Unicorns, Legacy, and The Billion-Dollar Boom: Inside Australia’s Venture Revolution

SCS:

We are here not to placate. We understand the real issues. We've read AFR, Forbes, and all those tough conversations that need to be had around what's happening here today.

And let me just start with maybe Rick. With years of experience under your belt, Blackbird VC is one of the premier funds, one of the largest in Australia that has backed a lot of key unicorns, including Canva, which is one of the most popular globally. Women-led unicorn valued at over $26 billion, at its high, something like $40 billion.

That's right, that's right, with the recent launch. And that's why actually Melanie couldn't be here today. I did meet Cameron actually in Boston a couple of days ago and he had really good things to say about working with her. Set the landscape for us, you know, frame as, give us a framing of where Australia is.

Is it as nascent as many other markets? Where are we in the venture cycle?

Rick Baker:

Yeah, so firstly, thank you for having me. It's wonderful to be here. You know, I just want to repeat one thing that I said in the room next door just a minute ago, and that is around Canva and one of the reasons that making sure at Blackbird that we can and do increase the number of teams with women in them that we back is because of Canva and the fact that a lot of our business success and our firm success is around the very serendipitous meeting that I had with Melanie Perkins about 13 years ago.

That is something that really we know is a huge part that is responsible for the success that is coming from a woman-led company. So what's happening in venture in Australia? The really great news is we have a venture industry because about sort of 12 years ago, 13 years ago we didn't really have an industry. We didn't have an industry that could back the wonderful people we have in the room today and we all know and let's face it and I know we're going to talk about it some more that we do not as an industry yet have fund enough women and it is still hard, harder for women to get capital from our Australian venture capital industry. 

But I do think, and I know that, you know, I speak to a lot of VCs in the room, both men and women, there is a collective spirit to want to make it better and we do all, you all come to this room and particularly things like Beyond the Billion and the pledges we make, that allows us to bring our teams together and articulate what we want to do.

So I want to put out to the room as a start, there is a real desire to do it. We need to do a lot better, I know we're gonna talk about that in the future. The one other thing I just want to say is that we've had two really tough years just behind us in the venture ecosystem across the whole globe but just here in Australia it has been really noticeable. There has been our main funding groups, the super funds and the high net worths have all slowed down and they've slowed down just because they put out so much money in the boom time years and that's made it harder for us as VC managers to raise capital which means it's harder for us to put capital out into the ecosystem.

But the cycle is starting to turn and the optimism that I want to sort of present to the room is that we're at the beginning of a new cycle. These cycles tend to be 10-12 years, but they mean that where we sit today there's probably 10 years of growing optimism ahead of us and that's a really exciting thing.

It'll probably end in a massive boom in maybe 12, 14 years time and we'll all pay far too much for companies and then it'll come crashing down again but the next 10 years actually I think might be really interesting and exciting for us.

SCS:

Thanks Rick and and on the point of family offices slowing down of course we have Carol here with the Trawalla Group and Women Led Ventures. You are our Beyond The Billion Country lead.

Tell us a little bit about, you know, where you see the venture market and perhaps an update since last year, on where we are as Beyond The Billion in Australia. 

Carol Schwartz:

Yeah, well thank you Sarah and thank you Dell for hosting this and thank you for forming such a great partnership. I think that actually, and this might be controversial, the biggest opportunity for female entrepreneurs is actually within family offices. Because there tend to be a lot more women involved in family offices. They tend to have more of a voice around the decision-making table.

And a lot of them tend to come from entrepreneurial backgrounds. So I would suggest that in terms of opportunities for female entrepreneurs, family offices are still pretty good. They also, most often, invest in their own capital, which means that they're not responsible for managing and giving returns to others. And so therefore, they can be more patient, which they tend to be having been entrepreneurs themselves, they tend to be more patient, and they also tend to be very, very involved and willing to be involved. 

So I'm, you know, I guess as an investor, I'm quite happy with the VCs sort of taking a step back now because it means there are more opportunities for me.

SCS:

Yeah. Love that. And where do you think we are? I mean, you were so kind and jumped at the opportunity of bringing Beyond The Billion in Australia and because of obviously, you know, part of it is you had influence within those years.

Carol Schwartz:

I'm a bully and harasser.

SCS:

The right kind of bully and harasser. But what did you see in Beyond The Billion and what was the opportunity for Australia?

Carol Schwartz:

I love Beyond The Billion. When I first heard about it, I couldn't believe it because it was such an audacious idea. Years ago, I was involved with bringing what was called the Panel Pledge to Australia. And the Panel Pledge was all around men agreeing not to speak on panels or sponsor conferences where there were no women, right? 

And this was a variation on that theme, right? Why aren't you as VCs investing in female entrepreneurs? I mean, the fact is though, that if you think about it, by not investing in female entrepreneurs, you're actually missing out on 50% of the population and 50% of the great ideas. So to me, Beyond The Billion, which started off as...

SCS:

The Billion Dollar Fund for Women. 

Carol Schwartz:

Yeah, the billion dollar fund. And within nine months, that became Beyond The Billion. It was so exciting and as Shelly said, and as you said, I was embarrassed when I first met Shelly and she said to me that there were no Australian VCs involved. I mean, that was really embarrassing. So, and I do have to say that the VCs that I did approach, apart from one, which I'm not gonna mention, which I'm still angry about, all took it up and all saw the benefit for themselves.

