“I was the only woman in the room,” says Sarah Turner. “It was a very boisterous, alpha-male environment.”
As co-founder and CEO of Angel Academe, Turner is an advocate for angel syndicates, not least because they provide a means to invest in young companies without necessarily requiring individuals to commit eye-wateringly large amounts of capital. Her own experience suggests, however, that male-dominated syndicates can be daunting environments for women to step into.
That very possibly applies not just to female investors but also to founders. As Turner sees it, women pitching to male angels often have – and not in a good way – a different experience to their male counterparts.
“When female founders come to syndicate groups, they tend to be asked different questions,” says Turner. “Men will be asked promotional questions. Women will be asked preventative questions.”
To put it another way, a panel of angels may ask a male entrepreneur about the opportunities he sees for the business and how he intends to move forward. A woman, on the other hand, could be be faced with questions centering around how she intends to deal with the difficulties that lie ahead. She may even be asked how she’ll deal with juggling childcare and running a company, even if she is neither pregnant nor a mother at that point. Does this make a difference to the outcome? Well, according to British Business Bank data, only around 1 pence in every pound of capital investment goes to businesses with women at the helm.
It was against this backdrop that Turner – herself an entrepreneur and co-founder of digital consultancy Turner Hopkins – decided to establish an angel syndicate that would be dominated by female investors. Thus, Angel Academe was born.
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The Culture Question
One of the main aims of the syndicate is to encourage more women to become investors. And as Turner explains, there is potentially a lot of capital to unlock. “Women own 48 percent of the wealth in the U.K. and that is set to increase,” she says.
As Turner sees it, the relatively low levels of angel investment by women can’t be put down to a lack of cash. “The barrier to investment is cultural,” she says. “Angel finance is dominated by men and it doesn’t get onto women’s radar.”
Angel Academe is not solely comprised of female investors – there are men in the syndicate, including Turner’s business partner Simon Hopkins. However, women are in the majority and a decision was taken at the outset to focus investment on female-founded companies. So far, 35 deals have been struck with the companies concerned raising a total of £68 million.
Aside from the fact that 70 percent of its members are women, the profile of Angel Academe members it not totally dissimilar to those of other syndicates. “Our members are typically entrepreneurs or senior leaders,” says Turner. “Some are keeping busy during retirement.
There is quite a bit of diversity in the sectors from which members are drawn and this is reflected in the investments made. “Diversity is one of our strengths. Our members are familiar with a lot of different sectors.” Overall, though, the focus is on tech companies with growth prospects.
In terms of presenting prospects to members, the process is also a familiar one. The management team identify likely investee businesses and carry out due diligence. Those who make it through are presented to members at pitch events. Each member is free to make individual investment choices.
Perhaps the biggest point of difference, then, is the combination of female founders pitching to mostly female investors. This provides an opportunity to remove some of the inherent bias that can come into play when women present to men.
Removing The Bias
This bias arguably goes beyond the promotion vs prevention issue cited earlier. In writing for this column I’ve spoken to quite a few female founders who have developed products or services aimed at women that – to say the least – don’t capture the imagination of male investors. That’s often because men don’t see a need for a product that a female investor might instantly recognize as useful. So, arguably, gender diversity among investors will be beneficial to founders working in areas such as femtech – sectors where male investors may not recognise either problem or solution.
There is evidence to suggest that female investors are more likely than their male counterparts to commit cash to companies run by women. For instance, a study carried out by Seth C Oranburg and Mark Geiger of the University of Duquesne found that out of a sample group, 40.8 percent of investments by women were directed at female-led companies as compared to a 14.6 percent reading for men.
As Turner acknowledges, Angel Academe has something to prove. “We want to see a big exit,” she says. “That would prove the point that female-led syndicates make good investment choices.” Another goal is to expand the number of members, all the time bringing more women on board.
Angel Academe is not alone in promoting angel investment for females. The U.K. Business Angels Association (UKBAA) has also been campaigning hard to encourage more women into angel syndicates.
Ultimately this could make a difference, not just increasing the number of women who are prepared to back small companies, but also in creating an investor pool that is receptive to a wider range of business ideas.