Sou. (AFP)
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Updated 28 February 2021

Women fight for funding in man’s world of tech startups

Women fight for funding in man’s world of tech startups
  • Women-led startups tend to be on the outside of the “pipeline” that unofficially funnels entrepreneurs to venture capitalists

SAN FRANCISCO: Lauren Foundos has excelled at just about everything she has put her mind to, from college sports and Wall Street trading to her Forte startup that takes workouts online.
Being a woman in the overwhelmingly male world of venture capital was still a barrier — but, like many other female entrepreneurs, she only worked harder to succeed.
“In some cases, before I even spoke, they were asking me if I would step down as chief executive,” Foundos said of encounters with venture capitalists.
“This was a whole new level.”
Men would speak past her in meetings, discussing whether she could emotionally handle the job as if she wasn’t there, or wondering out loud who would take care of the books.
“When that happens, I tell them I am right here,” Foundos said. “I am the finance guy; I worked at big banks for more than 10 years. I’ve been the best at everything I have ever gone into.”
Startups can only get by so long relying on friends, family or savings before eventually needing to find investors willing to put money into young companies in exchange for a stake in the business.
Money invested in startups in their earliest days, perhaps when they are no more than ideas or prototypes, is called “seed” funding.
When it comes to getting backing for a startup it is about trust, and that seems to be lacking when it comes to women entrepreneurs, according to Foundos and others interviewed by AFP.
“I don’t think women need to be given things,” Foundos said of venture capital backing. “But I think they are not seeing the same amount of deals.”
Forte has grown quickly as the pandemic has gyms and fitness centers scrambling to provide online sessions for members.
Foundos brought on a “right-hand man,” a male partner with a British accent, to provide a more traditional face to potential investors and increase the odds of getting funding.
She has taken to asking venture capitalists she meets if they have invested in women-led companies before, and the answer has always been “no.”
A paltry few percent of venture capital money goes to female-led startups in the United States, according to Allyson Kapin, General Partner at the W Fund and founder of Women Who Tech (WWT).
Being sexually propositioned in return for funding, or even an introduction to venture capitalists, is common for women founders of startups, according to a recent WWT survey.
Some 44 percent of female founders surveyed told of harassment such as sexual slurs or unwanted physical contact while seeking funding.
And while last year set a record for venture capital funding, backing for women-led startups plunged despite data that such companies actually deliver better return-on-investment, according to Kapin.
“This isn’t about altruism or charity, this is about making a (load) of money,” Kapin said of backing women-led startups.
Prospects for funding get even more dismal for women of color.
Black entrepreneur Fonta Gilliam worked overseas with financial institutions for the US State Department before creating social banking startup Invest Sou Sou.
Gilliam took the idea of village savings circles she had seen thrive in places such as Africa and built it into a free mobile app, adding artificial intelligence and partnering with financial institutions.
She created a Sou Sou prototype and started bringing in revenue to show it could make money, but still found it tougher to get funding than male peers.
“We always have to over-perform and overcompensate,” Gilliam said. “Where startups run by men would get believed, we’d have to prove it 10 times over.”
Gilliam got insultingly low valuations for her startup, some so predatory that she walked away.
“We are still lean and mean bootstrapping, but I think it is going to pay off in the end,” Gilliam said.
“One thing about women-owned, black-owned startups: because there is such a high bar to get support our businesses tend to be scrappier, stronger and more resilient.”
Women-led startups tend to be on the outside of the “pipeline” that unofficially funnels entrepreneurs to venture capitalists, according to Kapin and others.
In Silicon Valley, that channel is open to male, white tech entrepreneurs from select universities such as Stanford.
“The pipeline becomes filled with people from the same universities; from similar backgrounds,” Kapin said.
“It is not representative of the world, which is problematic because you are trying to solve the world’s problems through the lens of very few people — mostly white men.”
Investors competing for gems in the frothy tech startup scrum are missing out on a wealth of returns, and stability, to be had by investing in neglected women founders, according to Caroline Lewis, a managing partner in Rogue Women’s Fund, which does just that.
“At the end of the day, it is the right thing to do and it is a good thing to do,” Lewis said.


