IWD2024: African Women In VC Are Levelling The Playing Field One Deal At A Time

In the spirit of International Women’s Day 2024, aptly propped by this year’s campaign themes: “Inspire Inclusion” and “Invest in Women: Accelerate Progress”, we got in touch with one of the notable figures among a rising crop of women breaking barriers in Africa’s startup and venture capital landscape.

In the spotlight is Andreata Muforo, a Partner at TLcom Capital, a driving force behind transformative tech investments on the continent.

Despite Africa having the world’s highest proportion of women entrepreneurs, the tech ecosystem faces a significant gender funding gap, with solo female founders securing only 2% of last year’s venture capital.

TLcom Capital, committed to breaking barriers, actively supports underrepresented founders.

In this conversation with WT, Andreata discusses challenges, milestones, and opportunities, exploring how TLcom Capital collaborates with mission-driven companies, led by women and local founders, to address crucial funding gaps on the continent.

This detailed interview offers a unique perspective on diversity and inclusion in the tech sector during ongoing conversations for Women’s History Month.

What are the key challenges women entrepreneurs face in accessing venture capital, how can TLcom Capital contribute to overcoming these challenges, and why is this of significant importance?

Andreata: Female founders face a number of challenges when accessing capital.

Firstly, venture capital is a broadly male-dominated industry that relies on network effect and warm introductions for deal sourcing. Secondly, there is limited capital for women at the pre-seed stage, to even get started, which results in a pipeline of fewer female founders at the later stage.

Additionally, unconscious and conscious biases persist amongst investors on what makes a “strong entrepreneur”, which impacts their decision-making.

For example, there are certain “Alpha male” traits i.e. possessing a dominant personality or overselling yourself that some investors have identified as signs of strong leadership and research shows that men sell themselves more than women in situations such as pitches and application processes. 

To speak only about capital does not give the full picture. Many female founders are locked out of critical networks where ‘the deals are getting done’. Female founders need access to networks to establish commercial partnerships, access working capital and hire great talent.

At TLcom, we’re committed to tackling these issues not only from a moral standpoint but also because there is economic value being left on the table. Half of the global population are women, and we believe that there is a pipeline of talent that is constantly being overlooked and underrepresented.

If we take this into the context of venture capital, breaking down these barriers not only establishes a richer pipeline of female founders, but having diverse VC teams enables us to make better and more diverse investments which strengthens the ecosystem for stakeholders across the industry. 

How would you weigh the participation of women in the African VC and startup scene currently and what are the possible impediments that need dismantling?

Andreata: TLcom has been in the African tech ecosystem for well over a decade, and we have seen some growth in the absolute number of female founders as well as female VCs.

However, the proportion of women in the ecosystem has remained stagnant and we still have a significant gap when you look at the capital raised by female founders.

We’ve heard many female founders on the continent mention they’re over-mentored and underfunded and as a result, it’s vital that investors not only establish initiatives to support the ecosystem but also invest.

With this in mind, we’re intentional at TLcom about committing our TIDE Africa Fund II to target female founders alongside all entrepreneurs at seed and Series A stages but also collaborating with FirstCheck Africa at the pre-seed stage to ensure the pipeline of opportunities remains robust and inclusive. 

In terms of the demographics of fund management teams in Africa, a Disrupt Africa report noted that 40% of VCs investing in African startups between 2022 and 2023 had at least one female founder, partner, GP or Managing Partner.

While this is quite diverse, especially in comparison to the rest of the world, the question to dig deeper into is – how much capital do they have available to invest as many are still fundraising?

We’re getting to a position where a good proportion of the fund allocators have an awareness of the challenges female founders face and whilst there are still hurdles to overcome, this is a step in the right direction. 

How does TLcom Capital actively foster gender equality in the tech investment landscape, and what impact have these initiatives had on women-led startups?

Andreata: At TLcom, our dedication to fostering gender equality isn’t just a corporate initiative; it’s a reflection of our DNA as a company. With 60% of our partners being female and a majority of women on our investment committee, we’ve organically cultivated a diverse network that allows us to better support female founders and engage with the broader ecosystem.

Over the years, we’ve taken concrete steps to nurture this commitment. Our annual female founder summit, now in its fifth year, has become the largest annual gathering of women in tech across the continent, establishing a vital network for female entrepreneurs to benefit from the power of community and collaboration.

Our investment portfolio tells a similar story. From Okra to Pula, we’ve backed some of Africa’s most promising female-led startups, recognizing the massive potential and talent they bring to the table. As we move forward, we’re doubling down on our existing work to date, especially in terms of tackling the funding gap, which was demonstrated by our co-investment commitment to FirstCheck Africa’s debut fund.

As a firm, we’re well aware the gender diversity problem is not an issue which will be solved overnight; however, we’re fully focused on driving real change and establishing a more inclusive ecosystem where everyone has equal opportunities to succeed. 

As a woman in a leadership role in venture capital, what unique perspectives or contributions do you believe women bring to the VC landscape, and how can the industry further encourage diversity in its ranks?

Andreata: The equal participation of women in VC and in every part of the economy results in a net benefit in society. Any society that is neglecting or not adequately leveraging the talents, gifts, and knowledge of half its population is not operating at its full potential.

In VC, more female participation ensures that the investment decisions being made are more rounded, as they bring diverse and relevant views which results in better decisions.

Fewer women in VC as decision-makers create two key problems for female founders – firstly, a lack of understanding amongst investors of female entrepreneurs building “female-perspective” businesses, and secondly, a large majority of investor deal pipelines often sourced from other male-heavy investor networks.

The way to encourage more women’s participation in VC is to be intentional. A lot of research has been conducted that shows diverse fund management teams have higher returns. VC firms need to be intentional about how they hire and the diversity of the talent pipeline, the culture they create within their firms to retain and grow diverse talent. And finally, organisations need to hold themself accountable – what gets measured is what gets done! 

How does TLcom Capital actively work to increase the representation of women in leadership roles within the startups it invests in, and what impact does this have on the overall success of these companies?

Andreata: To increase representation of women in leadership roles within startups, the first thing that TLcom does is to raise awareness of the gender gaps and the benefits that a diverse team can bring to a company.

As you can imagine and to be expected, most startup founders are focused on getting to product market fit, acquiring clients, and ensuring they have the capital to scale their business, so it’s helpful to have someone flag the need to think about how to incorporate diversity as you build your organisation.

Additionally, because TLcom is a majority-women partner team, we can bring female representation at the board level of our portfolio companies. Most companies have women either as employees, partners, suppliers, or clients, so having a C-level that lacks women representation is a significant blind spot for a company.

Diverse teams working in an environment intentionally structured for them to thrive creates significant value for a company and its culture. A company’s people are its biggest asset.