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Coronavirus increases funding challenges for female entrepreneurs


In Australia, women-focused angel investor network Scale Investors has seen funds directed towards existing investments rather than new startups.

Chief executive Ariane Barker said the female entrepreneurs she works with were mostly concerned with “runway” or the income needed to ensure the survival of the company rather than investment drying up.

“It is still definitely challenging for female founders to raise money full stop,” she said. “The particular challenges for women are getting confident enough in their pitching styles and articulating their growth metrics. Women tend to be really transparent about the pros and cons of their business so they can come across as not as confident as their male peers.”

Ms Barker said Scale was focused on supporting its existing portfolio companies to ensure they had enough funding to support growth.

“For new companies applying we are being very pragmatic about valuations,” she said. “The public markets have fallen so much, investors are looking carefully at where they allocate capital. Valuations were inflated before this happened and this has sharpened everyone’s focus on the businesses looking to raise capital.”

Defying the downturn Australian entrepreneur Phoebe Yu on Monday announced she raised a $2.5 million seed round for her sustainably made bamboo textiles startup Ettitude.

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Ms Yu founded Ettitude in Melbourne in 2014 and is now based in Los Angeles where she secured the funding from Drumbeat Ventures, a US-based fund investing in breakout brands and TA Ventures, a European female-founded fund focusing on technology innovation.

Ms Yu said she was fortunate to have begun her conversations with investors before the coronavirus crisis hit and they were confident in her strategy for Ettitude.

“For us our investors are always a good mix of men and women,” she said. “They hopefully look at the business itself. I don’t think people reject us because we are women led, they hopefully look at the fundamentals.”

Ms Yu said Ettitude’s products which include bedding, sleepwear, towels and robes made from a new generation clean bamboo fabric had been selling well during the pandemic as people focused on their homes.

However, she said it was a challenging time for entrepreneurs and particularly those looking for funding.

“If total funding dries up I think women and minorities get hit even harder,” she said. “You need to talk to investors and show them you have a strong business and strong team to get through the crisis.”

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