Can Women be Angel Investors?

Women make up the fastest growing community of angel investors and it’s changing the face of Angel Capital for the better.

Angel groups like Rockies Venture Club have been beating national averages for investing in women and minority led companies with 54% of our portfolio consisting of women and minority led companies vs a national average of just 14%.  But in order to balance the ecosystem it’s important not just to invest in women led companies, but to engage women angels who can help mentor startups and who can gain experience serving on the board of directors of some of the startups they invest in, thus paving the way for increasing the number of women on corporate boards at all levels.

Research shows that companies with women on boards out perform those with no or few women.  Companies wit

RVC Women Investor Network

h the highest percentages of women on their boards outperform their less diverse peers by 66%.  We have certainly seen these trends in our portfolio companies and are committed to developing further diversity in our community.

We have launched the RVC Women’s Investors Network  (WIN), led by Barbara Bauer.  The network has had several well-attended events that focus on angel education and making connections.  The group is based on four principles that play on women’s strengths:

Engagement: Programs that allow people to work together and share wisdom of crowds to make good decisions and great investments.

Give Back: WIN members have years of business experience and they want to be more than just a check – they like to mentor and coach up and coming companies.

Act From Knowledge: Women like to understand the landscape before they jump in and invest.  No more “fake it until you make it” – that can cost thousands for new angel investors!

Education: Classes, workshops and “get to know an angel” events provide deep venture capital knowledge to get WIN members up and going quickly and confidently.

If you’re interested in engaging with the group, volunteering, or just learning more, consider attending the WIN Luncheon at the Angel Capital Summit, Tuesday March 21 on the DU Campus.

Click HERE to register

If you’re interested in learning more about Angel Investing and Venture Capital, you should definitely attend the full Angel Capital Summit.  Tuesday-Wednesday March 21-22 in Denver.

Click HERE for more information and to sign up.

Want to learn more about Rockies Venture Club?  Check us out at www.rockiesventureclub.org

RVC’s Portfolio- 55% Female and Minority Led

Rockies Venture Club has funded 14 deals in the past year, bringing its portfolio mix to include 55% companies which are female and minority led vs. the national average of just 14.4%. Read more

3 Ways To Fund Your Start-up

Finding capital is no easy task. Lots of start-ups struggle early on with where to find the capital they need to bring a great product (or service) to market or to tend to a broken technology in need of some work.  Funding Your Dreams: Calling All Entrepreneurs, a panel at this year’s WILD Summit, covered just this.  Once you’ve determined how much capital you need, how do you put together your fundraising strategy?  Who do you ask for funding and are you offering something in return?  What do you need to know before you start? Read more

10.10.10: Helping CEOs Find The Next Problem To Solve

10.10.10 is an innovative program that combines 10 wicked problems, 10 prospective CEOs, and 10 days together in Denver. The bigger the problems the bigger the opportunities, and they’re intent on finding the most massive problems out there and empowering CEOs to create solutions. The first program launches in August, 2014 and is the first of its kind. Read more

Biz Girls 2013 Recap

 

BizGirls CampEvery year Biz Girls gets better and better.  We’ve evolved from the first year’s amazement that the girls could actually complete the program and get their companies live within the tight time limits of the program to this year’s re-branding of the program from “Biz Girls Camp” to “Biz Girls CEO Development Program.”

While the Biz Girls CEO Development Program works on the same values and principles as the “camp”, we’ve raised the bar on what is expected of the girls – and interestingly – they have raised the bar on what is expected of us.  In response to this, we implemented three new parts of the program this year.  We couldn’t have done this without the volunteer effort of Louise Campbell-Blair, who joined us as Biz Girls’ CMO to get our marketing program in place, but who ended up doing much, much more.  The three new programs include a Mentorship program, advanced workshops and sponsorships to help with tuition, allowing us to achieve our diversity goals.

Mentorship Program:  Each girl is given the option to have a mentor who will work with them after the program has completed.  In the past we’ve had challenges with getting continuity and providing a way for the girls to continue their businesses on into the school year.  We’re hoping that by providing a mentor who can give advice, help set realistic goals and monitor progress, will improve the chances that these young companies will continue to grow and thrive well after the summer ends.

Advanced Sessions in Web Design, Pitch Development and SEO.  This year we brought in a number of experts who helped by offering afternoon programs on three of the program days with advanced sessions covering web design, pitch development and marketing the web sites.  The results were amazing.  The pitches this year were great and included full powerpoint presentations.  The web sites were much more sophisticated and filled out with graphics and logos, especially in Boulder where the girls decided in their strategic plan that developing logos was important to them.  And finally, the SEO worked better than anyone had expected with Rachel from casetaste.com getting her first order the day after the program ended!  Rachel ended up on a CBS TV program as a result of her success!

Finally, we added a program for donors to sponsor a Biz Girl.  This was a tremendous success as it allowed us to pursue our objectives for diversity and make sure that no girl was denied a spot in the program because of an inability to come up with the tuition.  Thanks so much to the generous individuals who supported these girls!

