Europe’s Top Female Startup Investors on VC Representation

• Insider published the Seed 10, which lists out the top female seed investors into European startups.
• They say representation is improving, but slowly.
• Female investors are less likely to have fund carry, and to be able to afford GP commit in funds.

Sophia Bendz still frequently finds herself “the only woman in the room” when striking tech deals.

Bendz, general partner at venture capital firm Cherry Ventures, tops Insider’s 2022 list of the top female seed investors, a mix of entrepreneurs, angels, and VCs.

Formerly Spotify’s global marketing director, Bendz was drawn to angel investing after seeing first-hand how the streaming giant scaled to millions of users across more than 50 markets. Her first bet was on Tictail, a marketplace for independent retailers that eventually sold to Shopify.

She joined Atomico, the venture capital firm set up by Skype founder Niklas Zennström, while eight months pregnant with her second child. After making partner, Bendz headed to Cherry Ventures.

She was one of “few” women in VC in those earlier days, she said. “I was lucky to be surrounded by some great ones, but we were definitely a minority.”

As recently as five years ago, there “would be a little bit of an eye roll” if someone brought up diversity in tech, according to Eileen Burbidge, cofounder of Passion Capital and a well-known face on London’s startup scene. 

Today, nobody rolls their eyes. “It is a business imperative and a foregone conclusion that diversity in decision making leads to better outcomes,” Burbidge said.  

“Diverse teams perform better,” added Bendz. “Various studies have shown this. We should be striving towards equal representation among genders.”

Just 12% of top investing roles are held by women

Burbidge said she was one of only five female GPs when she launched Passion Capital in 2011: Anne Glover, who cofounded Amadeus Capital Partners in 1997; Sonali de Rycker of Accel, and Laurel Bowden of 83North, formerly Graylock, who both took on general partner (GP) roles in 2008; and Reshma Sohoni, who cofounded Seedcamp in 2007. 

The picture is improving, if slowly. Burbige points to the new generation of female GPs, such as Ophelia Brown at Blossom Capital, Evgenia Plotnikova at Dawn Capital, and Nora Bavey and Thea Messel at Unconventional Ventures.

Still, just 12% of the top roles at venture firms — such as partner or GP — were held by women in 2021 — a slight decrease from 13% the previous year, according to Atomico’s State of European Tech reports. 

This has implications for who gets rich in venture, and who calls the investing shots. VCs are usually rewarded with fund profits, or carry, based on seniority and even then not uniformly. Around 70% of female GPs have carry, versus 91% of male GPs.

“If you haven’t negotiated a carry, then you’re working hard for someone else’s profit — that’s not how it should be,” said Bendz. “I would recommend to anyone who is considering a career in VC to find funds with a true partnership and their carry is split equally.”

In Burbidge’s opinion, whose firm gives every team member carry, “there shouldn’t be any GPs without carry.”

GP commit requires female fund managers to have wealth

GP commit, which is the amount of money GPs must put into their own fund, normally standing at 1% of its total, is another challenge. Without being personally wealthy, it can be a Catch-22.

“As LPs, you want skin in the game, and a good way for skin in the game is GP commit,” said Seedcamp’s Sohoni. 

Seedcamp increased its fund size iteratively, first raising £2.5 million and increasing its size each fund to reach £80 million today. This meant Sohoni could initially keep her GP commit low, as an emerging manager with little track record. 

Sohoni looked at GP commit as a problem-solving and budgeting exercise, she said, and came up with potential solutions alongside Seedcamp’s LPs. “That transparency allowed our LPs to say: ‘Okay, well, you’re also not paying yourself some ridiculous salary, so fair enough that you can’t put in a huge commitment.'”

Burbidge, on the other hand, took a loan for the GP commit on her first £45 million fund.

Despite being in the industry for over a decade, Burbidge has not experienced a carry event. She is not “independently wealthy,” she said. “So I still can’t angel invest nearly as much as I like to.”

Without personal wealth, it is also difficult to start angel investing, which is often hailed as the best way into VC. Burbidge had her start doing due diligence for an angel syndicate set up by former Skype employees who made their cash from the company’s sale to Ebay. 

The boom of the European ecosystem means that accelerators, incubators, and scout programmes could also be a foot in the door. 

Like Burbidge and Sohoni, more and more women are setting up their own funds. 

Going down this path isn’t easy. “I don’t think I feel comfortable saying it’s accessible to everyone,” Burbidge said. “I do, however, think that LPs or investors in fund managers are definitely much more concertedly looking for diverse GPs to back.

“That’s not to say that there weren’t ones doing that 12 years ago – I’m sure there were – but I think there are many more that do it now.” 

Startups, too, are pressuring investors to have better female representation. While this may not mean hiring women into top jobs, it creates a baseline of people to move up through the ranks in the next 10 years, Sohoni said.

You can find Insider’s full Seed 10 list here.