When Susan Preston co-founded the all-women angel investment group Seraph Capital Forum in 1999, it was the only one of its kind – not only in Seattle but nationwide.
Now, she said, there are about 25 angel groups that have only women members or fund women-led ventures. Nationally, about a quarter of all angel investors are women. In 2015, women represented 25.3 percent of the angel market, down slightly from 26.1 percent in 2014, according to the Center for Venture Research at the University of New Hampshire.
While there are no numbers for the Seattle area, local investors and entrepreneurs say they have seen an increase in the number of women getting into early-stage investing. Many are coming from technology companies where they’ve earned incomes to qualify as accredited investors, a requirement for angel investing.
An accredited investor must earn more than $200,000, or $300,000 with a spouse, in each of the previous two years, or have a net worth of more than $1 million, excluding the value of a primary residence, according to the Securities and Exchange Commission.
“In the Seattle area here, I’m seeing more women join the Seattle Angel Fund, which I’m delighted about,” said Preston, who manages the fund and is herself a well-respected angel investor. “I want to keep that trend going.”
Role models and mentoring
The Seattle-based Alliance of Angels, one of the largest angel networks in the Pacific Northwest, has 38 female angel investors out of a membership of 140, said its managing director, Yi-Jian Ngo.
“A lack of role models have deterred women in the past,” he said. “Lately, we have more women involved in mentoring female investors in particular.”
And there are more training opportunities, said Preston who has taught full-day investment orientations for Pipeline Angels, a New York-based network of new and seasoned female investors. The group now holds boot camps for would-be investors and pitch summits for startups in Seattle. It has a local cohort composed of Pipeline Fellowship graduates.
“Women have a tendency to want to learn about something before they do it,” Preston said. “Programs like these are really great in getting women, particularly women of color, more engaged in the angel investing process.”
Connections and networking
After nearly 30 years of running her own marketing consulting business, Nellie Fujii Anderson was inspired after reading an article about Pipeline Angels to enroll in the first Fellowship investor training program in Seattle in 2014.
“This just fit the bill because I really was looking for a way to have a place at the table,” she said. “I want to be represented. I want to speak up for the voices that don’t have a chance to do that. I want to encourage startup businesses and help them in any way I can.”
Anderson became an inaugural member of the Seattle Pipeline Angels cohort and has gone on to mentor and invest in companies launched by diverse founders.
“It’s not like I have a whole ton of money,” she said. “But, fortunately, I have experience and a network and connections. I really can add some stuff to the conversation here. I have pursued other angel investments, but I definitely seek out startup companies that might need my help.”
Angel investing definitely gets you heard, said Heather Redman, a prominent angel investor and executive at Indix Corporation. She has also, according to Yi-Jian Ngo, been very involved in getting other women into angel financing.
“I get asked all the time by male investors for my opinion on companies that they think of as being female-oriented, and typically these will have female co-founders if not fully female teams,” Redman said. “Not only am I more willing to look at women-founded companies, I’m also able to lead other people in that direction who wouldn’t otherwise feel comfortable with their own evaluation of the product or founder.”
Angel investing also provides a level of visibility people don’t get from putting money into stocks and bonds, she said.
“I think angel investing is one of the most potent things you can do for your career, full stop. It’s been frustrating to me that more women don’t realize that angel investing is not only a great investment from an asset allocation point of view, but is also beneficial to their stature in the commercial world.”
Jumping right in
Redman, however, is not a big advocate of investment training programs and instead encourages women to “jump in with both feet.” She advises women interested in angel financing to “find people who are smart and learn from them as you’re actually writing checks.”
Investing small amounts as part of a larger women’s investment group doesn’t teach you enough, Redman said. “Where you learn is by investing with the big boys, which I mean literally.”
The key things, she added, are having enough capital, a willingness to diversify and patience. “You shouldn’t be writing more than a few checks a year, so it’s going to take you 10 years to really get in.”
While female participation in angel investing has increased, Redman considers it still “pretty anemic.” “I’m not seeing enough, and I’m not seeing enough women getting involved as limited partners in funds around town. There are women who have the wealth to be LPs but don’t think of themselves in that way.”