Even in 2022, the issue of the funding gap between male and female founders remains prevalent in the global tech startup ecosystem. There are many solutions proposed to help solve this problem, but putting women at the centre by making them a target for impact investment was a popular one. Investors aim to create a positive impact in society by investing in female founders as part of their impact investment strategy.

But is this really the best solution to the problem? What kind of impact does it bring to female founders, the industry, and society in general? Is it possible that focusing on women for impact investment brings more harm than good?

On November 11, at the She Loves Tech Global Conference 2022 in Singapore, the organisation hosted a debate on women as the focus of impact investment and whether it is the way to go. Chaired by Arvin Abraham, Partner at McDermott, Will & Emery, the debate featured leading names in the global startup ecosystem: Kamila Katya Sharipova (Sturgeon Capital), Michael Lints (Golden Gate Ventures), Mohan Lakhamraju (Great Learning), and Shiyan Koh (Hustle Fund).

Opening the debate was Lakhamraju with his argument of how, in the context of a mature market, putting women in the centre of impact investment is counterproductive to the goal of promoting gender equality in the startup ecosystem. Speaking in favour of meritocracy, he dubbed the motion as “an insult to the capabilities of female founders.”

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Responding to his argument, Sharipova brought up data about how capital that goes to women has not moved in the recent years and that businesses do not “operate in a vacuum” –this means that business owners need to be aware of how their operations are impacting the society. This called for a form of affirmative action represented by women as the centre of impact investment.

“If you’re positively biased towards investing into diverse teams, or teams that understands diversity … that’s teaching women that investing in talented women is the smartest decision [one can make],” explains Koh as part of the opposition team.

Throughout the debate, concerns regarding the long-term impact of a women-centred impact investment kept on coming up. In his speech, Lints pointed out that impact investment on women is nothing more but a “minimal contribution” and a step to “check the boxes” when it comes to levelling the playing field and promoting diversity.

“We also have to remember that impact investment is often the first one to go during a time of crises,” he stressed.

Editor’s take

As a spectator of the debate, if I were to name a winner, then I would give it to Sharipova and Koh’s team. However, the score margin between the two competing teams is relatively thin.

In deciding the winner, I go by the team that can elaborate on their points and defend their key arguments.

While Lakhamraju opened the debate with a bold point about the values of meritocracy, this point was easily tackled by Sharipova in the opening of her speech when she pointed out that meritocracy was not achievable in every market. In communities where there is an apparent disparity between what men and women can do, there are steps that should be taken by policy-makers (and those who are in power) to ensure that everyone can get to the starting point at the same time.

Also Read: Gina Romero’s quest of unchaining women through AI and digital tasks

The affirmative team returned to the top spot with Lints’s argument about long-term impact and sustainability. While these could have been the points that saved the team’s spot, I noticed that Sharipova’s earlier point on the necessity of affirmative action stood –Lakhamraju and Lints’s ideas were not able to be realised without acknowledging the different situations on the ground.

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