Episode 2: Women who Invest & Investing in Women
DR MELISSA FOO, XELIA TONG & ELAIN LOCKMAN
ACTIVE FEMALE INVESTORS IN MALAYSIA
“We don’t have many female-led LPs, which is a core reason why there are hardly any women-led VC funds in the Southeast Asian region”
ABOUT THIS EPISODE
They say it’s a man’s world - yet according to Crunchbase, research has proven that despite female-led businesses generating greater returns than male-led businesses, only 2.3% of all VC funding go towards women. Some say women lack confidence, some say women are discriminated against. Our hypothesis is - could it be that the reason more male founders raise funding is simply because there are more male funders? According to Deal Street Asia, that seems to ring true as they have found 73% of VC firms in Southeast Asia don't have a single woman investment partner. This issue has sparked an industry-wide (and dare we say worldwide) debate on the lack of female representation on the cap table leading to fewer female founders receiving funding.
In this episode, we speak with three prominent Malaysian female investors Dr Melissa Foo Suyin (Vice President of the Malaysian Business Angel Network), Xelia Tong (Managing Partner of ScaleUp Malaysia) and Elain Lockman (CEO and Co-Founder of equity crowdfunding platform Ata Plus) as we discuss why women aren’t able to break into the investment scene, why women investors deserve to be at the cap table and their contribution towards better supporting women investors and founders.
We’d also like to thank our fellow female founders and special guests:
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GUESTS ON THIS EPISODE
Dr Melissa Foo Suyin, Vice President of MBAN
Dr Melissa is a global investor and portfolio manager focusing on impact investment, ecosystem development and innovation. Previously based in New York from 2013 – 2016, she worked on multiple early-stage deals in FinTech, Healthcare, Education, B2B, Real Estate Technology and Social Enterprise. Currently, she consults for the Malaysian government on Ventures and Corporate Entrepreneurship and Social Innovation and serves on the board of her family healthcare company. When she is not identifying the next big thing in impact and innovation, she is passionate about travel, meeting people, making connections and giving.
Xelia Tong, Managing Partner of ScaleUp Malaysia
Xelia has always been known for her role in helping develop funding for the start-up ecosystem through her work from MDV to Cradle, where she headed Investments and the Angel Tax initiatives. At ScaleUp Malaysia she works with our companies to help connect them to the right investors. A live-wire by nature, Xelia’s cheerful disposition and charm is the kind of support you need during difficult times.
Elain Lockman, CEO and Co-Founder of Ata Plus
Elain has extensive experience in government-linked organisations and start-up businesses, specifically in the areas of management & operations. With strong communication skills and the ability to communicate and negotiate with internal and external parties at all levels, she has a an extensive network in the public and private sectors in Malaysia. She graduated with a degree from the London School of Economics & Political Science.
EPISODE TRANSCRIPT
Dr Melissa Foo Suyin 0:01
Can you, for like three minutes or just a minute, write something that is like completely braggy? Just say everything that's good and every achievement that you have ever done, and just list it out and say it to someone. We found it so difficult to even say five, very, very braggy and very, very overachieving things about ourselves, but why?
Hardesh Singh 0:56
Women hold fewer management roles. They are paid less compared to their male counterparts. Many get passed over for promotion, and many of them also experience sexual harassment at the workplace. We hear these stories often enough, unfortunately. So it should follow that if a woman instead decides to take matters into her own hands, start her own business where you know, she would get to lay down the rules, things ought to be more equitable, correct? Well, not quite. Women founders also get a much smaller chunk in startup capital compared to their male counterparts. So it's not really a surprise anymore to most of us that male entrepreneurs outnumber female entrepreneurs. Some people think it comes down to the lack of confidence among women. Some blame it on discrimination. We'll come back to these themes in a bit. But I wanted to test another hypothesis. Could it be that the reason more male founders raise funding is simply because there are more male investors? Imagine this. A female founder walks into a room full of male investors. What do you think the chances are of her getting the money she wants to race? So the question worth asking here is, how much different would things be for female founders, if there were more female investors? Hi, I am Hardesh Singh. And I'm the managing partner of Bawatana. At Bawatana, my partners and I are always looking for founders who excite us, female or otherwise. I spend a lot of my time thinking about what makes a good founder and where to find them. And that's what really got me thinking about this. What if some of the best founders - and many of them might be women - just don't get on our radar because they're cut off from opportunities much earlier on. And this is my co host, Ayesha.
