Two winners among 10 finalists for Female Founders Competition will get $2 million each, access to tech resources and mentoring.
Microsoft’s venture fund, M12, wants to bridge a funding gap in venture capital and dispel the misconception that few women are building enterprise tech companies.
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M12, along with EQT Ventures and SVB Financial Group, launched the Female Founders Competition in July, which will award two women-led companies $2 million each in funding. Ten finalists, selected from hundreds of submissions from 28 countries, pitched their companies to judges Wednesday at the Microsoft Reactor in San Francisco.
“There’s some sort of myth out there that there just aren’t a lot of women who are starting enterprise tech companies and that they’re generally focused on consumer. I think we’ve proven that’s not true with this competition,” said Lisa Nelson, managing director of M12, which was previously known as Microsoft Ventures.
Broadly, consumer tech companies market to the masses, while enterprise tech companies focus more on selling to other companies.
Women make up about 40 percent of M12’s investment team, but only 7.5 percent of founders in its portfolio are women, according to Nagraj Kashyap, corporate vice president and global head of M12. That’s not enough, and he hopes M12’s investment team, with its more diverse networks, can discover entrepreneurs that less-diverse teams might not come across.
“If we just play it safe and we just go back to our own networks, we will never solve this problem,” Kashyap said. “There’s no shortage of smart female entrepreneurs. We just have to look harder to find them.”
There’s good reason to fund female entrepreneurs. Research shows that companies led by women tend to generate better returns. Still, just 2.2 percent of venture capital funding in the US last year went to companies founded only by women, according to data from industry tracker Pitchbook.