An investment firm that works for women
Beacon is a 2X fund
The “2X Challenge” is a commitment by The G7 Development Finance Institutions (DFIs) to collectively mobilise private sector investments in developing country markets to provide women with improved access to opportunities that enhance economic participation and access.
Why Beacon?
Why We Started Beacon
Why do women-owned businesses receive so little funding?
Outright gender bias, limited access to investor networks, few women in decision-making roles at Private Equity and Venture Capital firms – these are some of the issues that have been hotly debated and researched. But while these factors certainly explain part of the problem, we felt that they did not tell the whole story.
So we stepped back and tried to understand the aspirations and needs of female entrepreneurs – and got into the trenches by investing in 14 women-owned companies over the past 3 years through our Investing in Women Fund. What we learnt was that businesses come in many shapes and sizes, growth profiles, and many incredible entrepreneurs have ambitions which do not include an exit. But right now financing options in our markets are concentrated in predominantly one format: venture capital and private equity. PE/VC funds deployed approximately $8 billion in Southeast Asia in 2019, mainly targeting the same opportunities: “explosive” growth companies, cash-incinerating business models, (often) binary – win or lose – outcomes.
We created Beacon to shine a light on alternative models of entrepreneurial and investing success.
Rather than changing women-owned businesses to fit the system, we believe we can change the system to better meet the needs of female entrepreneurs. In particular, we seek to support moderate growth companies that are currently sidelined by traditional venture capital and private equity firms. While some may be dismissive of these SMEs as ‘lifestyle’ or ‘micro-businesses’, our experience from 10+ years of engaging with entrepreneurs in Southeast Asia has revealed that many of these businesses are in fact profitable, cash-flow positive businesses growing at healthy rates. Because of challenges raising funding from outside investors (due to a wide number of factors, including gender bias, access to collateral etc.), women gravitate to businesses with healthy unit economics where profits can be channelled back into organic growth.
Our Commitment
While changing gender norms and the ‘rules’ of finance may take time, we believe we can start by treating our customers – the entrepreneurs – with respect and making the fundraising process more transparent. We dare to believe it’s possible to turn fundraising from a headache to a delight, or at the very least a process where the entrepreneurs we serve feel empowered and understood.
Beacon is a long-term commitment to changing finance to work better for women-owned businesses. We’re focusing on debt products, because we believe they’re a better fit for the moderate growth, cash-flow positive businesses that we’re targeting. We’ve evolved away from a traditional venture capital fund structure – which forces investors to exit companies within a fixed timeline – and are using an evergreen structure to better fit the time horizon and financing needs of our portfolio companies. Most of all though, we know that we’ll need to remain nimble and keep iterating, to deliver on our underlying mission of being an investment firm that works for women.