For those of you who haven’t been involved, here’s a summary of the companies that we formed this year:

Denver:

Casetaste.com
Denverdusting.com
Tealpoppies.com
Tenniscoachfinder.com
Upcyclethreads.com
Boulder:
Writerslam.com
Bocodesigns.com
hannimals.com
inspiralook.com
fandomcentral.com

Women investors far from risk averse

Women investors are under-represented in private equity investment and folks are starting to notice. This month the Harvard Business Review posted an article by Sarah Granger about women in angel investing. She notes that there are a number of groups and organizations devoted to getting women more involved. She discusses Pipeline, Golden Seeds, Astia, 500 Startups that are all either entirely focused on women investing and advising or are well-balanced in their gender diversity. That’s great, but it’s rather sad when an organization is newsworthy because they are gender diverse.

The fact is that very few investing/advising groups are gender diverse. This is true in VC firms and also among angel investors playing with their own cash. The Kauffman Foundation has put together a white paper about all about it.

One explanation that I’ve heard many times is that women are too risk averse for private equity and this is why we don’t see more of them in the high tension world we sometimes call “risk capital”. A recent US Trust study of ultra-high net worth individuals found that women are 5% more likely to report feeling nervous while making investment decisions and 8% less likely to feel smart.

Yet, I’m comfortable arguing that risk aversion is not the problem here.

I manage an angel group and I’m a woman. I’ll be the first one to tell you that I get lonely sometimes in investor meetings when I realize that I haven’t seen a woman across the table in what feels like months. I too, have wondered why we don’t have 50% or even 25% women in investor meetings.

At Rockies Venture Club, we have 209 self-identified investors (both angels and VC fund managers) on our mailing list. Only 19 of those are women. A whopping 9% of our investor group is female. Come on ladies, I’m dying out here!

There has been plenty of research that identifies women as wealth holders in the US. In 2005 women held $14 trillion, which was 51.3% of the wealth in the US. By 2007 the value had risen to $19 trillion. Maybe women really are afraid to lose that capital in high-risk early stage investments.

I still don’t think so.

Let me tell you a little about Rockies Venture Club Investor Forum. We are very friendly to the uninitiated accredited investor. In 2012, we did not charge investors a cent to attend meetings, and we don’t require a minimum investment. There is very little barrier to entry to get involved with our group. For a year now, we have had flexible rules to help neophyte investors meet and make friends with experienced investors. In general, the investors who come to the table have made an investment within 6 months. Not ALL of them, mind you. Some are still learning, absorbing, and waiting for their interest to be piqued enough to write the check. But most.

If women are risk averse, then I would expect the women on our list to attend investor meetings and absorb, learn, and wait.

But what really happens is a very different story. RVC women investors don’t behave like you’d expect risk averse people to behave. They invest. Often quickly.

Of the 206 current investors on our mailing list, 44 have attended an investor meeting since August. Eight of those attendees were women. Let me put a finer point on it. I’m saying that over 40% of the women who self-identify as investors on our mailing list physically show up at meetings. The male show-up-rating is only 19%.

It goes farther than that. More than 20% of the women on my list aren’t just showing up to meetings. I know they are ponying up the cash when it comes time to close a round. I don’t have final numbers for the men yet, but using a non-scientific mental survey, I’ll hazard a guess that it’s also around 20%. Roughly, the same percentage of our male and female investors are cutting checks.

Now we aren’t talking about chump change here. Rockies Venture Club Investors have invested at least $6 million this year making us one of the most active angel groups in the country. Final numbers are still coming in and final investments are still closing so the total for 2012 will likely rise closer to $7 or 8 million. Further, we’ve leveraged those dollars so the closed-deal-tally is more than $14.6 million invested in RVC companies this year.

The real difference between the men and women in our group lies in engagement. There are 187 male investors and only 19 female investors who are involved in RVC deeply enough to identify themselves as investors. How many accredited women are on my list who haven’t checked the investor box identifying them (privately) as an investor? Why haven’t they done so?

Frankly, we don’t have enough information to answer that question. They might not know they are legally accredited investors [accreditation means you had an income of $200K last year ($300K if married) and expectations for the same this year OR $1M in assets not including your home].

Some women may choose to invest in a more traditional, public portfolio. Maybe they follow the instructions laid out by their wealth managers who are not allowed to suggest private equity (it’s called ‘selling away’ and it puts wealth managers’ careers at risk). Or perhaps they are giving a substantial amount to non-profit charities for a tax break each year. Maybe fewer women have been involved with start-ups, small business, and fundraising and therefore aren’t even aware of the opportunities of angel investing. I will mention, as a caveat, that some women invest as part of a couple and send their husbands to investor meetings. These women are not being counted in my data since I never see their names on meeting rosters or their faces in the meetings.

One thing is for sure, the women in our group are just as likely to invest at the men. The old standby explanation of risk aversion is simply not describing this scenario. I think it’s time to look deeper to see why women are not engaging in angel communities and private equity at ratios equal to men.

At RVC, we cannot passively allow our investor groups to remain unbalanced. Women make 85% of the purchasing decisions in the US. This accounts for $3.7 trillion in consumer spending and $1.5 trillion in business spending. We run the risk of a disconnect when one demographic is so heavily involved with product purchasing and so uninvolved with the formative years of company development.

To begin balancing the gender scales we have created our own women’s group to invite the female side of our membership to get involved with private equity investing and mentoring. We encourage all accredited investors (even newbees!) to attend an investor meeting and see what we do there. In 2013, we are adding extensive educational content for investors and entrepreneurs to get savvy with private equity investing.