I mean, particularly in light of the conversations that are happening now about entrepreneurship and diverse entrepreneurship. Yeah, so it was such a pleasure for me to become involved. So thank you for that, Sarah.

SCS:

Thank you. And so we are more than $400 million pledged now, and about a dozen funds and more to go. But of course, we're just getting started, and this is why we're all here today. I'd love to learn more about what else we can do. But turning to that, talking about entrepreneurs, we of course have one of the leading entrepreneurs that has exited her business at over $140 million, you know, something to sneeze about.

Kristy from Modibodi, tell us a little bit about your story and how your evolution as a founder to an investor has been in the last couple of years.

Kristy Chong:

Yeah, so I exited Modibodi two years ago to a Swedish company, as you said, for 140 million. And I did have a good stake in that business,  so good equity in the business still, so I could have retired, but I didn't want to, and I saw an opportunity to give back to the community that had really helped me get to where I got in the end, and that was to invest in other female founders, because seeing the numbers, but in particular seeing the businesses that were being invested in. 

Obviously I was a, I was considered fem tech, but it was really a retail business, tech enabled, and realising that yeah, a lot of these women were starting businesses and they're not getting the funding because most of, as we know, most of the VC community and accelerator programs, it's really about deep tech. And sometimes these businesses which are still tech enabled and may even develop that tech in the future are overlooked.

So I wanted to invest in very much impact driven businesses, female founders who own 50% of their business at the very beginning, so I'm actually getting a lot of solo female founders, which is wonderful. And yeah, that's been sort of where I've ended up. But in terms of my journey, just in terms of how I got there, you know, for the first four years it was bootstrapped. We put about $50,000, took it off our offset account on our mortgage.

At the time, I was living in Seattle and my husband was doing a fellowship. So we were living off $100,000 a year anyway with two children. And then when I went to him with this idea, he was like, yeah, yeah, it sounds good. Okay, go and do it. And so getting that support from my husband in the first place was so important and gave me that confidence to go forward with the idea.

But those next few years, I was also managing my children, you know, full-time care of my children, and for two years I was, you know, growing the company with no income. Yes, he was a doctor, but a very junior doctor, so you know, the income was still living in Sydney, about $200,000, so not a lot of money.

So I had to make, what I learned through that process was I really valued cash, because cash is king. I learnt every dollar needs to work hard for me. I also learnt that I need to negotiate with my suppliers to get the best outcomes possible. And because I wasn't raising capital, guess what, I could focus on growth, which was great. 

On the downside, I just wanted to add that what was hard is I couldn't grow that fast. I didn't have the money to invest in brand and category. I couldn't invest in stock. So we had heaps of demand and the supply - I just didn't have the supply. So that was really hard from a meeting customer demand.

And then lastly, I was it. I was doing everything. I was the product developer. I was the financials, the inventory planning, customer service, and still managing my kids and full-time care for my children. So it was tough. I don't know how I made it through. It was like mere tenacity. 

And when I think about what do women need, I think they need access to capital, but they need to know, they need the advisors around them to ensure they know how to spend the capital wisely because I'm not sure if I'd had the capital, I would have known what to do with it anyway. I'm just being really honest. So yeah, that was a long one. 

SCS:

No, and a round of applause there. Because what Kristy left out was the herniated disc that she had along the way, the stress, two, excuse me, the incredible stress that it puts on, first of all, entrepreneurship, right? 

People think that it's glamorous, but it's not for the faint-hearted, and especially for female founders that are underfunded and over-mentored, frankly. That's not enough going to scale. 

And the question that I have for you, Kristy, when we were chatting, you talked a little bit about your optionality there, right? That you didn't have venture capital early on and part of the deal that you made a great deal in the end, but you wondered if there were better options for you.

Can you talk a little bit about that and what female founders today face even as they're scaling to your level?

Kristy Chong:

Well, I mean, for me, I had a credit card debt of $250,000, so it wasn't just the $50,000 we put in. I was wearing that every couple of months, hoping that we'd get the income in to pay it back, and that was the way it went. And then I actually did take on an angel investor.

I gave up 20% of the business, but I hear some people, oh, don't give up that much now, and I get it, but you know what, it wouldn't have been, I wouldn't have got to where I got today unless I'd given up 20%. So I think I get a little bit annoyed about the sort of rhetoric in the community today that that's a bad thing, because do you want to grow a big business? Because if you do, sometimes along those early stages you have to give up more. 

Maybe I'm wrong in saying that, and maybe that's not the right thing, that's just my own opinion. So then I actually skipped the VC. I was going out and talking to family officers and to VC. I think I, I thought, I then felt pregnant with my fourth child, so it became a bit of a confidence issue for me, like, ah, I'm heading towards $10 million now with five people, ooh, can I keep growing this business? I don't know, what should I do? 

And the VCs I was talking to, yeah, I don't know that they really wanted to invest because I wasn't pure tech either. So even though I had great revenue, I had $2 million in profit, just wasn't seen as that attractive. So yeah, it was a bit of a confidence game which we were speaking about in the meeting beforehand, but I think it was also the VC community just weren't interested in a business like mine, and I would still say still aren't in Australia, despite, you know, in Singapore, retail and social assistance and all these types of businesses, education being funded by VCs in this community, it does come down to angels and family officers. 

