The venture capital ecosystem in Australia has been pivotal in driving innovation and an entrepreneurial fervour that has put the nation on the map as one of the top global startup hubs, delivering the third-highest liquidity behind the U.S. and China.
Despite this, the same vibrant ecosystem faces a monumental drawback: supporting women founders beyond the early stages. The latest Cut Through Quarterly Q3 2024 report reveals promising progress for women founders yet highlights persistent barriers to securing growth-stage funding. Despite advancements, like increased participation of women-led startups at the pre-seed level, the funding gap has widened significantly as these companies mature.
This underscores the need to support women-led ventures right from the start - what we at Antler call day-zero investing - and for the lifetime of their business. The startup ecosystem is more powerful when inclusive, and Antler is working to address these gaps in Australia.
Here’s why we’re dedicated to investing in women from day zero and why we believe that matters.
A Snapshot of VC Funding for Women
The Q3 report offers mixed news for women founders. Encouragingly, 50% of pre-seed deals included at least one woman founder, marking a record high for the second consecutive quarter. However, as companies progress through funding rounds, participation by women founders decrease significantly:
- At the seed stage, women participation falls to 26%.
- By Series A, it drops even further to 21%.
- Later stages remain overwhelmingly male-dominated, with women-led companies rarely reaching Series B or beyond - a trend that has persisted over the last 5 years of reporting.
While early-stage investors are backing women founders more readily, the pipeline narrows drastically as these companies mature. Without sustained support, even the most promising women-led ventures struggle to secure the growth capital needed to scale effectively.
The report shows that women-only teams are still raising smaller rounds than male-led companies. The median deal size for women-led teams is $2.0M, whereas male-led ventures raise an average of $3.0M. This discrepancy is further reflected in Pitchbook, UBS, and Harvard Business Review reports that point to underlying biases in investment processes, lower valuations for women-led startups, and a higher risk-aversion to investing in women-led businesses. Collectively, these hurdles stress the need for more inclusive strategies.
Government-backed initiatives like Advance Queensland's Female Founders Co-Investment Fund and LaunchVic's Alice Anderson Fund are important steps toward greater gender equity in venture funding. However, other programs have been quietly axed like the federal government’s Boosting Female Founders grant, with minimal transparency around what program- if any - will replace it.
Consistency in government schemes should be matched by sustained private-sector investment to support women founders at every growth stage and lower the barriers to entry. So what can Antler, as an early-stage investor, do to help?
The Importance of Day Zero Investing
Investing in women from “day zero” is not just a moral imperative; it’s a financial one. Research from BCG shows that women-led startups are more capital-efficient - yielding 78 cents in revenue per dollar versus 31 cents for male-founded startups - and often outperform male-led counterparts in revenue generation - generating 10% more in cumulative revenue over five years. Additionally, the World Bank reports that women-owned firms in the U.S. are growing over twice as fast as other firms, contributing nearly $3 trillion to the economy. Yet, these startups still receive a fraction of the available venture funding.
Antler supports women founders at the earliest stage, laying the foundation for diverse leadership across the startup ecosystem from the very top of the VC funnel. Our investment terms from the Antler residency are the same regardless of founder gender or background.
By being the first cheque in and offering ongoing follow-on capital, we aim to provide women founders with the runway and mentorship they need to achieve sustainable growth long-term.
Our experience shows that securing funding early is essential for long-term success. Antler companies that raise >US$250K in their first 12 months track towards 40% Series A rate. Yet, as the Cut Through Quarterly continuously reports, women-led startups are often unable to clear this critical hurdle.
With our recently closed $77M second fund, Antler in Australia is doubling down on diversity and sustained founder support. Our new Agreement for Rolling Capital (ARC) investment structure offers ongoing backing for companies that secure at least $300K in funding from other institutional investors in their first year. Again, this is a funding structure which enables an even playing field irrespective of founder background or gender.
The guaranteed backing of a global VC like Antler gives startups a crucial edge in securing follow-on funding. Antler’s endorsement and ARC signal to other investors that the startup has strong potential, reducing perceived risk and boosting investor confidence by ensuring the startup has a clear path to future growth and support. This credibility and capital security make other investors more likely to join early and support a women-led startup’s scaling journey, helping them navigate the challenges of later-stage funding.
Investing in the Future
The path to gender equity in venture capital remains paved with pitfalls, but tangible progress is possible. By investing in women from the start, creating a more inclusive funding landscape, and fostering collective action, we can build a venture ecosystem that is more resilient, more innovative, and more representative of the world we live in.
Antler is committed to using its global reach and experience to push for systemic change, bridging the gender gap in venture capital by supporting women founders through every stage of their journey. Through partnerships with organisations like Beyond the Billion and targeted initiatives like Women of Antler, we’re working to create pathways that allow more women to lead, innovate, and transform industries.
Antler’s 13th residency program is launching across Brisbane, Sydney, and Melbourne in February 2025. This residency provides founders - regardless of gender - with the resources, capital, and mentorship necessary to succeed from the earliest stages to Series C and beyond.
We are now accepting applications for this 10-week residency, and we encourage aspiring and serial founders, commercial leaders, technical builders, and domain experts to apply.
Apply now to be part of our next residency.
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