Female-focused, seed-stage venture capital fund Sandpiper Ventures has closed the first $10 million of a planned $20 million funding round for its flagship SV Fund, with the backers including 30 women and Scotiabank’s Roynat Capital.

Founded last year, Sandpiper now boasts the largest number of individual investors of any Atlantic Canadian VC fund, the fund said in a press release -- a reflection of the fund's focus on attracting investors not normally involved in venture capital. In addition to the businesswomen and Scotiabank, the round’s backers also include startup luminary Gerry Pond, Verschuren Centre namesake Annette Verschuren and Killick Capital President Mark Dobbin.

“Investing in female founders is simply good business,” said Sandpiper Founder and Managing Partner Rhiannon Davies.

“Statistics show that female founders experience greater successes than their male counterparts, but traditional VC doesn’t yet reflect this fact. Sandpiper is disrupting this. The operator-led fund invests in impactful women-led start-ups across tech-enabled companies.” 

San Francisco’s First Round Capital calculates that its portfolio companies run by women produce a return on investment that is fully 63 percent better than its male-led startups.

And Boston Consulting Group estimates that female founders generate 78 cents of revenue for every dollar invested, compared to just 31 cents from male founders.

Entrevestor’s 2020 Startup Data Report concluded that the need for funding targeted at women entrepreneurs is pressing. 

The report estimated that just 3 percent of startup investment in Atlantic Canada went to female entrepreneurs. And that figure is overly optimistic because it omits stock market funding, which accounted for more than a quarter of the $206.2 million raised by startups and went exclusively to men.

Women entrepreneurs raised just $5.3 million in 2020, and $1.2 million of that was money contributed by the founders themselves, according to Entrevestor's data. The $4.1 million that was contributed by outside investors represented less than 2 percent of all equity funding that year. And just $1 million came from venture capitalists.

To raise the rest of the $20 million that Sandpiper is targeting, the firm said in its press release, it will continue to focus on drawing in female funders who are new to the VC landscape.

"We started our fundraising welcoming many investors new to the asset class. It is important to us to recruit more women to venture capital,” said Co-Founder and Managing Partner Cathy Bennett.