And I think that hopefully it's just because it's immature and that that will mature as women like me exit and we start investing and hopefully we get a good track record and then we can create our own fund. 

SCS:

Yeah, thank you. That's right.

And of course, those of you who were here last year know that we had Kate Morris on and she is doing exactly that with her own fund, right? Because she realized, God, if only we had the funding and why don't I become that person that I always needed? And that's really what we're seeing with founders funding forward, a key theme here.

And one of the other themes that is emerging in terms of the opportunity for why we believe, as Shelly and I were saying earlier that this is a transformative time. There is a huge opportunity and inflection point. It is the role of family offices, right? As Carol said, to be patient capital, to not be pressured for the three X returns in 10 years to the LPs and pushing growth at all costs, right?

I mean, coming from the Valley, I think that has been very, very real. We've seen massive burnout in terms of founders just tapping out because they were not able to meet the return profile that was needed. And now I want to turn to on that theme to Alex, who of course has a role model in a strong woman, an iconic woman, who I am wearing today actually, Carla Zampatti. 

So thank you for this beautiful outfit. Please visit Carla Zampatti later on. But Alex, talk to us a little bit about this concept of women, wealth, and legacy, which I think the brand that your mother started and what you're doing now and as the next generation truly represents.

Alex Schuman:

Thank you. Yeah my mother was part of that amazing generation. They really started from absolutely nothing, a post-war migrant and she really coming, arriving in the country in 1950 being as a small child not speaking English, she really achieved something quite amazing. But, you know, it really began, you know, she was divorced and with a newborn baby in 1970, struggling to get any finance from banks or anyone at all.

Eventually, it became a rejected everywhere, but got some $5,000 from a cousin and started, you know, and established the brand. And just 10 years later in 1980 became the first Australian Businesswoman of the Year. So she really went from strength to strength after that. But being a businesswoman was the proudest moment. She won many fashion awards, of course, in her lifetime.

But that first Australian Businesswoman of the Year was by far her proudest achievement. You know, she died three and a half years ago, and my sisters and I really, you know, she had been the designer, the business leader, and probably the best brand ambassador that a company has ever had. 

And to lose all three of those in one go is really a challenge. My sisters, Bianca and Allegra, and I, we re-established the business based around her legacy. So her legacy was really one of hard work, but three missions, you know, empowerment of women, support for the arts and champions of multiculturalism. And so as much as we continue to run and very proudly run the business, the brand that bears her name, we also take very seriously those mission and legacy pieces that continue that message. 

Allegra is in politics and we do a lot around trying to advance the representation of women in politics more generally. So for us, I mean, we're in that transfer of wealth generation. We weren't the female entrepreneurs, of course, but we are, you know, for our own children, we're doing this next level of the project, which is giving them that sense of mission, because I think there's perhaps nothing less worthy than giving your kids a pile of money, give them a pile of headaches and problems and obligations.

That's really what we're about. That's our mission practice.

SCS:

And Alex, just very quickly, I mean, of course you're not in the venture capital space, but what we wanted to also present was a bit of a balanced narrative, right? Because I guess hearing from Kristy, the fact that venture truly isn't for everyone, can you talk to us a little bit about just building a business here, scaling it to the level where it's doing justice to the brand, the icon that was your mother.

Alex Schuman:

Yeah, I feel, you know, these days of businesses, we're upstream in downstream, so we design, we produce it here in Australia, and then we're retail and they're exporting, and so it's a very complicated business these days, and scaling for us is very difficult, because all the parts have to scale at the same time, and that's been our biggest challenge, I guess, is scaling every element of the business. When you're vertically integrated, scaling it at the same pace, it's almost impossible. It's easy to say, hard to do.

SCS:

Yeah, and are you seeing more Australian businesses go global? I mean, what is the shift here, I mean, in terms of the opportunity for Australian entrepreneurship?

Alex Schuman:

Yeah, I think the door is really open to Australian creatives. I would say Australian fashion has really had its moment in the sun in global markets, in offshore markets. So we have incredible creatives in this country and they're incredibly successful overseas. So you go into department stores in the UK or the US and you'll see a dozen Australian brands all on the same floor.

It's quite amazing. And we are, particularly in the creative industries, as much as we're, you know, we're as good as creatives anywhere in the world, but we're just not supported or recognised as such. But I think through that hardship, Australian creatives have done incredibly well exporting overseas. And, you know, we've got companies like Zimmerman and you know and others doing just astoundingly well. Again female founded in 30 years, what they've done is just incredible.

SCS:

So the theme here is definitely putting Australia on the map and female founders in Australia have continued to do that. I know we talked a lot about Canva of course you have many other great companies that Rick I know you want to share about but I don't want to lose the moment of what Kristy talked about earlier, the fact that she felt she was not the right fit, that despite the revenue, despite the traction, the consumer side was not viewed as positively. 

Do you agree in that, you know, venture capital was just not set up, is not set up to support businesses like Kristy? Is this changing in Australia? What are you seeing here?

Rick Baker:

So I would acknowledge that. I think certainly the VCs, I think the first wave of VCs that came into the industry, me included, knew quite a lot about software and knew quite a lot about selling to other businesses, and didn't actually know a lot about selling to consumers. 

