Women investors push for higher stakes

Good Empire is among the dozens of startups that raise money on equity crowdfunding site Birchal.

The company is developing a social app that will allow users to take up and share activities - such as Earth Hour or Ice Bucket challenge - that are aligned with a United Nations blueprint to achieve a better and more sustainable world. It hopes to tap into a growing corporate social responsibility market.

This week, it went into a fundraising round. Like most startups, it expected most investors would typically be older, wealthy and male. Instead and to its surprise, it overshot the target - raising more than $650,000 while nearly 60 per cent of its investors were women.

"What we're seeing is even with less money than our male counterparts, women still come forward, lead and put their money down when they can see something that will change the world for good," chief marketing officer Natasha Ritz says.

While still uncommon, Good Empire's experience is part of a growing trend where women are at the front line when it comes to investment decisions.

They made up only 18 per cent of active investors across Australia, according to a 2020 survey of over 13,000 online investors by research firm Investment Trends.

That put Australia ahead of an established financial market like the UK (11 per cent) but still behind the US (21 per cent).

The gender gap has been narrowing in recent years. In 2019, the proportion of Australian women who invested for the first time had risen to 28 per cent - more than doubling from five years earlier.

Recent research by the Australian Securities Exchange also indicates a demographic shift underway with women and younger investors piling into the stock market.

Women made up 45 per cent of all new investors in the past 12 months, up from 31 per cent five years ago, the study showed. They also accounted for 51 per cent of those intending to start investing in the next 12 months.

"The rise of female participation in Australian share investing has been a positive trend over several years and accelerated by the COVID-19 market shakeup," the ASX said in its report.

Experts point to record low interest rates, the desire to secure the future amid economic uncertainty and technology lowering entry barriers as the main factors encouraging female investors.

The shift is evident in other parts of the financial market. Birchal says about a quarter of businesses that used its crowdfunding platform in 2020 were founded by women and they raised about 25 per cent more than other enterprises.

"Because equity crowdfunding enables founders to sidestep the old guard and raise funds from their most passionate customers and fans ... female founders and the investors that back them are increasingly finding their voice," Birchal noted in its year-end report.

The change is likely for the better too, with the Investment Trends study finding women are more likely to collaborate and discuss ideas, learn from the experience of others and are keener to manage risk.

"Men look at how to drive revenue, grow the business, increase wealth. Women want to invest in something that can make real change and be part of a social movement," Good Empire's Ms Ritz says.