Women remain unacceptably underrepresented in key leadership roles – as CEOs or in positions on boards. We know efforts have been underway to encourage more girls to embrace STEM subjects to support diversity in the workforce of tomorrow. But there’s one area that’s been largely overlooked – female entrepreneurs. Until recently.
Last month I was honoured to engage in a meaningful discussion alongside some incredible people about how we can actively diversify our LegalTech community through the WALTA Think Tank. In Australia, fewer than 31 per cent of entrepreneurs are female, and the legal tech industry is no different.
As someone who has spent the majority of their career in technology and now with PEXA, working with the legal profession, this is truly close to my heart.
We began as a start-up and I’ve had the opportunity to be involved in capital raises, a trade sale and our recent listing on the Australian Securities Exchange. These experiences have allowed me to witness challenges and opportunities from all angles – with different perspectives critical in our success.
PEXA’s humble beginning was the catalyst for the formation of PX Ventures – designed to offer funding, bespoke services and programs for like-minded entrepreneurs and businesses who have an ambition to set the standard for how we buy or sell property. As an advisor to PX Ventures, I see it as my duty to be the voice that amplifies those of female founders and entrepreneurs and to encourage women to bring their ideas forward.
PEXA recently collaborated with the Australian Legal Technology Association (ALTA) and Alpha Creates to produce the “Diversity in LegalTech – it’s time for action” report. This report reveals that in 2020, only 11 per cent of funds were raised by companies with a female founder, with 9 per cent going to those with both male and female co-founders and only 2 per cent to female founded start-ups. This trend is far-reaching, as not only do women seem to raise less funding than their male counterparts, but they are also less likely to raise subsequent rounds, retain less equity in their companies – ceding more control to investors.
The result? Female led businesses remain smaller than their potential, missing out on the investment required to grow and flourish.
With the Australian government stating the economy could grow by as much as $25 billion if more women were empowered and supported to meet their goals, it’s clear to see a very real missed opportunity. This is especially the case when considering research shows that female influenced start-ups experience lower failure rates, produce more capital-efficient companies, and achieve higher venture capital returns.
But it’s not just about the dollars and cents. It’s the right thing to do. Greater female participation better reflects the composition of the industry being served.
With women representing merely 20 per cent of partners in Australia’s 120 venture capital firms, it’s not surprising that it’s harder for female entrepreneurs to access funding. Representation matters. Today, within the LegalTech industry, we have to be more purposeful in our focus to help female entrepreneurs access knowledge, capital and community because formal channels are not working, and long engrained biases will take time to change.
As the abovementioned report shows, the challenge does not occur in LegalTech alone and is prevalent across all industries, evidenced in similar discussions I’ve had with Fintech and Proptech associations. We need to amplify our voices together, where it makes sense, and harness the power of the collective. This will be critical to draw the attention of Government and to drive meaningful change.
PEXA is proud to have partnered with ALTA – currently the only legal technology association that has formalised a women’s chapter with the creation of WALTA, and a leader in commissioning this important research. This is just the beginning.
During the WALTA-organised virtual Think Tank it was great to hear from 34 amazing attendees sharing real life stories and presenting such poignant actions for change. The key takeaways were:
- Funding challenges – Education regarding the types of funding, understanding the implications of funding options, coaching for founder pitches, scan the market for those more likely to fund female founders, establishing a WALTA investment fund, opening our individual networks to the WALTA collective.
- Being heard – Call out the bias and unacceptable behaviours. Female voices need to be at the decision-making table, consideration for diversity in procurement decisions across law firms.
- Female founders exist – Shine the spotlight on the amazing women we know, be generous with each other, use social media, lobby industry bodies, universities, and corporates alike to work with us in showcasing female founders.
There can be no change without discomfort and no growth without conflict. We need to acknowledge and embrace it to prepare the pathway for the next generation. Everyone deserves the opportunity to live their dream and there are so many women out there with the capacity to positively contribute to the world.
We should all want to support them in achieving their highest potential.
By Lisa Dowie, Chief Customer Officer, PEXA