And I think the other thing that made it more difficult was that Australia being a smaller market, it's difficult to really get that head start in the consumer space that you can get in much bigger markets, particularly the US, but certain parts of Asia and Europe.

So I think we're slowly getting better in understanding consumers here in Australia, but it's definitely something that VCs are not yet as experienced.

SCS:

Yeah, and of course, we all know here that Blackbird and many others in the venture ecosystem have been criticized for the lack of diversity, a lot of mishaps along the way, mistakes along the way. Can you comment on that, on how Blackbird is re-examining itself and how the venture industry in Australia is changing?

Rick Baker:

So maybe I'll sort of tell it in a bit of a story. Our first bit of negative press, one of our early pieces of negative press was a couple of years ago in the AFR when we first released our gender stats and they definitely weren't good enough and there was some backlash.

I think some journalists in the AFR, Capital Brief, a few others, picked up on it and were probably rightly so, quite critical of us. I think the instant reaction was, what's the right word, a sort of worry, sort of a bit of puzzlement as we tried to work out you know, the fact that we had been genuine about trying to make this better, but a sort of renewed sense that this was really important and so as much as I dislike that early criticism, it actually was something that spurred us on, so I look back on it as a positive thing. 

The hardest moment for us, and I would say the hardest moment of probably my career and particularly at Blackbird was the beginning of this year with the Kiki incident, which I know many of you will know about. I want to say to this room, we did not back a bunch of male founders to start a women's club. We did not know that that was the pivot. We knew that they were focusing on a demographic, but we didn't know it was the pivot. And I think what was very clear from that, was the very strong feeling that the start-up community in Australia has for what was a very clear, sort of, what seemed like a very clear two-standard gender investment thesis there.

And we mucked it up. We were actually in the middle of struggling a bit with the press. It wasn't actually around the diversity topic, but just generally getting criticised. And we had a policy of no comment at that stage. And that backfired on us spectacularly. And I do apologise to people in the room who thought we didn't come out strongly early enough. 

We also, a bunch of the journalists did want us to throw the founder under the bus. And I understand the, you know, what was happening was not perceived as right and was not right. And it took us some time to work and reassess the strategy.

And then that founder did come out with what I think was a fairly strong apology and change of strategy. But it took us some time and I think that the learning for us is that we've got to come out, we've got to play with the, we've got to work with the press, we've got to be more on the front foot, we've got to let you all know how we actually feel about that rather than sort of hiding behind it. 

And I can tell you that, you know, when I read in some of the social media, these lines like Blackbird hates women or Blackbird has a women problem. It was like a stake to the heart for some of us because we had been trying really hard.

I wanted to share that because we haven't shared that, it's been in our blog but I haven't shared it with a group closely and I thought this was a good group to do that with. But also to say that there is a glass half full here.

We're working really hard on it. I know that lots of people within the industry were being transparent with our metrics. Of course, some people said to us, oh, why are you sharing the metrics if you just get criticized all the time? And we've sort of wanted to redouble down on sharing the metrics and making sure we're doing it in line with equity clear.

SCS: 

Yeah, and Rick, you know, one of the steps that you've taken, and together with Kate here, is to be part of the consortium, to engage, right? And that's, you know, part of our policy and our approach at Beyond The Billion in that we need to engage, right? And it's not just a bunch of, you know, women speaking in echo chambers, because nothing is going to change unless we work together.

And so the question to you is now, fine, got the apology, what changes are you making and what systems and processes are you seeing venture capitalists in Australia making to create a different result?

Rick Baker:

So, there's a whole lot of things we're doing and one of the things I guess I'll start by saying is we haven't found the silver bullet and so we think this is a multifaceted thing that we have to do. I think there are two levels that we're focusing on. The first level is the industry-wide level, and we are trying very hard to run a number of programs to encourage women to feel as though they can come to us and seek capital, and that they will be treated well and have a good chance of getting that capital. 

So we run a number of programs like the Giants program, our Foundry program, which is actually one of our bright spots that's actually going into universities and talking to academics and PhDs and helping them understand what startups are all about. And our latest cohort had 55% women in that cohort and so a little bright spot in the narrative of deep tech that is traditionally harder. 

So that's at the sort of top level. But actually what we also need to do at the second level is get our own house in order and that's what we've been working on. We've been working on bringing more senior women into our partnership and investment group. We're almost 50-50 across the whole investment group, but at the senior level we still have a long way to go. 

Kate (Glazebrook) has been, Kate, I should acknowledge here, has been leading a lot of our work in this, has been speaking to many people in the community. I know a number of you here today. And we're trying to really understand what makes the difference. And what we're trying to do is drive that into a training program for our investors. 

We've done ally training. We've done some unconscious bias work, but actually we think there's a next level of training that we can do, and that's after speaking to all of you. We don't quite know how that is gonna come out, but we're gonna have a crack at it within our team, and if we get it right, we'll share it with everyone to see if it can be helpful. We have set ourselves an OKR at the level of investment committee that we want 40% of the teams that make it to investment committee level to have a woman in the founding team. Last financial year, we were at 33%. So we've not yet hit that level.

