Women are the secret ingredient in Latin America’s outsized returns

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Read the first part of this article, “Latin America takes the global lead in VC directed to female co-founders,” on TechCrunch.


Latin America lags when it comes to female investors

Interestingly, these positive numbers for Latin America come in spite of a lack of female investing partners in Latin America.

New data shows that only 7% of VCs with check-writing ability in Latin America are women. This is just over half the current U.S. average of 12%.

See the full data set here.

This is a critical finding, given that studies indicate that investments in female founded or co-founded teams increase when more women sit across the table as investors.

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Specifically, 2019 research shows that women invest in female entrepreneurs at nearly three times the rate of male investors .

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This means that Latin America could be on the early side of a positive cycle. In other words, more female investors in Latin America would lead to more female co-founders, and faster exits at higher valuations.

Other parts of the world have seen the effects of this positive cycle. Sophia Bendz, a partner at leading European VC

Atomico

, has watched this happen: “I’ve seen first-hand the impact having female investment partners can have on increasing the amount of investment into female-led companies.”