Is there a disconnect between impact investing and gender lens investing? It’s complicated - Generocity Philly

Funding

Mar. 30, 2017 10:47 am

Is there a disconnect between impact investing and gender lens investing? It’s complicated

“We don’t really invest with a gender lens, and I personally don’t, but I have invested in a lot of companies that are led by women,” said Investors’ Circle President Annarie Lyles.

Not that kind of gender lens.

(Photo via Flickr user katie, used under a Creative Commons License)

What exactly is gender lens investing?

Wharton Social Impact Initiative (WSII), for one, is paying particularly close attention to the impact investing strategy this year, with a report about it set to come out any time now and the recent announcement of WSII acquiring all the content from Women Effect, a “hub for thought and strategy around gender lens investing.” The initiative is also dedicating part of its upcoming conference to the topic.

A conversation with Annarie Lyles, president of Investors’ Circle (IC) Philadelphia, the local chapter of the national network of social impact investors, shed light on how complicated it might be to find a concrete definition.

But first: Women Effect states in its basic rundown of gender lens investing (also known as “women effect investing”) that it’s a “new field, and it’s evolving” while those working in the field “have slightly different definitions” of the concept. The gist of it seems to be that gender lens investors consider these frames when looking at what companies are, or aren’t, doing:

  • “Demonstrating gender equality throughout the value chain
  • Founded or run by women entrepreneurs
  • Offering products and services which have a positive impact on women and girls
  • Working to dismantle structural gender inequality
  • Addressing urgent human rights or social justice issues
  • Women as investors”

When asked about whether or not IC considers itself a gender lens investor, Lyles said the network of individual investors does not.

“Our lens is impact,” Lyles said. “We don’t really invest with a gender lens, and I personally don’t, but I have invested in a lot of companies that are led by women. It may have something to do with the fact that we’re impact investors — it’s a little bit more holistic way of looking at things.”

Yet nationally, the investing of venture capital in companies with at least one female founder is at 16.9 percent (as of 2016), whereas IC’s investing in this category is at about 43 percent among the group’s most active investors. Therefore, the group is fulfilling at least two of those aforementioned lenses: investing in more companies “founded or run by women entrepreneurs” and  “working to dismantle structural gender equality.”

From our Partners

Some of the local women-led or women-founded companies IC Philly has invested in include Sustrana, MilkCrate and edtech company KickUp.

Annarie Lyles.

Annarie Lyles. (Courtesy photo)

Not to mention that IC’s membership nationally has “traditionally been at” 30 percent women. That kind of diversity both within IC and its portfolio companies — and not just diversity of gender — is something Lyles said the group values in becoming “better investors and giving us better opportunities.”

Some impact investing groups, such as Golden Seeds, intentionally only invest in women-led businesses. But for those that don’t, gender lens investing could be seen as a restriction of sorts, and Lyles believes IC as a group wouldn’t take up that mantle.

As an individual investor within IC, though, anything’s game, and Lyles, who doesn’t consider herself a gender lens investor, said she notices when it’s all guys on the management team or board of a company.

“I think they may not be quite as strong [as a company] and I would probably ask questions as to why it was,” she said. “I might still decide to invest in them but it would be a red flag for me.”

At the end of the day, maybe Lyles is a gender lens investor — Women Effect states that some people can be women effect investors without even realizing it. But Lyles makes clear the difficulties she sees with this kind of investing, the biggest being with how limited angel investing already is.

“If you think about the big pool of businesses wanting funding, only a subset are suitable for angel investors,” she wrote in a follow-up email. “At [IC], we only look at the subset of these that have promise for social and environmental benefits, as well as profitability. Within the Philly IC network, we usually also further select the fraction that have Philadelphia connections. Within this small fraction of businesses that are suitable and seeking angel funding plus being for-benefit and local, any additional screening based on gender or other diversity lenses would leave us with too little deal flow for our members.”

Since we’re going with the lens imagery, Lyles compared it to a camera — every filter added makes it harder for an image to be captured as clearly. As if measuring social impact wasn’t complicated enough.

Instead of outright rejecting a company seeking funding just because it happens to be all-male, Lyles suggested steps that can be implemented after investing, such as asking a company to take on a women member from the investment group to become an advisor on its board, which she said IC Philly has done before.

Want more richly researched and deeply sourced community reporting?  Become a Generocity member for $10 per month -30-
LEAVE A COMMENT

From our Partners

Report: Race, housing insecurity, and COVID-19 are connected

Opinion: We could have ended family detention in PA in 2016. Why is it allowed to continue?

How Black cartographers put racism on the map of America

SPONSORED

Generocity Philly

Inscripción Doble en Congreso: Lo que trae el futuro

1515 Arch Street Philadelphia, PA 19102

City of Philadelphia, Rebuild

Director of Evaluation and Learning

Apply Now
Remote; from home office

New Horizons Senior Center

Communications Assistant

Apply Now
Philadelphia and Bala Cynwyd

JFCS of Greater Philadelphia

Youth Engagement Program Coordinator

Apply Now

If accessibility seems an unsolvable riddle, the Penn Museum offers an answer

This Philly symposium was born from the rich intellectual tradition — and the erasure — of Afro-Latinxs

What did ‘A Better Chicago’ do for poverty that could work in Philadelphia?

SPONSORED

Generocity Philly

Dual Enrollment at Congreso: Where does it go from here?

Philadelphia, PA

United Way of Greater Philadelphia & Southern New Jersey

Chief Knowledge Officer

Apply Now
Philadelphia, PA

Campus Philly

President

Apply Now
Philadelphia, PA

The Pew Charitable Trusts

Senior Officer Pew Fund

Apply Now

Sign-up for daily news updates from Generocity