A little bright spark is that in the last six months, and particularly in the AI space and the AI-enabled SaaS space, we've been really pleased to see a really strong cohort of women-founded companies coming through the pipeline. So that's a bright spot that we're quite excited about.

SCS:

Thank you Rick, amazing. Carol, you are a funder into funds and into female founders themselves and of course as an LP, you know, part of our work at Beyond The Billion is really focusing, you know, we're not an accelerator. 

We are here to work with the investors at the LP and GP level. And for those in the room who are not aware, our limited partners are the funders into the venture capital funds.

So folks like Blackbird are backed by IC, Hesta, aware, you know, some super funds, superannuation funds, family offices that back – that are truly the backbone of the venture economy, right? 

And my question to you, Carol, is what are your observations here on how active, how activist LPs are in ensuring that things change and that things that what Rick is doing is really not being triggered by bad press, but that it is truly just a smart thing to do?

Carol Schwartz:

Well, firstly, I have to say, Rick, I find it so ironic that the newspapers, the journalists, are criticising you for a lack of gender diversity because one of the other things that we do is a report on the media and the lack of diversity and opportunity for women in the media. And not only as female journalists, but also female voices in the media and the lack of representation of women in the media. So very ironic that they criticize you. 

LPs, well, you know, I'll tell you a little bit about my own story. So I've probably been investing in women entrepreneurs for more than 20 years, and that's because I was an entrepreneur myself. So I studied law, and within about 10 minutes of having received my articles, I decided I didn't want to be a lawyer, and I opened an aerobics and dance studio. Which was fantastic, based on the Jane Fonda workout.

SCS:

Oh, love it. We need to see videos of this.

Carol Schwartz:

I'm a child of the 80s, right? It was absolutely fabulous, and really, really fun to do. And I came from a very entrepreneurial family. Like Alex, I knew your mother. What an amazing woman she was. My grandmother actually started our family business. So I grew up with, surrounded by female entrepreneurs who, you know, were always very creative and never took no for an answer.

And so I've been investing probably all my life, either with women or women entrepreneurs, women as partners when I say that, because I also actually joined a partnership with a female friend of mine who was an interior designer. This was when we were having children, and we used to build townhouses.

So the entrepreneurial spirit is very, very strong. I invested in a lot of businesses directly, and probably now, four, five years ago, after I'd already made probably 15, anywhere between 15 and 20 direct investments, which were becoming really, really difficult for me to manage, because I was doing it on my own. I mean, I had some administrative support through our family office, but it was always me being excited and the entrepreneur, me making the decision.

I sort of thought to myself, this is actually ridiculous. Why am I not seeing more women who are running funds and more women who are allocating capital? And I thought to myself, this is something that I should be looking at and something that I should be investing in. And do you know, when I first looked for a fund that was set up by women in Australia, I could not find one.

And this was five years ago. I couldn't find one. That's women alone, right? Yeah, that's women alone, right? Without a male partner. I could not find a woman who had set up a fund on her own. And I was really disappointed with that. I mean, there were women who had set up funds in partnership with men, a couple of them, not a lot. 

And then the first one that I came across was actually ALIAVIA, which was set up by two Australian women, but they're based on the West Coast of the US. So that, and that, I invested in ALIAVIA, which, you know, has been fantastic, and I know that they are a member of Beyond The Billion, which is also great.

They invest only in women entrepreneurs, but I'm a bit agnostic around that, right? I'm very happy to set up, sorry, to invest in a fund set up by women that invest in both men and women, because I know that they're going to have at least 35, 40% of their investments are going to be in women, women entrepreneurs.

And that's the track record that we have. And so consequently, I've, Chenelle, you're going to have to help me out with this. So 54% - for the funds that we've invested in, their investments equate to a 54% mix of women led.

SCS:

So in your portfolio of 50, in the funds that you've invested in that are female fund managers, the byproduct as a portfolio is 54%.

Carol Schwartz:

That's exactly right. Which is a data point that's very important for us. But we've invested in, I think we have three funds in the US. No, three, female funds, yeah. And these are funds, except for one of them, these are funds that have been set up by women who've come out of larger VC funds, where last night I heard something interesting where they're not allowed to take their track record with them, whatever that means. 

SCS: 

Yeah, so I said that. So just for context, we had a private gathering, which is the benefit of being part of Beyond The Billion, a private gathering off the record with a lot of our fund managers and had really heart-to-heart conversations about what needs to change here, capital allocation strategies, so on and so forth, and one of the key issues with emerging fund managers, emerging meaning fund one, fund two, fund three, you're early in your journey. 

Starting in the U.S., and we're seeing this across, but a lot of them who spun out from, say, big-name firms, name brands that you could ring off, I wouldn't name names, but many of them do not allow certain partners or junior staff, although they led the deal, to take the track record with them.

And so although you've been working with a firm for say 10 years, and we have real, this is not anecdotal, this is real data here, they can't take the track record with them, and therefore when you're out raising, the question that LPs have is, what is your track record? And most women and people of color who do not come from the position of privilege, do not have that opportunity, right? To then have that track record, because not everybody can be like Bill Gates and call on dad, you know? Bill Gates Sr. to wire him 250,000, or mom, or Jeff Bezos.

