Why We Need More Women Investors
Welcome to part six of Your Moment of Ambition a 20-part series brought to you by KoMedia Inc, and written by staff writer Kylie Adair. This series dives into the daily realities for women entrepreneurs and can land in your inbox every Tuesday at 9 am via our newsletter.
Natalia Oberti Noguera has been in the investing game for years, and she’s noticed something a bit backwards about male-dominated investors’ meetings.
“I attended this meeting of an angel group and they were deciding whether or not to invest in a specific start-up, and there were about 22 people in the room. Two of them were women, including myself, and two of them were people of colour, including myself,” Natalia says. “And they were going around the room, talking about whether or not to fund the company… and each one said something along the lines of ‘Well my girlfriend and her friends think such and such,’ or ‘My wife and her friends think such and such’. And it was such a visible tangible example that the women’s expertise, the women’s knowledge, the women’s contacts, the women’s relationships, all that stuff was in the room, the only people not in the room were the women themselves.”
So she made it her mission to bridge that gap — to make sure the corporate world hears and involves women’s perspectives first-hand. She founded the Pipeline Angels, “a network of women investors that’s changing the face of angel investing and creating capital for women social entrepreneurs.”
The face of angel investing currently being overwhelmingly male and white. According to the Centre for Venture Research, in 2014, only 26 percent of angel investors were women, and just 8 percent were non-white.
And when you look at venture capitalists, the numbers are even worse. In February 2014, Fortune looked into how many women are partner-level investors in VC firms in the US. The grand total? Women make up just 4 percent.
Thankfully, there are women who are working to change this. The Helm is a new women-centric fund and community of female investors that focuses on investing as a tool for gender equality.
Katherine Hague is another woman working to change the narrative for female investors. At just 21-years-old, she founded her first company, ShopLocket, with a $10k investment from angel investor Heather Payne (who also happens to be the founder of Ladies Learning Code and a powerhouse woman herself).
Two years later, at age 23, Katherine sold ShopLocket at became an angel investor.
“Since then I’ve dedicated much of my time to helping other female CEOs raise money and grow their businesses,” she says. “I owe so much to my first angel, and I’m on a mission to help others experience the magic of angel investment.”
And she has her work cut out for her: Research shows that women-led businesses only receive 2.7 percent of venture capital.
Why? Similarity bias — the concept that investors tend to favour founders who look and act similar to them. And that’s a huge problem when the majority of investors are white men.
“Frankly, for almost anyone, when they ask me why I launched (Pipeline Angels), I just simply say there are enough white guys investing in other white guys and we need to engage more women and people of color to invest in women and people of color entrepreneurs,” Natalia says.
But many women, likely in part because they have very few role models to look to in the field, don’t consider investing as a viable career. That’s a shame, though, considering women have something to offer as investors that their male counterparts often don’t, Natalia says.
“In addition to financial capital it’s also the human capital and the social capital that someone can bring to the table and offer an entrepreneur,” she says. “So whether it’s human capital in terms of the experience and social capital in terms of contacts and relationships and networks, and so being provocative, a lot of women already are doing two of those — and what’s it called? It’s called community service, it’s called volunteering.”
That’s why she encourages women to “add that third piece, the financial capital.”
Not to mention that there are many high net-worth women who are already contributing capital to the causes they believe in through donations, so she wants to bridge that gap between philanthropy and investing.
“We all want to change the world in different ways, and angel investing is one way you can put your time and money behind making the change you want to see in the world,” says Katherine.
And on an individual level, women are largely missing out on what can be an incredibly rewarding career.
“I’ve learned about new industries, built my professional and personal network, and had the opportunity to see how various businesses work behind the curtain. Angel investment has been the best professional development course I have ever taken,” says Katherine. “Would you spend $10K on a professional development course that could change your career?”