Perspectives Series – Portraits of venture capital investors: #1 Sylvain Carle, Executive Director of CIVIC

In 2022, a Canadian government study revealed that only 4% of venture capital funds support women-led businesses. However, investing in these businesses could add $150 billion to Canada’s GDP by 2026.

To change the situation, we must collectively dismantle the prejudices faced by these entrepreneurs and adopt practices that make venture capital investment theses more inclusive.

Our community of practice, made up of investors and experts, was created to address these issues.

We met with Sylvain Carle, a member of the community of practice and executive director of CIVIC, a non-profit organization whose mission is to support impact investors in developing and improving their practices.

Yes, absolutely. They face cultural biases, particularly regarding the “ideal” composition of a company’s management team as perceived by venture capital firms, which tends to be male because it is seen as more effective and less risky.

At least, that is the traditional view in the financial world…

Furthermore, there is a severe lack of data on women entrepreneurs:

How many are in business?

How many of them have successfully completed their investment rounds?

Historically, the only data we have is based on completed rounds, which are mostly for companies run by men. This inevitably introduces a reinforcement bias that needs to be deconstructed.

Not only that, but it is indeed a large part of our questioning today.

For example, a few years ago, with Innovobot (an innovation and investment platform that encourages innovation addressing major social, industrial, and environmental challenges), our goal was to have 50% of our investments allocated to companies with women in management.

We looked at this goal by asking ourselves two key questions:

Can we identify criteria at different stages of our selection and investment process to choose more companies founded or run by women entrepreneurs?

How can we develop this process in detail: what figures should we base it on, at what stage, and why?

This discussion, which I thought would take two hours, actually took us two months. When we started looking for references to determine our targets, that’s when we realized how little data was available.

I had also encountered this same issue at FounderFuel, a Real Ventures accelerator, about ten years ago.

We wanted to know how many women entrepreneurs were founders, co-founders, or heads of the companies we had supported.

And we were unable to find these figures because no one had deemed it important to include this field in our database.

The conclusion I drew from this is that it is crucial to have quantitative data on this distinct category of entrepreneurs in order to deconstruct the biases associated with it and better integrate the gender perspective into our investment theses.

First of all, it seemed obvious that we absolutely had to deconstruct the biases I mentioned earlier, right from the start of the investment process.

In fact, on a personal level, it was the group discussions during our meetings that really helped me confront some of the fairly strong biases we had within my team.

For example, we still see today that few women study STEM subjects, and therefore even fewer join deep tech start-ups.

But these figures should not hold us back: on the contrary, they should encourage us to set ambitious goals to increase the proportion of women in management positions at these companies that receive funding.

To change a systemic issue, we have to start somewhere and accept that it will require additional effort.

Next, I think that establishing standards and models, staying in touch with the entire 2X Global* community—which is a great international reference framework—and sharing our professional experiences are essential for dismantling our preconceived notions and the practices we put in place.

So beyond this collective intelligence, we gain valuable time to go further and ask ourselves what data the ecosystem needs to collect in order to reduce this gender gap.

*The first 2X Challenge was launched at the 2018 G7 Summit in Canada as a bold commitment by multilateral and development financial institutions to invest in companies founded, co-founded, or led by women.

I think investment funds need to work more upstream with incubators, accelerators, and groups such as MAIN among others, which have this information on the companies they support and on those that apply to their programs (even if they are not selected).

Then we could continue to circulate this data among investment funds, because I believe there is a genuine desire to collaborate and a collective desire to improve.

For me, the discussions I have had with other investors on all the practical aspects of implementing investment with a gender perspective have been truly invaluable.

This series of articles shares the insights and lessons learned by our Investor Perspectives community of practice on the gender perspective in venture capital investment.

This community was launched to complement our Perspectives Entrepreneures program.