And that's where we see the issue. Even as we talk about female founders, we need to look at the systemic issue that exists. Because what Carol is saying is essentially, what she's experiencing in her portfolio is by investing in women, the byproduct is more women entrepreneurs are funded.

Carol Schwartz:

Yeah, absolutely, absolutely. And I guess as Chenelle says, 54% of the investing companies are in female entrepreneurs. So we have three in the US, we have two in the UK now, we have two in Israel, and we have seven in Australia, which we're really excited about, because it's great to be an entrepreneur, having been an entrepreneur myself, but it's even better being an allocator of capital. 

And this is how we're gonna change the whole ecosystem, right, by helping women allocate capital, right? So, Kristy, you know, for you to go out now and be a capital allocator is absolutely fabulous. And this is going to build the ecosystem in a different way because you're going to have women who are leading the investment decisions and who come from a different experience, both personal and professional, to their male colleagues.

And that's what you want around decision making tables, right, you want people who have diverse experiences sitting around the table and that's what we haven't had. And I guess that my thing around women setting up the funds is how they're gonna differ is that they're not institutionalised in the way that male VCs who've been around for 15 years, who've set up systems that work in a particular way, that they're setting up with a blank piece of paper, right? And it's going to be a different model. And so helping build that ecosystem is really important to me. And I think that's what's going to be the game changer.

SCS: 

Thank you. Kristy, do you have reactions to that? I mean, we've talked a lot about capital allocation, and then I want to open it up to questions here. But what's your reaction there as you hear allocators talk about these strategies? Is this being transmitted to the ground? I mean, we were with a couple of solo female founders yesterday over whiskey, I might add, good whiskey, and the complaint there was that solo female founders have it extremely hard, although solo male founders don't.

And it is clearly a gender issue because this person has 10 times more traction than the male founder, but the valuations are different. Are we seeing the change that these investors are trying to, is it trickling down to investors, to the entrepreneurs that are in your community is my question.

Kristy Chong:

I can only speak to the ones I'm talking with, obviously the smaller pools and probably some of the people in the room see, but I mean, I was speaking to a female founder yesterday, very much a tech offer in the finance space, and she's already got nine clients on board, including one big bank. So she's put the capital into her business, or she's got grants to set it up,

it's about $750,000, and she's got $900,000 in the pipeline. And she's a solo female founder, and she said to me, she's gone out to speak to the VCs in this community, and they said, oh, you've got to be a co-founder, you need a co-founder, you need a CTO, you'd better go get that male CTO, sit beside you, otherwise you won't get funding.

And I was absolutely shocked, I could not believe it. And I said, why? Why did they say you need it? Like, did you dig for information? She said, yes, they said, because I might not be able to cope. Oh. And so you need someone beside you, you know, to help you through those times. And I'm like, you need an advisor, or your partner, and your family and friends, the network, you don't necessarily need a co-founder. 

I don't know where that bias came from in the community. I get that the data shows that more, who have co-founders are successful, but that doesn't mean because you're a solo founder, you won't be successful. It's just that it's not the way things work in the world. So, yeah, that does fascinate me, that there's that, but I also believe we need to, I was great what Carol said, but I think we need to meet female founders where they're at now. 

And I think they're still not getting, there's gender bias for the women who are in tech, but ultimately women are still creating businesses in social assistance, impact, social empowerment, education, health, med tech, retail, and the funding is not meeting them where they're at now, and they can scale to be great business. 

Maybe not a Canva of the world, a billion dollars, actually Modibodi probably could have been, because one of my advisors did say that, I just didn't have the confidence to go through. So let's, and Zimmerman is, so yeah, I shouldn't even say that myself here, but let's actually take the bias off about the companies that women are creating right now while we create the change for the future and getting women into more tech, because I don't think the numbers are going to change. 

I think 30% is awesome, but ultimately women are not creating as many of those businesses. And I think, Carol, yes, it's at 50%, and that's wonderful, but that's because everyone's going to you now. You're seeing the pool of women. And yet, if you're... 

Carol Schwartz:

I'm so lucky. 

Kristy Chong:

You are. You are super lucky. And, you know, hopefully all the results will come through. But ultimately, there's a lot of other VCs out there that don't have those numbers. And I think that's because we're not meeting women where they're at today.

SCS:

Yeah, and Alex, I mean, as someone who is living and breathing a women-founded business, what are your thoughts there, and what is the opportunity for family offices? Are your next-generation friends thinking about this with intentionality?

Alex Schuman:

I would say that Mom was always a big fan of telling women like yourself, Kristy, that you should hang on for the ride, so take it all the way through. And she was always, everyone, whether it was Sasson, Beidle, Zimmerman girls or whoever else that was thinking about exiting or finding other capitals, she was always there to say, don't do it, you just have enough confidence in yourself to hang on and take it the whole way. 

But, you know, particularly she's talking to women who are in the creative sector and fashion and perhaps there were a lot of skills that were lacking in terms of taking it to the next level. Zimmerman being the best example, I think they got to a $1.7 billion valuation but took a ton of advice and expertise from outside to get there. 

In terms of the, I don't probably know that many of the next generation to talk to, probably, you know, like Carol, I think is a much better place to sort of, you'd talk to a lot more of the next generation and placement and what their missions are. Ours is really just trying to hang on to the businesses we own and keep it intact for the next generation. For us, the big challenge is there's not a second generation Australian eponymous fashion brand, and we're the first to try it, I think, and we're hoping just to keep it lasting another generation to our own kids. 

