The Real Unicorns Are Female Angel Investors

Despite the attention over the past year, the lack of diversity in tech — both in race and gender — has not markedly changed. Only 3 percent of tech CEOs are women, and just 15 percent of startups have at least one female founder.

Most agree that something needs to be done, but much of the attention is misplaced into a caricature. You see the issue raised on SNL and the other late-night shows — and then there is the hyperbole that penetrates into pop culture (see HBO’s Silicon Valley).

To be fair, programs have popped up to teach women how to code, while others drive awareness of the developer career path for adolescent teen girls. Even some VCs have developed funds for women or minority-owned startups — Golden Seeds and 500 Startups among them.

What’s missing in these solutions? The role of women as angel investors — not just founders or developers.

Women make up just 4 percent of venture capital partners. And though the University of New Hampshire’s Center for Venture Research said there are more than 50,000 female angel investors, my experience from raising $1.2 million in seed funding in Chicago suggests otherwise. I sought a female angel — but could not find her. I asked all of the contacts I met for a recommendation. They all said, “I’ll think about it,” but never got back to me. I do have one female investor, who I am thankful for, but even she backed us alongside her husband.

To get more women in tech today, we need women investors.

Women investors are important because they signal to women You belong here. In a study co-authored by MIT economist Esther Duflo, she saw that an increased presence and visibility of female politicians in local government raises the academic performance and career aspirations of young women in India. “[MM1] We think this is due to a role-model effect: Seeing women in charge persuaded parents and teens that women can run things, and increased their ambitions,” said Duflo, a co-founder of MIT’s Abdul Latif Jameel Poverty Action Lab.

To get more women in tech today, we need women investors — and we need them early in the process. That means female angel investors.

Progress is being made. Over the past decade, women have begun taking more leadership roles in business. As a result, women are excelling financially. The number of wealthy women in the U.S. is growing twice as fast as the number of wealthy men. And by the next generation (or perhaps sooner), more families will be supported by woman than men.

But more wealth will not automatically translate to more angel investors. Women tend to be more conservative investors that may even lack confidence, a critical element in becoming an angel.

We haven’t yet tapped into that next wave of female angels.

That’s why groups like 37 Angels and Broadway Angels — groups of women angel investors who fund early stage startups regardless of the founder’s gender — are critical. 37 Angels, for example, requires its members to be active investors, making at least one $25,000 investment each year from the 35 to 50 companies it finalizes as candidates each year.

But as great as those networks are, they don’t do much to drive awareness of angel investing and teach women to make the leap from investing in stocks and mutual funds to investing in early stage startups. The Pipeline Fellowship is one group that is trying to make a difference with a six-month angel investing bootcamp. And in four years, Pipeline boasts more than 100 graduates — it’s a start, but not nearly enough to make a dent in the deficit of women angel investors.

We haven’t yet tapped into that next wave of female angels — the ones currently succeeding in Corporate America. If that happened, we would see more female founders.