Saudi MoF closes April domestic sukuk issuance worth $3.1bn

Saudi MoF closes April domestic sukuk issuance worth $3.1bn
Updated 38 min 34 sec ago

Saudi MoF closes April domestic sukuk issuance worth $3.1bn

Saudi MoF closes April domestic sukuk issuance worth $3.1bn
  • Gulf states tap bond markets to help fund budgets
  • Latest sukuk sale divided into two tranches

RIYADH: The Saudi Ministry of Finance’s National Debt Management Center (NDMC) has closed the April 2021 issuance under the government’s riyal-denominated sukuk program.
The issuance size was set at SR11.713 billion ($3.1 billion), NDMC said in a filing on Wednesday.
The sukuk issuances were divided into two tranches — the first at SR3.889 billion ($1 billion), matures in 2028 and the second at SR7.824 billion ($2 billion), matures in 2031.
Gulf states are tapping bond markets to raise fresh funds as traditional revenue sources such as crude oil sales come under pressure as a result of the coronavirus pandemic.


Saudi Tadawul Group said to narrow banks for IPO process

Saudi Tadawul Group said to narrow banks for IPO process
Updated 21 April 2021

Saudi Tadawul Group said to narrow banks for IPO process

Saudi Tadawul Group said to narrow banks for IPO process
  • Received proposals from 10 firms
  • The group will have four subsidiaries

DUBAI: Saudi Tadawul Group has short-listed three local and three foreign banks for potential advisory roles in the financial market company’s upcoming initial public offering (IPO), three sources said.
Citigroup, JPMorgan and Morgan Stanley were chosen, along with the securities unit of Saudi National Bank, Saudi Fransi Capital and HSBC Saudi Arabia, the sources said.
Tadawul, the kingdom’s bourse operator, is expected to chose one local bank and potentially one or two international banks for its listing, they said. A final round of pitching for roles is taking place this week, they added.
Tadawul did not immediately respond to a request for comment when contacted by Reuters on Wednesday. Citigroup, JPMorgan, Morgan Stanley and HSBC declined to comment. The units of Saudi National Bank and Saudi Fransi Capital were not immediately available for comment.
Tadawul said earlier this month it had received proposals from 10 local and international firms for the advisory roles.
Saudi Arabia’s stock exchange has converted itself into a holding company and will be renamed Saudi Tadawul Group ahead of the listing this year, Group Chief Executive Khalid Al-Hussan said previously.
The group will have four subsidiaries — its bourse Saudi Exchange, securities clearing and depository businesses and technology services.


Abu Dhabi said to weigh sale of $4bn Taqa stake

Abu Dhabi said to weigh sale of $4bn Taqa stake
Updated 21 April 2021

Abu Dhabi said to weigh sale of $4bn Taqa stake

Abu Dhabi said to weigh sale of $4bn Taqa stake
  • Size of potential stake could change
  • Abu Dhabi seeking to attract FDI

RIYADH: Abu Dhabi is working with an adviser as it considers selling about 10 percent of Abu Dhabi National Energy Co. (TAQA), Bloomberg reported citing people familiar with the matter.
The stake in the company could be worth more than $4 billion based on its current market price.
Initial non-binding bids are expected to be submitted in May, according to the people.
The size of the Taqa stake being sold could change depending on investor interest, Bloomberg reported. Deliberations are ongoing, and there’s no certainty they will lead to a transaction, it said.
Last year, Abu Dhabi orchestrated a plan for Taqa to receive assets from state-owned holding company Abu Dhabi Power Corp., known as ADPower, in return for stock.
Abu Dhabi has been seeking to attract foreign capital by selling stakes in some of its largest companies.