Carol Schwartz:

We'll talk about family businesses and the issues with them later.

Alex Schuman:

Yeah, plenty.

SCS:

So a lot more to talk about there. Questions from the audience, comments. Luli, yes.

Luli Adeyemo:

Thank you, hi. Luli Adeyemo, I'm here representing a tech startup called TenderTrace. Kristy, thank you so much. I really understand how it feels to feel like you don't fit. You know, I'm a black, queer woman, well, also my partially sighted, orphaned, and I sell a technology product to government.

So you can imagine how that feels every single day. But my question is, the role government should play in regards to this community, in regards to the cultural change which is needed, especially in Australia, in regards to women or people, anybody of diversity, considering being an entrepreneur and going through this pathway, this journey?

Kristy Chong:

I'm happy to answer that in relation to gender norms. I think government must play a role around gender norms and education and gender bias. And I mean, when we have children, yes, women need to bear them, carry them, and there's obviously the push to breastfeed. So yes, there's a particular amount of time that we need to care for them, but it's not like I have a nurture button that just switches on once I have a child. 

And I think that men can get so much more out of staying at home with their children, the connections with their children. So that will then allow more women, and mums, guess what, to be in the workforce and start businesses, and yet they're trying to push this. More, you know, they've got this quota about more women in the workforce, more women in business. 

These are gender norm issues that exist in our society that government could invest in, especially in our schools. Corporates, again, encouraging the men to take the leave, and women as well, working at home, and role modeling what that looks like as well. You know, take out the garbage and get your husband to do, or your partner to do, you know, the washing, those sorts of things, from a diversity perspective. 

But I know Noga here in the room is really passionate about this, so worth going and talking to her. But I also think New South Wales, investment in New South Wales is not doing very much for our female founders, which is very sad. And, you know, I've gone and spoken to one of the federal ministers, but she just wasn't interested. They're dealing with domestic violence and bigger issues. 

So entrepreneurship, it's sort of seen as one of those things you just got to make it yourself and go and, you know, they don't think about, I suppose, the benefits to society, the capital and the job creation that it brings. But to be fair, they are dealing with some bigger issues. So that's all I would say.

Carol Schwartz:

So can I just say, in answering that question, Shelly, weren't you the head of a women's entrepreneurship thing for Hillary Clinton? For government? How did that work?

Shelly Porges:

Actually, I headed up a global entrepreneurship program which had a big emphasis on obviously female entrepreneurship which is something I cared about for a long time very deeply. I'm a serial entrepreneur myself after having had a corporate career. 

So how did it work? Well, we were doing it globally and we were promoting through our embassies. We created over 100 public-private partnerships with corporations all over the world. And then we asked them to create turnkey programs for our embassies, because our embassies actually loved entrepreneurship. We always used to like to think it was the best thing about the American brand is entrepreneurship. And that's something we could actually add value to the world.

And at the same time, State Department folks who are very brilliant and capable and talented in so many ways, that isn't something they knew about. So therefore, we try to use our own entrepreneurship community that is a global community. I mean, you look at Dell, it sells all over the world. Here we are in Sydney, Australia, to create these turnkey programs that our embassies could execute with very simple oversight. 

One good example, probably one that perhaps many of you are familiar with, is Global Entrepreneurship Week. When I came into the program and said, okay, we need to grow this program, there were only about five countries or five embassies that were engaging with Global Entrepreneurship Week. By the time I left, we had 150 countries engaging in Entrepreneurship Week.

And these are all things that we didn't create, we leveraged public-private resources to build a program out. So that was that specific program. But there's so many other examples of ways that governments can, you know, we're about to go with Dell, thank you Dell Technologies, we're about to go with them to Paris and London, you know, in Europe and UK, there's a lot of funding for venture capital, I mean, not only for the VCs, but also for founders coming from government. 

Some VCs don't like it, they feel it undermines the system. I mean, there is that argument, but there are many ways that governments can actually, I think, operate in this space.

Carol Schwartz:

Because I'm actually in two minds about that too, what the role of government is in terms of promoting entrepreneurship and female entrepreneurship, specifically, because what you don't want is government trying to be, you know, entrepreneurial itself and back entrepreneurs, right, because they don't have that skill. That's not their skill. Not the Australian government, I mean. At least.

SCS:

Okay. We'll leave that as a cliffhanger because a lot of governments do have these programs, actually.

Jeannie-Marie:

Hi, my name's Jeannie-Marie. I'm the founder of Brenna, which is a communication solution in aged care. So in addition to being a female founder, the bias that I receive is an industry bias. Aged care is not sexy, aged care is not VC backable, the opportunity is not big enough. So Kristy has talked to some of these sorts of issues.

I was wondering if the panel could talk to how you think that females should respond to those sorts of comments given they're just so plain wrong, especially with the generation of baby boomers that are moving into aged care it's going to be one of the biggest industries in the world.

Rick Baker:

Yeah, I think you know you're absolutely right it's a huge huge industry. Again I think we're still learning about those industries and how they can create big businesses. I think a lot of the businesses that are being created in aged care have tended to be more sort of infrastructure based, instead of building out the infrastructure.