Ayesha Rahman 2:57
Hi, I'm Ayesha, the co host of The Bawatana Podcast. And that quote at the top of this episode was by Dr. Melissa Foo Suyin, Vice President of the Malaysian Business Angel Network. You'll be hearing more from her as well as Xelia Tong, Managing Partner of ScaleUp Malaysia, and Elain Lockman, CEO and Co-Founder of equity crowdfunding platform Ata Plus. Their sound bites are from a Clubhouse session we had in May about women who invest and investing in women.
Hardesh Singh 3:24
So Ayesha, before we go any further, let's just set the stage. What do we know about the number of female founders compared to male founders?
Ayesha Rahman 3:34
According to a report by Deal Street Asia, women founders and co founders accounted for a mere 16.4% of the overall disclosed fundraising in the Southeast Asian region in 2020. Despite women opening almost 40% of all businesses, they only get 0.9% of capital raised in 2020. There's also mounting data that proves greater returns are generated by female founders. So according to the Boston Consulting Group, for every dollar of funding, women-led startups generated a return of 78 cents versus male startups, which only generated less than half at just 31 cents.
Hardesh Singh 4:10
Okay, so that tells us we definitely want more female founders. But what do we know about female investors though?
Ayesha Rahman 4:17
So it turns out that the situation for female investors isn't that much better than female founders. According to Elain, only 29% of investors on Ata Plis are female, in comparison to there being 69% of male investors. Here's where it gets interesting. The total investment amount by females far outweighs our male counterparts. According to Elain, 70% of investments actually come from female investors on Ata Plus. We've been seeing a growing trend of female investors supporting more female entrepreneurs, especially within the lifestyle and retail sectors. The low number of female investors is definitely not unique to Ata Plus, Melissa from MBAN shares her insights on female angel investors.
Dr Melissa Foo Suyin 4:56
I'm definitely not proud to report but in the Malaysian Business Angel Network of all our members, we only have 17% women representation. So for every one female investor that has registered, we have four male investors. So that's really a very low ratio. And we would definitely like to see more women investors investing in early stage startups.
Hardesh Singh 5:19
Okay, so we definitely want more female investors. But Xelia had a really interesting insight from our live session. And I have to admit, I was a little taken aback at what she had to share. Just listen to this.
Xelia Tong 5:33
But here, at least in Asia, or in Malaysia, there are actually investors that I've actually spoken to, whereby their investment decisions are actually made by the wives. But the investments are actually made under the husband's name. So I don't have stats to prove that. But there are many angel investors that I've spoken to whereby the women is actually the one that wears the pants, but then the ones that actually put their name down into the investments are the men.
Hardesh Singh 6:07
Interestingly, we also had a Q&A during the same session, and someone from the audience was kind enough to share her own story and her anecdote totally floored me.
Elizabeth Siew 6:18
Yeah, guys. Okay. On the issue of women who invest. I'm a woman entrepreneur. I am also a tech startup founder. I'm also a MBAN registered angel investor. But I think why Malaysia has so few women who invest is partly because of our culture. It's an Asian culture thing. Why? Because even though I myself being such an independent woman, whenever I need to invest, I need to ask for blessing from my husband. This is very much an Asian thing. So in the past, I have missed a lot of good investments because I asked for his blessings.
Ayesha Rahman 7:01
By the way, that was Elizabeth Siew, founder of the LePro System and a fellow female tech entrepreneur and angel investor.
Hardesh Singh 7:07
Okay, I feel we need to take stock now. So it seems that there are a few explanations on offer here. One is that women are making investment decisions, but it's in the husband's name, as suggested by Xelia. Second is that there may be women who want to invest and are good investors, but need to get blessings from their husbands. And thirdly, maybe it's a confidence issue. I definitely know more female friends who second guess their own abilities compared to male friends. Here's Xelia on the confidence equation.