Emirates may need to raise cash if air travel does not pick up

Emirates may need to raise cash if air travel does not pick up
Updated 21 April 2021

Emirates may need to raise cash if air travel does not pick up

Emirates may need to raise cash if air travel does not pick up
  • Emirates has resumed flights with all of its 151 Boeing 777 jets
  • Emirates lost 12.6 billion dirhams in the first half of the year

DUBAI: Emirates may need to raise more cash this year, possibly through another equity injection from the Dubai government, if demand for air travel does not pick up soon, its president said on Wednesday.
The state carrier had hoped the global vaccine rollout would renew confidence in air travel but demand remains at very low levels, leaving many airlines to ground planes or fly them near-empty.
“We are good for another six, seven or eight months in terms of cash. We have sufficient cash coming in to be able to keep the day-to-day operation at a neutral basis,” Tim Clark told the online World Aviation Festival.
“But like everybody else, if in six months global demand is where it is today then we are all going to face difficulties. Not just Emirates“
Emirates, which lost 12.6 billion dirhams ($3.4 billion) in the first half of the year, got $2 billion in equity in 2020 from the Dubai government, its sole shareholder.
The airline would make a recommendation to the government on raising cash, Clark said without saying exactly when that would be done.
The recommendation could be for equity injection, or for the airline to raise debt or to take other measures, he said without specifying.
“The balance sheet is pretty strong regardless of what has happened.”
The cash situation, however, could be turned around by September-October as long as demand picks up, Clark said, adding that he hoped the airline would not have to seek cash.
Emirates has resumed flights with all of its 151 Boeing 777 jets which are mainly carrying cargo, with about 20,000 to 30,000 passengers a day.
Clark said the airline could retain some of its older 777 passenger jets that are due to retire and instead convert them into cargo-only planes as freight demand remains high.
He said that he expected there would be demand for business class travel post-pandemic even if corporate travel does diminish through executives opting to hold meetings online instead of traveling.
Demand would likely be supported by cheaper fares to fill business class seats if corporate travel does not rebound, he said.
Clark, who was due to retire last year, said he wanted to set the airline on its future course before he retires, but added he no longer knew when that would be.


Football 1 Super League 0: Gulf fans rejoice as shares fall

Football 1 Super League 0: Gulf fans rejoice as shares fall
Updated 21 April 2021

Football 1 Super League 0: Gulf fans rejoice as shares fall

Football 1 Super League 0: Gulf fans rejoice as shares fall
  • Shares in publicly traded Manchester United and Juventus fell on the news as the prospect of a multi-billion dollar pay day for the breakaway clubs was drowned out

DUBAI: Shares in European football clubs fell after plans for a European super league lay in tatters following a global fan backlash.
In what must rank among the most extraordinary 48 hours in the history of the modern game, 12 of the continent’s most powerful clubs attempted to create a brand new elite league before its would-be founding members began to break ranks one by one.
By early Wednesday all six Premier League teams linked to the project had withdrawn.
Gulf-based football fans rejoiced at the news on supporter club social media.
“We stand firmly behind all supporters groups calling for the ESL to be scrapped,” tweeted the Dubai Reds, the official Liverpool supporters club in the emirate.


Shares in publicly traded Manchester United and Juventus fell on the news as the prospect of a multi-billion dollar pay day for the breakaway clubs was drowned out by a global outcry that appeared to unite fans, pundits and even some of the managers of the clubs involved.
US investment bank JP Morgan had planned to finance the new league, providing a €3.5 billion ($4.2 billion) grant for the founding clubs to help recover from the impact of the COVID-19 pandemic which has drained revenue from clubs worldwide, Reuters reported.
The collapse of the project has exposed the sometimes bitter rifts between the fans and owners of some of Europe’s biggest clubs. It also leaves a potential legal mess behind as withdrawing clubs risk being sued, the Telegraph reported on Tuesday.
Juventus chairman Andrea Agnelli said that the league could no longer go ahead after six English clubs withdrew.

The founding members of the league were English clubs Arsenal, Chelsea, Liverpool, Manchester City, Manchester United and Tottenham Hotspur, Italy’s Juventus, Inter and AC Milan, and Spain’s Real Madrid, Barcelona and Atletico.