And we've yet to see a lot of the great sort of technology pushed through it. So I think it's a, I agree with you, it's an area that has a lot of potentials. Your question, I think, is more pertinent, is how should you react to that?

And I think the key there is, really, it's frustrating, but educating the investors about that industry in the same way as we need to sort of educate our investors about what venture capital is, sometimes we need educating as well. And so I think, I guess my bit of advice would be to spend some time in those early conversations, sort of starting with the industry and perhaps going a little higher level than you perhaps need to do, say, if you are a B2B, generalized SaaS company, where people sort of instantly get it.

And I know that is more difficult and can be frustrating at times, but we're all coming up the learning curve together.

Carol Schwartz:

It's so interesting though, isn't it? I mean, are women more attuned to the opportunities in age care because we're the ones who usually look after the aged care? 

SCS:

It is. Yes. That is the reality. And that's why Melinda Gates actually knew about Pivotal Ventures as well. Her focus is the care economy.

Carol Schwartz:

Yeah, so, but if you think about it, I mean, you're absolutely right with the opportunity in aged care, it's absolutely huge. I mean, that's where our population's going, right? Who's gonna come up with the solutions as to how to provide the best possible care in the most efficient way.

I mean, I can't believe that VCs don't see that as a huge opportunity. Crazy.

SCS:

All right, a lot of questions. I see a lot of reflections. Do we have time for one more question? One more in the back.

She's my boss, you know. I gotta check. 

Emily Zaborski:

Hi, Emily Zaborski here. So I'm a solo female founder from WA actually, so maybe your next Melanie Perkins, we'll see.

I'm also doing the hybrid sort of corporate life as well at the moment. I'm just really curious on some of the stats because we've talked about there being a gap in investment for women. But I'm really interested to know, Rick, from your perspective, actually from anyone, do you think that there is also a gap in the number of women that are putting themselves forward for funding? 

And how many women do you get through the door compared to men, and why? And is there anything that we can do to kind of help our peers, help our network?

I'm here with the Mums & Co group, over 25,000 people in their community, women in their communities, so there doesn't seem to be a shortage of female founders, but what can we do to encourage people to step through your door?

Rick Baker:

So firstly, I'd say that there, I do think there are enough female founder businesses out there for us to lift our percentage considerably without, there needed to be, there already is, is what I'm saying. But I also agree that part of it also, part of this is trying to grow our community, and particularly grow, as you've said, the number of women who feel that they can start a business, there is the right framework to help them, and that they can come to people like us and have a really good shot at getting capital.

So that, you know, some of the things that we're doing there, everything from the Sunrise Conference where we're trying very hard to make sure that the representation on stage and the content throughout that conference is as diverse as we can make it, through to our sort of Giants program which allows anyone to talk to another founder or someone who works in a startup or someone who works in venture capital and kind of learn what it's all about.

Through to our Foundry program that focuses on universities and then our ProtoStars program that's really young people, that's our foundation where we give out grants, micro grants for passion projects. So I think there is a lot to be done to create that confidence and that feeling. One of it is telling stories and one of the dilemmas that we've had and I know Kate has found this speaking to women founders throughout the community is that as we get more transparent with our stats, as they're not living up to where we want them to be, that actually has put off some people from coming to us to see capital.

And that's been something that we've been sort of torn by because it's not what we wanted by putting it out. Doesn't mean we're gonna stop doing it, but it means we need to get much, much better at telling the stories, highlighting the stories of people. And one of the things that's come out from Kate's research recently is that we talk a lot about the Melanie Perkins of the world, the really successful women, but we're not talking enough about those who are at the beginning of their journey and just getting that first funding and starting their business. And actually that's gonna be something that we're gonna focus on communicating more about is that the seed stage women who are doing amazing things. Just some ideas.

SCS:

Yeah, and we're excited to be doing that more with you and Kate and part of why Beyond The Billion exists as well. So a lot more to discuss over lunch, which I hear is scrumptious, prepared by Dell, but before we go home here, take us home with key takeaways, just a short one-liner, words of advice, Kristy Chong, starting with you. To the founders and founders in the room. 

Kristy Chong:

Key takeaway… I'd say, yes, again, I go back to cash is king, but really, only when you know how to spend it. So make sure you've got the right advice around you, find your network. That's, yeah, that's really important.

SCS:

Alex. 

Alex Schuman:

I would say, for me, it's much more about pay it forward. So our job is to, you know, as much as it was difficult in my mother's generation, it's easier for our generation, but for the next generation it has to be much easier still. And I think the opportunities are growing, but obviously we're not there, but I, you know, particularly in board roles and political backings that we give, it's all about we'll give this support to you conditionally, but you have to be a champion for the next generation of women behind you.

SCS:

Pay it forward, like it, Rick.

Rick Baker:

I think it is that, speaking I guess a bit on behalf of the venture industry, that we're all trying, we're all coming to this with the right mindset, but we have a way to go. Come and talk to us, engage with us please, help us get better. We need to do this as a community.

SCS:

Carol, take us home. 

Carol Schwartz:

Invest in women allocating capital.

SCS:

Invest in women, funding women, and women allocating capital with that. Ladies and gentlemen, a round of applause for this extraordinary panel, funding the future. Thank you very much.