Xelia Tong 7:44
We recently had like a women's networking thing. And we sort of discovered something like, there are many capable women out there. But we are generally all very shy, we don't go about fleshing out credentials, and volunteering ourselves to say that, hey, you know, I can take on the job, I can take on the project. They may probably try to push somebody, like a guy to sort of do it? I'm not sure, I think it could be a confidence thing. You know, I think we had about like 20 plus women and all of us agreed that most women, we tend to be kind of shy, and then we don't want to sort of be in the limelight.
Hardesh Singh 8:22
Now, whether it's confidence issues or cultural norms, the fact is that there are far fewer female investors. And this is not just at the retail investors or even angel investors level, even at VC and institutional levels, there definitely seems to be fewer women who make investment decisions. Here's Elain again.
Elain Lockman 8:45
You know, we don't have many female-led LPs, you know, so I think that's one of probably the core reasons why in this region, you hardly see any women-led VC funds compared to those in the States or even in Europe.
Hardesh Singh 9:06
Remember that hypothetical room with all the male investors? Now, here's why it can become a problem.
Elain Lockman 9:14
I do get, you know, feedback and through my various exposures with other female entrepreneurs who are looking for funding, and some do get, you know, have provided or given comments that, you know, they felt that there was a lot of gender biasness when it came from, you know, from VCs who meet them, right. Some comments or feedback that they felt wasn't fair. But I think if you look at some of the reports in the last couple of years, it actually showed that investing in women ventures or women businesses tend to give much higher return, you know, better returns, you know, for whatever reason. So I mean, women tend to be better performers in that sense. So that, you know, but I do get that, that feedback from female entrepreneurs.
Ayesha Rahman 10:21
None of this is surprising, Hardesh. We also had a couple of female founders at the Clubhouse session. And it's kind of worth listening to their experience. First up, Melissa Sim, CEO and Co-Founder of AdEasy - an online marketplace for offline advertising.
Melissa Sim 10:34
My co founder and I both would be attending all these networking events, and I have to say my co founder is quite a good looking person. So she tends to actually attract really different kinds of guys who pretend to be investors or pretend to be interested in investing in AdEasy, you know. So after a few rounds, we've decided that you know, what, if they're serious, they should be talking to me. So that's how we kind of like, filter through whether those are really legit investors who are interested in investing in AdEasy, or just wanted to ask us out for coffee or drinks.
Ayesha Rahman 11:15
And here is Pennie Lim, founder of Homa2U - an online marketplace for construction and renovation materials.
Pennie Lim 11:20
So I've been in all kinds of you know, discrimination. For example, eh you are a girl. You should you know, after give birth, you should be staying at home, or I do, I'm pretty good looking, in a way. Very attractive personality. So I do attract a lot of, you know, funny people like asking me whether you want to be my sugar baby? Or are you being, you know, supported by some Datuk or things like that, because I do actually have a mentor. Dato' Michael Tio from PKT Logistics. So a lot of people would think that, okay, you must be backed by this Dato' or things like that. But actually, I'm not. I'm just blessed to have four angel investors to back my startup.
Ayesha Rahman 12:04
I've had the privilege of getting to know these two incredible women. Melissa possesses a quiet confidence. And then we've got Pennie, who's a mom of two, by the way, who owns her confidence and really makes sure that everybody knows it. Regardless of their life obligations, they've got passion, and they're so willing to play the game. So it's a huge disservice to make decisions on behalf of female founders, just because of one's assumptions in their ability should a personal life situation arise. The sad reality is female founders still get needlessly penalised. Here's what Elain had to say about what some female founders had to go through.
Elain Lockman 12:38
One of the female entrepreneurs were saying that, you know, in one of her pitch sessions, you know, she had a question where she was quite shocked, because the person actually asked her, "Oh, do you intend to get married and have children?". You know, and she was thinking, what has that got to do with anything? Right? You know, but I guess, you know, the concern was that, how will you then what would happen to the business, you know, if you then decide to have kids, and then you know, would it affect your focus? And how would you then, you know, what about your leadership and the second liners and so on and management of the company?
