Angel investors are predominantly male. But there has been a shift over the past decade. There are more and more female angel investors joining the ranks. And that could mean more opportunities for your business too.
In a post she wrote for Forbes, angel investor Marianne Hudson explains:
“As a woman angel investor, I am excited to see more women in our field. For all investors, the smart women investors are expanding the diversity of deal flow and funded companies. For the entrepreneurs they fund – many of the businesses will grow and create great returns because of the added funding and diversity of advice provided by these women. That’s a win for everyone.”
Hudson states that today an estimated 22 percent of current angel investors are female. That isn’t an overwhelming number, but it is up from about eight percent in 2005. And that represents a pretty significant increase over the past decade, even though women still have a long way to go.
Still, the growing number of female angel investors has a ripple effect, says Hudson. More female angel investors means more potential investment dollars for all entrepreneurs. And the increasing visibility they are enjoying will likely encourage more women investors to get involved.
What does this mean for businesses that are looking to secure some angel funding? Males still control the majority of angel funding available. But entrepreneurs should be mindful of the change happening.
So if you have a pitch that’s aimed specifically at the typical male investor, you might want to rethink it. Consider the possibilities presented by a growing pool of women angel investors too. It means more options to get your business funded. And it could also mean more effective guidance and advice from an increasingly more diverse angel community.
For example, women make up half of the consumer base. So if your business plans to sell products or services to women, wouldn’t it be helpful to have investors that understand that demographic?
Female angel investors can offer expertise and insights about businesses and consumers that differ from those of their male counterparts. Depending on the type of startup, this unique expertise could be invaluable.
Investor image via Shutterstock
Aira Bongco
I don’t think that a distinction should be made between male and female but I still agree that women somehow care more about the things they invest on while men somehow see it as an experiment and move on if it doesn’t work.
Annie Pilon
I’m not sure if there’s always a huge difference in their strategies, but if you’re a company that targets female customers then I think it could be valuable to have female investors who understand the market and the product.