Looking to build a bridge over the technology industry’s (and the technology investment industry more specifically) chasm-sized gender gap, a group of successful women entrepreneurs, investors, and corporate executives have launched Female Funders — a site dedicated to providing women with the tools they need to begin angel investing.
The site’s launch comes with a challenge (and a hashtag — #FemaleFunders1000) that the group is issuing to women across the country to encourage them to start making angel investments.
They’ve set a goal of calling 1,000 new female angels to the negotiating table to make their initial angel investments. According to a report that the group cites from Forbes, only 20% of angel investors are women — and when the list of angel investors is narrowed to only technology angels, that number drops even further. AngelList reported recently that only 9% of their registered investors are women.
Female Funders is the brainchild of Katherine Hague, who sold her first company, ShopLocket, to PCH last year at the age of 23. Now she’s the VP of Community Engagement and Hackathons for PCH.
While eventually signing up big investors like Peter Thiel’s Valar Ventures, Rho Canada and a handful of other VCs and angels, ShopLocket began with a small $10,000 angel investment, Hague says.
“Getting women to angel invest is more than just about equality. More women angel investing will mean more funded female-led companies — if for no other reason than because similarity biases tend to attract us to people like us,” says Hague. “Forbes reported that only 5% of venture capital funding goes to women led businesses, which is crazy considering the number of studies that show women-led businesses actually perform better.”
Organizations like Women 2.0 have even more depressing statistics on their site. Historically women-led companies have received less than 9% of all venture capital investments. In tech startups only 4% of firms had women in senior technical positions and only 10% of firms had a woman chief executive, president, or founder, according to the organization’s website.
Historically women-led companies have received less than 9% of all venture capital investments. In tech startups only 4% of firms had women in senior technical positions and only 10% of firms had a woman chief executive, president, or founder, according to the organization’s website.
Still, the numbers are improving with women-owned ventures totaling 12.9% of startups in 2014, up from 8.7% in 2005. And the women behind Female Funders think that with a bit of encouragement, those numbers could be even better.
Most women, according to Hague, believe that they can’t make angel investments because they don’t have the money, time, skill-set, backgrounds or risk appetite to do the deals.
And most women, she says, are wrong.
The Female Funders group says that accredited angels can begin investing on AngelList with as little as $1,000… or investors can join syndicates of investors led by angels like Barbara Cochoran, Tim Ferriss, or AngelList founder Naval Ravikant.
The demographics of angels are changing as well. Angels are getting younger with 75% under 55, and most make between $60,000 and $100,000, according to Virgin Entrepreneur.
Even before its launch today, the Female Funders group has been rolling up recruits. Rachel Ma and Nicole Nerkindt are just two professionals whose journey into the world of angel investments and investing will be followed in a series called “Angels in Training“.
Meanwhile famous names in the investment world like Joanne Wilson, Esther Dyson, and Cyan Banister are giving their time to the project.
There are also female founder-focused angel groups like Broadway Angels and Golden Seeds that Hague says are also a great place to start. There are also more traditional (not female focused) angel groups like NYC Angels and Sandhill Angels that have great reputations.
Beyond that, AngelList syndicates are a great way to start. Join the syndicate of your favourite investor, follow their investments, and invest alongside them with investments starting as small as $1000, says Hague. Future Investor also has a great free course on angel investment online for those wanting to learn more before taking the plunge.
Meanwhile, it’s important for new investors to note that angel investments are inherently incredibly risky (translation: unless you diversify you are likely to lose a bunch of money). So the group advises that women should only make investments if they’re willing, and able, to handle the losses.
But there are also attendant rewards that extend far beyond money. The group quotes Esther Dyson, who is one of the most active investors on AngelList, saying: “The reason to invest is not to be an investor, but because you think this is a good idea and someone should make it happen. I invest in things that would not exist without me or some small group of investors, I invest in things that I think are worthwhile.”