The Diversity Bill Backers: An Australian VC Firm’s Contribution to California’s Legislation

Down under, only 3% of venture capital funding went to all-women-founded teams, and 10% went to teams with at least one woman founder. In 2021 and 2020, 21% and 25%, respectively, of VC funding in Australia went to startups with at least one woman founder. A report commissioned by consulting firm the Creative Co-Operative found that in 2021, despite a record increase in VC funding in Australia — about $10 billion — just 0.03% went to Bla(c)k women and women of color founders. The VC aims to raise another $100 million for its Fund 2 in the spring of 2024. Beyond just giving women money, Warren and F5 want to create generational change for a billion women across India, Southeast Asia and Australia.

Access to venture funding for women is a pressing issue in countries around the globe. However, in Australia, this issue is particularly alarming. Shockingly, less than 1% of all private-sector funding in the country went to women-founded and led businesses in 2022. This statistic is greatly concerning and revealing of the disproportionate barriers that women face in accessing venture capital in Australia.

But the troubling reality does not end there. Only 3% of venture capital funding in Australia went to teams with all-female founders, while a mere 10% went to teams with at least one woman founder. These statistics show a downward trend, as in 2021 and 2020, the percentages were slightly higher at 21% and 25% respectively.

“For women of color, that number is even worse.”

Unfortunately, the numbers are even worse for women of color. A report commissioned by the Creative Co-Operative consulting firm discovered that in 2021, out of a record-breaking $10 billion in VC funding in Australia, only 0.03% went to Bla(c)k women and women of color founders. It can be disheartening to know that this tiny fraction of funding is all that was available to support the innovative ideas and businesses created by these diverse and talented women.

The term “Bla(c)k” in Australia is used to represent diverse groups such as Aboriginal and Torres Strait Islanders, African Australians, Pacific Islanders, and others.

Tracey Warren

Tracey Warren, CEO of F5 Collective, an Australian venture capital firm and advocacy group, is deeply concerned about these statistics. She fears that women will look at these numbers and become discouraged, causing them to give up on their dreams of obtaining funding for their business ventures.

Warren and the F5 Collective have taken action to address this issue. The firm has sponsored a bill in California that will require venture capitalists to report diversity metrics for the founders they support. This includes information on race, disability status, gender, and LGBTQ+ status. The bill, known as SB 54, was signed by Governor Gavin Newsom in October and will go into effect on March 1, 2025.

“Anything that goes on in Silicon Valley has a ripple effect across the world,” Warren explained in an interview with TechCrunch+. “We needed a precedent, to set a framework to then take to the rest of the world.”

F5 Collective has already invested in eight startups led by women in the Asia-Pacific region, with a goal to reach 12 investments. They have done so through their $5 million proof of concept fund, which was provided by the family office of Kelly Kimball, co-founder and executive chairman of Vitu and chairman of F5. The firm has plans to raise an additional $100 million for their Fund 2 in the spring of 2024. This funding will be used to provide follow-on investments for their current portfolio companies and to help F5 achieve their goal of investing in 1,000 female founders in the APAC region by 2030.

The investment mandate at F5 is broad, as the firm aims to support technology that will shape the future as well as social and environmental impact technology. While the founding teams can be diverse, a woman must hold a position of actual leadership within the team.

“None of that giving a woman 2% equity and shoving her into a founder title,” Warren emphasized.

Beyond providing financial support to women, Warren and F5 have a larger goal of creating generational change for a billion women throughout India, Southeast Asia, and Australia. The venture capital firm’s fund is just one aspect of a comprehensive five-pillar strategy that includes mentoring women to become angel investors, working with corporations to facilitate pilots and utilize cases for women-led startups, and advocating for policy changes.

This is where California’s SB 54 comes into play. Warren explained, “What gets reported and measured gets changed. If we don’t start reporting, we’ve got nothing to start with.”

Advocating for Political Change

Policy is the second pillar of F5’s strategy. However, implementing political change in Australia can be a more challenging task than it is in the United States. Warren notes that lobbying is not as robust in Australia, making it more difficult to push for changes. Additionally, passing a bill like SB 54 in Australia would be a long and arduous process, far surpassing the three months it took to pass the bill in California.

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Kira Kim

Kira Kim is a science journalist with a background in biology and a passion for environmental issues. She is known for her clear and concise writing, as well as her ability to bring complex scientific concepts to life for a general audience.

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