The women investing in other women’s ideas
A new network is making sure more capital is available to all-female teams, says Helen Chandler-wilde
When Maria Scott, founder of Taina, a company providing automated technology platforms to financial institutions, was starting her business, she found that the pool of interested investors – largely male – had some rather outdated views on female entrepreneurs. “I had an experience early on with a very traditional gent whose wife never worked,” she remembers: “He said to me ‘Why are you doing this? Are you bored?’ He was implying that it was a hobby for me, like yoga. I hadn’t had a spare minute for four years – it’s not a hobby.”
Many women entrepreneurs will have an experience like this, given that just 14 per cent of angel investors are female. These maleheavy pitching rooms see just one per cent of available capital going to all-female teams, compared with the 89 per cent given to all-male ones, according to the British Business Bank. It’s a one-sided approach that doesn’t do businesses any good either: companies with female leaders were found to deliver twice as much revenue per dollar of investment, in a study by Boston Consulting Group.
Now, female investors and entrepreneurs are joining forces to bridge the gap. Angel Academe is a network of investors, almost all female, who get together to offer funding to tech businesses with at least one female founder. It was founded by Sarah Turner in 2014, inspired by her experience of London angel networks, which provide investment and support at the early stage of a business.
“Often, I was the only woman in the room,” she says. “Culturally, it was extremely male. It’s something men have typically done, then they talk to other men about it, so it becomes quite an old boys’ network. This works for male entrepreneurs, but not for women.”
Turner says the atmosphere could, therefore, be difficult when female entrepreneurs came to state their case. “It was uncomfortable, and it wasn’t that they were pitching typically female businesses. [The investors] just didn’t understand them as people.”
Research bears this out: investors rate women’s pitches less favourably than a man’s, even when they’re delivering exactly the same material, found a 2014 study by Harvard Business School, the Wharton School and MIT. The effect is even more pronounced when the presentation is delivered by a man judged to be physically attractive.
Part of the hurdle is encouraging women to come forward as angel investors in the first place, Turner says, which is not helped by the often opaque nature of the finance side of start-ups. Angel Academe runs workshops for new investors to clarify the process and make it more accessible to a wider group of people.
Tamara Gillan runs Cherry London, a PR firm. After experiencing first-hand the obstacles placed in female entrepreneurs’ way, she now invests in other female founders, and set up Wealthiher, a network that connects women investors.
She has found that female founders are often much more humble than their male
counterparts, as well as being more likely to undervalue their businesses when they go into the pitch room. “Women are not good at valuing themselves, their business or the return they will get from the investment,” she says. “When I’ve sought investment, I’ve not gone for the maximum value.”
Women being too modest can play into existing stereotypes, conscious or not, that investors have about female entrepreneurs. The language of venture capitalists belies their biases, according to a 2017 study in the
Harvard Business Review, which found that young male entrepreneurs were seen as “promising”, but young female entrepreneurs were called “inexperienced”. Men were praised for being aggressive and arrogant, but venture capitalists instead focused on women’s emotions.
Turner does think that there could be differences in how men and women set up and run businesses, but that current stereotypes are tired. “I’ve been in rooms where men are very impulsive – they like an entrepreneur so they literally make the decision there and then,” she says. “I think the thoroughness that women bring makes us good investors.”
Scott describes her approach to entrepreneurship along similar lines. “We always think we’re not sufficiently knowledgeable to do something,” she says of her female counterparts. She describes how she fell into the same trap: after working for 15 years in law, she still felt she had to do a two-year MBA before being confident enough to set up a business. “I find a lot of women in my position tend to think they need more qualifications than they do.”
Taina is largely supported by two female investors, Joo Hee Lee and Vin Murria, who won a prize from the UK Business Angels Association (UKBAA) for their support. “I asked if from the goodness of [Murria’s] heart she would help me,” Scott remembers. “They get an equity stake in the business, but mostly it’s not incentivised by money. They have been very successful in their own right. What incentivises them is giving back, seeing something grow under their watch.”
She didn’t get their help through traditional means. Lee and Scott met when living near each other and steadily became friends, before then working together.
“I was always going to invest, because she’s one of my best friends and someone I couldn’t respect more,” says Lee. “But she ticks absolutely all the boxes that I would look for in an investment: she has a towering intelligence, she has drive that I have never seen before and I trust her entirely.”
Lee says she expects a healthy return from her contribution, but was also motivated by the belief that her wealth is being put to good use. She has advised Scott when required, and offered up her home as a makeshift office: “In the beginning, she would have conference calls with the States from my flat when her children were sleeping.”
Research commissioned by Wealthiher outlines that female investors care about more than getting the maximum return when it comes to investing: just five per cent of those surveyed said wealth was a mark of success, whereas two thirds wanted their money to create a benefit for society as a whole. “For men, achieving wealth was an end goal but women want a purpose to their wealth – they want to understand more of the story of the business, they want it to align to their goals,” says Gillan.
And investing in women just makes good business sense for many. “We’ve done several investments in the HR tech space,” says Turner. “Often, the clients will be women, so they value diversity in the clients that they’re buying from. It’s a competitive advantage if you have a diverse founding team and investors.”
Young male entrepreneurs were ‘promising’. Young females were ‘inexperienced’
‘For men, achieving wealth was an end goal but women want a purpose to their wealth’