Hardesh Singh 13:24
Okay, to be fair, not all male investors discriminate against female founders. But even so, many of them may overlook viable investments simply because they don't understand certain markets. It's a little harder to wrap our heads around this. Good investors take it upon themselves to know a great deal about the industries they wish to invest in. And perhaps they may have a very specific thesis. Say, for example, only investing in FinTech or prop tech startups. I know quite a number of female founders with startups in the fast moving consumer goods segment. Or let's take the beauty industry as an example. That's a market that recorded sales of 483 billion USD in 2020. Almost half a trillion dollars. These founders, they wouldn't get funded by tech bros. Simply because the industry and the investing theses don't align. Or it may be that a female founder is working on a startup that is solving problems very specific to women. An area that perhaps a male investor might not fully understand. Now, Xelia actually threw me this curveball during the live session.
Xelia Tong 14:39
Hardesh, as an investor. I mean, like if you were to go to like a conference and usually in like startup conferences, you have startups who put up booths showcasing in terms of the products and all - would you walk to a booth that sells menstrual cups?
Hardesh Singh 14:57
I'll spare you the full recording but in short, I answered yes. I would, in fact walk up to that booth. But I actually want to take a second crack at answering this, because I didn't fully appreciate a point that Xelia was trying to make. And the truth is that if that was me walking into the conference 10 years ago, I'd have to admit that I would, in fact, avoid that particular booth.
Ayesha Rahman 15:23
And why would that be?
Hardesh Singh 15:25
You know, I'm pretty sure it's not because I was embarrassed, but probably would have made a hasty decision that, you know, this is not a product for me, and therefore, it doesn't concern me, and I'll just pass.
Ayesha Rahman 15:38
And you won't pass now?
Hardesh Singh 15:41
I can very confidently say I would not pass now.
Ayesha Rahman 15:44
So what changed things for you?
Hardesh Singh 15:47
Female employees. About six to eight years ago, I was running a team that was about 80% female. And some days, some of them just come up to me and say that, you know, they were on their period and would like to work from home, or that they were just not feeling great. At first, it felt really odd. Like, you know, I don't really need to know this. But then my views evolved. I mean, if a guy came to me and said that he was having a backache, and wanted to work from home, I wouldn't find it odd at all. And so I became totally cool with them just telling me that they were having cramps or having a heavy flow and wanted to work from home. So yeah, I would totally walk up to the booth now to see if there was some new innovation and product that a huge part of the population uses.
Ayesha Rahman 16:33
So it rings true then that having fewer female investors might affect the way that investors view the true potential of female founded startups.
Hardesh Singh 16:41
I would think so especially if these startups just happen to be in industries that serve very specific needs of the female population. So back to the hypothesis, it seems that we really want to have more female investors making investing decisions. One because it can help address discrimination, but two so that investing decisions itself benefit from more diverse insights and experiences.
Ayesha Rahman 17:09
Oh, but on that note, we have to come back to Elizabeth. You know, the one who had to ask for her husband's blessings for every investment decision? She's got a really amusing solution.
Elizabeth Siew 17:18
I realised that if you want to train more women to invest, you might as well train the couples. So you got to, it's like, you know when you want to train children, you got to train the parents first? So if you want to train women to invest, train the couple so the husband will have confidence to let the wife make a financial call.
Hardesh Singh 17:37
The Bawatana Podcast is produced by me - Hardesh Singh. And assistant produced by me - Ayesha Rahman.
Ayesha Rahman 17:38
If you would like to catch our live conversations, you know the raw versions that we use to produce these podcasts, you can follow Bawatana on Clubhouse. These sessions take place usually on the last Friday of every month. Also, you can read our blog at www.bawatana.substack.com, where we feature our thoughts, opinions and predictions on the latest happenings in the startup and venture capital scene over here in the Southeast Asian region. But the easiest thing you can do is just follow us on Facebook and Instagram at @bawatanaco and you'll be able to catch all our updates on our Clubhouse sessions, latest newsletters, new podcast episodes and upcoming events.
Transcribed by https://otter.ai