Venture capital fund for women-led businesses aims to challenge 'old boys network'

The Nova Scotia government's $5-million contribution to a venture capital fund targeting women-led businesses in Atlantic Canada is the fund's largest injection to date and one of the managing partners hopes it leads to more.

In announcing the contribution last week, Premier Stephen McNeil noted the COVID-19 pandemic has had a disproportionate effect on working women.

"They not only lost their jobs, but they had a very hard time getting back into the workforce, let alone finding a well-paying job," he said.

"We need women to be active members of our economy, we need women to drive our economy, and we need women in business and in the tech sector and we need women entrepreneurs."

In an interview Tuesday, Rhiannon Davies said she and her colleagues launched Sandpiper Ventures to address the lack of venture capital that goes to women.

"The need is really in women-led companies because there are a lot of inherent biases related to this sort of old boys network that's associated with venture capital at the moment," she said in an interview.

"So we're trying to look at it from a diversity perspective, an intersectional diversity perspective and investing in companies that have a woman in a leadership position. And it can't be a token leadership position; she needs to also have equitable ownership in the company."

Funding not restricted to N.S. companies

The focus of the fund right now is women building "groundbreaking technology companies." Davies said the fund's first investment, to be announced soon, will be in a Nova Scotia company.

According to a spokesperson for the premier's office, the $5 million was recently signed off on by cabinet. The money comes from the budget of the Business Department. In a statement, McNeil said the government is not restricting its use to Nova Scotia businesses.

"The $5 million will be used to invest in companies within the Atlantic region, including companies in Nova Scotia. Women entrepreneurs in Nova Scotia are encouraged to apply to this fund to take their idea to market or grow their business," he said.

Davies said she and her colleagues launched the fund last year with a goal of raising $20 million. Although she declined to say how big the fund is right now, she said they're close to half of their goal.

More investments expected

Friday's announcement was the culmination of talks since last June with provincial governments, institutions and the private sector, said Davies. The fund has or is expecting investments from other provincial governments, although Davies declined to provide details.

"We want to give them the opportunity to have an announcement as well," she said.

The success of the venture will be based on things such as the number of companies that receive investments, their value, the number of jobs created and how many people from underrepresented communities lead those companies, said Davies.

"Ultimately, the greatest indicator of success is that our investors collectively, in sort of three to five years time, believe in us enough to support us in building a second fund."

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