Women, Wealth and Investment Signals
The status of women in any society tells us whether a culture is broadly peaceful or warlike, democratic or authoritarian, equitable or inequitable. We can think of this as the system that we, and the women in our lives, our daughters and granddaughters either need to work hard to unravel, live with or, if we’ve made progress, build on.
Systems Are Political
By their nature, systems are political and slow to change. Any attempt at transformation is open to being contested, and subject to disagreements and conflict as each player defends their position. Change sparks and spreads in the messy middle – in the desires, transactions and interactions between the people who make it possible.
As we’re witnessing in US politics, all it takes is a shift in the status quo to mobilise millions of people to get behind something they can believe in. Gen Z is using meme culture to celebrate a “brat summer” in support of Vice President Kamala Harris. Brat, as I discovered, is a term used to describe someone who is unapologetically themselves, and gets things done without tearing others down. It’s a reference to pop star Charli XCX's Brat album cover and her tweet “Kamala is Brat.” And it seems the socials love the green-themed memes.
People in the public eye have also joined Gen Z in countering Republican JD Vance’s “childless cat lady” slur on women who don’t have children, and in particular, Harris.
If we want to understand women's status in society and the system we're living in, we only have to look at the evidence in the countries we live in. What’s the gap in equal pay, what are the Femicide and rape rates and do women have full control over their bodies? And in our innovation and investment ecosystems – what percentage of women-led businesses are funded?
With the latter in mind, there are a few things that have caught my attention over recent weeks.
The Horizontal Wealth Transfer
The first is what UBS has dubbed the "horizontal wealth transfer" where boomers and the silent generation will leave their wealth to their (mostly female) partners. In their Global Wealth Report, the authors say: "Roughly USD 83 trillion are expected to be passed on within the next two decades... ...Just over 10%, about USD 9 trillion, of the great wealth transfer are expected to be passed on horizontally first, most of it in the Americas."
Women live an average of six years longer than men and couples also typically have an age gap between partners. This means that women will have control of this wealth for quite some time before passing it on to family members and charitable, societal and environmental causes.
This is interesting because we often refer to wealth being passed down – not sideways to women. And women manage their wealth differently than men.
The Changing Face of Angel Investors
The second is a Centre for Venture Research report (University of New Hampshire) on angel investing in the US. The authors say: "In 2023, female angel investors comprised 46.7% of the market, an uptick from 39.5% in 2022…” The percentage of women-led companies looking for angel funding in 2024 has risen to 46.3%, up from 37.1% last year.
It's an interesting undercurrent that will play out in the coming years and will likely impact the third thing I’m keeping an eye on, which has been impossibly static for some time...
The VC Funding Chasm
Female founders of VC-backed companies raise only 2% of the venture capital invested annually (WEF), despite evidence that women-led startups consistently outperform their competitors. And we know there is an almost equal representation of genders in the broad funnel leading to VC funding.
This week, Flo Health, the women’s health app, became the first FemTech unicorn after securing $200 million in a Series C funding round with a $1+ billion valuation. The world celebrated this underserved market finally attracting serious investment until it was revealed that Flo Health is a company founded by, and led by men, creating a strident backlash. According to respected voices in the FemTech startup space, there are far better alternative women’s health apps seeking funding – created, designed and led by women, for women.
Interestingly, in 2023 women made up 29% of the STEM workforce across 146 nations, according to the WEF’s Global Gender Gap report. A big gap between genders in STEM and a chasm in terms of VC investment.
On a side note, the EU, where gender parity is relatively better than in many other parts of the world, is lagging behind the US and China in creating and scaling innovation startups. Quite considerably. Annual VC investments in the EU averaged 0.2% of GDP compared to 0.7% in the US over the last ten years (IMF) due to their underdeveloped VC ecosystem.
Exploring these and other signals leaves us with a few open questions:
- What impact will $9 trillion (mostly held by women) have on altering the funding and investment ecosystem over the next decade?
- How might the rise of women-led businesses alter the philosophical nature of business and society?
- If business truly reflected the diversity in our societies, what progress might be made in finding solutions to the most significant global issues we need to work together to solve?
And the Big Q: How might these shifts impact your career, business and life?
Feel free to get in touch if you’d like to explore *systems thinking for your team or organisation.
*Cultivating systems thinking for yourself is one of the Five Lenses I expand on in my book ‘Relevant’. It’s an important foundation for developing your future-focused leadership capabilities, empowering you to navigate challenges and harness emergent opportunities in our business ecosystems.
Useful Links
More Depth...
If you’re reading, Relevant: Future-Focused Leadership, you’ll find more depth on the topics I’ve mentioned:
- Systems Thinking: Part IV, Chapter 18: Systems Thinking
- Equity: Part II, Chapter 10: People, Culture and Connection (in a section titled Becoming Equitable)
- Change and Transformation: Part II, Chapter 14: Change + Transition = Transformation