Women in Leadership Yield Higher Returns and Stability

Investments are not just about capital – it's about competence, perspectives, and the ability to make sustainable long-term decisions. Women who invest are crucial for both making better investments and creating a more equal startup scene. If we want to make better investments, we must improve gender equality, write prominent investors and actors in the Swedish capital market. 

 

According to a report from European Women in Venture Capital, European venture capital funds perform better when women are represented in management. Leadership teams primarily consisting of women show 9.3 percentage points higher returns compared to funds only led by men. Furthermore, the volatility in portfolio returns decreases as the proportion of women in leadership increases. In other words, gender equality not only creates economic advantages but also investment stability. 

 

Despite this, female investors represent a disappearing minority in the capital market. In Europe, women make up only 16% of general partners (GP) in venture capital funds. Even worse, female founders receive a vanishingly small share of the capital. The State of European Angels report, released by Nordic Angels and BCG last autumn, shows that only about 8% of startups in Europe have female founders, compared to 77% with male founders only, and that venture capital investments in companies founded by women have remained virtually stagnant over the past decade. Only 2% of all later-stage venture capital goes to companies founded by women, an increase of just one percentage point in almost ten years. 

 

But why are women as investors crucial? The answer lies in the unique value that gender equality brings. Female investors not only tend to prioritize long-term sustainable investments but are also more likely to support female founders. According to Harvard Business Review, venture capital firms with a female partner are more than twice as likely to invest in companies with women in the leadership team (34% compared to 13%) and three times as likely to invest in CEOs who are women (58% compared to 15%). The companies receiving the investments are, in turn, more sustainable and profitable. Studies show that startups led by women have a higher chance of surviving longer than five years, and startups founded by women generate more revenue per invested dollar. 

 

Women who invest create a positive chain reaction where more women gain access to capital, which in turn broadens the innovation base and increases returns in the long run. Achieving gender equality in the financial sector requires several measures.

1. Take active responsibility. Companies in the market must take active responsibility for enabling women's access to leadership positions. This can happen through structured inclusion efforts, such as better attracting and inspiring women. A good example of inspiration is Gina Dirawi's interview series created by Nordic Angels, recently launched to encourage more to dare to pursue their entrepreneurial dreams.

2. Measure and follow up. Additionally, companies need to introduce clear and measurable gender equality goals for boards and leadership teams, where progress is regularly monitored and reported. Furthermore, investors need to actively scrutinize their decision-making processes to ensure they do not unconsciously exclude women, for example by evaluating the gender neutrality of their recruitment and investment strategies. 

 

3. Be a gateway. Then there are all of us – individuals who every day have the opportunity to create small but significant changes. We want to affirm that, in addition to structural reforms, individual responsibility is also crucial to drive the change that is needed. A major obstacle is that women often lack access to networks traditionally dominated by men in the financial sector. This excludes them from important relationships and opportunities to attract capital.

Being a gateway is not just about offering contacts but also actively inviting women into relevant contexts, introducing female entrepreneurs to investors, or recommending women for leadership positions. Gender equality is not a women's issue – it's a question about Sweden's future, and it concerns all of us. 

 

All of us supporting this article are actively working to drive change through research, building new networks, advocacy, and investments. We welcome you to contact us if you want to improve.

In a time where Europe faces great challenges – from the AI race against the USA and China, to dealing with climate change – we cannot afford to ignore the potential of including more women in the financial sector. By investing in women, both as leaders and entrepreneurs, we can strengthen the entire ecosystem, lay the foundation for more sustainable economic growth, and increase Sweden's competitiveness. If we want to make better investments, we must improve on gender equality. 

 

Andreas Grape, Co-founder and CEO, Nordic Angels Ash Pournouri, Co-founder and Executive Chairman, Nordic Angels Amanda Lundeteg, CEO, Allbright Stina Lantz, CEO, SISP – Swedish Incubators and Science Parks Michaela Berglund, CEO, Feminvest Jessica Löfström, Entrepreneur and Initiator, 17 Network Monica Hedberg, Founder, Monica Hedberg Invest and Co-founder, Asynjor Invest Carolina Lahdo, Founder & CEO, WIB Capital Nastaran Baleng-Soultani, Co-founder, RadCap and CEO, BlueRedGold Jennie Sinclair, Entrepreneur and Board Member, Ownershift