Talking gender diverse teams in the Nordics with Sara Rywe and Lise Fulland

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Sara Rywe (left) and Lise Fulland (right).

Published by Oslo Business Region, 08 March 2024

In recent years we have seen a generally positive trend in investment development in the Nordics, however, funding for female-founded startups and gender-diverse founding teams has remained stagnant. When looking at Nordic startups led solely by female founders, they make up less than 3% of total investments.

To get some investor perspectives on the topic, Tonje Ørnholt, Head of Investment at Oslo Business Region, spoke with both Sara Rywe, Partner at byFounders and Lise Fulland, Investment Partner at StartupLab.

What is your opinion on why the number of gender diverse teams remains so low?

Lise: Traditionally technical education has been more male dominated, and in venture investing, technology is often the key driver. If you couple a higher density of males with tech experience with the fact that it is easier to recruit people you more easily can relate to, that can be one of the reasons for the male dominance in tech founder teams.

[Also] historically, (white) men have been the ones with access to the most capital, and the same argument applies here, it is easier for them to invest in people they identify (more) with, and thus male teams have received more funding.

Sara: In the end, data (tech) is the most constant crucial skillset that all VCs are looking for in a founding team. We see a higher share of female founders starting companies in industries that are still considered less relevant for regular venture funds such as consumer goods and life sciences.

I would say that the share of investments in Nordic female-founded companies is not too far off compared to the share of female founded investment opportunities, hence suggesting that the biggest issue today isn't related to investor bias (even though that absolutely still exists!) but rather the share of women starting venture type businesses.

So, what can we do to get a better gender balance in startup teams?

Sara: First of all we need to differentiate between "all female" founding teams and "gender diverse" founding teams. This is important because I think diversity should be the end goal here and hence we should optimise for the latter, not the former. But even when including gender diverse founding teams to the statistics, it's still lower than we would like to see.

Lise: It is important to acknowledge that diversity is important for any modern company aiming to build products and services targeting a global market. And this is not only diversity of gender, but diversity of thought, experience, background, references and preferences. [And] both recruiting and investing outside of your inner circles demands more from us as investors, so having a conscious relationship to your unconscious biases is really important. Make sure your processes for recruiting and investing as far as possible corrects for your unconscious biases.

Sara: The equity gap is currently leading to significant opportunity costs for women and it holds the key to unlocking true financial upside for women in tech. And this goes way beyond founders! For example, we need to see more female angels on cap tables and more of the ESOP (Employee Stock Ownership Programs) being allocated to female employees.

Are there any measures that your organisations have put in place to specifically work on closing this gap?

Sara: At byFounders we don't set any quotas for gender diversity, however, we thoroughly track and report on diversity across all levels of our portfolio companies (board, management team, and full employee base). We want to see a 15% improvement per fund in regards to female-founded companies and money invested in them (unless the market catches up with us which would make us course correct). Our target for fund II in regards to the share of female-founded investments and allocated capital is currently 23%.

Lise: At Startuplab, we have an increased focus on cap. table diversity. We also strive to increase diversity in our own limited partner pool to help increase the number of female investors whom we believe is important to improve diversity of capital allocation in the future. Last, but not least, we have to ensure diversity in our own team where the investment decisions are made.

Sara: As a final point, I just want to reiterate what Lise pointed out, we have to look at diversity beyond gender as well including racial or ethnic identity, age, sexuality, physical disability, neurodiversity, educational level, and socioeconomic background.

If you want to read more on the topic, this report features 33 female founders who successfully fundraised in the Nordics in 2023 including Marit Rødevand from Strise. Let us work for that 2024 will bring many more investments into diverse founding teams and female founders.

You can also check out this Oslo Dealroom list for an overview of all the Oslo-based startups with a female founder.