Female investors! You are welcome.

According to EBAN - European Business Angel Network (EBAN, 2022), Angel Capital Association (Huang et al., 2017) and Forbes (Stengel, 2022),?the number of female angel investors registered in organised angel networks is still a minority compared with men, going from a country average of less than 20% in Europe to around 30% in the US.

The barriers that prevent more women from becoming angel investors, identified by research and press articles, are grounded in a soup of unfavourable circumstances, cultural preconceptions and inequalities that still exist in modern developed societies. Besides those barriers is the idea that women (i) have less risk propensity, (ii) lack of investment experience, (iii) have a different agenda (because of social and family compromises), (iv) lack of entrepreneurial background, (v) lack of networking (vi) have less interest in technological areas (vii) and lack of entrepreneurial money to be re-invested (research appoints woman’s money is more likely to come from inherited wealth than previous entrepreneurial exits) (Amatucci, 2016).

The identified barriers sound anchored in the alpha macho culture tending to perpetuate the domination of man in the entrepreneurial and finance world with some curiosities. According to Amatucci (2016), women tend to expect to be invited to angel groups, contrarily men make themselves invited, women, tend to believe they need to know everything about investing before they invest, while men think they already know enough to play the game. Indeed, research from Harvard suggests men apply for a job when they meet 60% of the qualifications, but women apply only if they meet 100% (Mohr, 2014). Is this a question of intellectual honesty? Not necessarily, it relates to risk perception and self-esteem. Some women seem to feel more insecure about investing without seeing a detailed global picture, and alternatively, men may feel confident (or overconfident) to run certain investment risks. Continuing to explore the differences in investment behaviour, women are often understood as being more inclined to (i) invest in a broader range of sectors than technology which is a men preference (ii) women invest in other women 10 times more than men and (iii) invest in businesses with a higher purpose using social impact as part of their decisional criteria (Huang et al., 2017). Research also evidence that the behaviour of female investors in angel groups is more collaborative than men and women are also more open to listening to other angel investors' opinions (Amatucci, 2016). Moreover, female investors favour deeper due diligence and reveal lower tolerance to investment losses.

In a world of genre barriers, accumulated difficulties, and unfavourable cultural investment paradigms, the current situation of female angels represents a challenging opportunity for the angel industry. ?Still, there is an ongoing debate to understand whether female angels should integrate mixed angel groups and guarantee the advantages and complementarity of both genres or whether they should be members of exclusive female angel groups. Maybe the environment, the culture and the style of current groups dominated by men are not attractive for certain women, that feel more comfortable beginning the angel investing adventure learning together with other female pairs.

Female investors reveal a sense of mission to close the entrepreneurial female gap giving female entrepreneurs more opportunities. Also, female investors believe that investing in women has more chances to avoid losses and guarantee higher financial returns. Indeed, the surprising result is that startups headed up by women “are more capital-efficient, achieve 35% higher return on investment, and, when venture-backed, bring in 12% higher revenue than male-owned tech companies” (Garaizer, 2016). Unfortunatelly, research suggests only a minimal part of venture funds (7%) go to startups led by women (Garaizer, 2016), arguing male investors prefer startups pitched by male entrepreneurs compared with pitches made by female entrepreneurs, even when the content of the pitch is the same (Wood et al., 2014).

Fortunately, recent signals are showing female participation in the business angel market is increasing. The media and social networks are giving more attention to the topic, the number of successful female entrepreneurs and high-net-worth women is increasing, more women are taking the lead in angel investment funds and are more opportunities for female learning and training. EBAN advocates that gender equality is more than a social and ethical imperative but also a strategic advantage for businesses and investors and a great deal of energy in the entrepreneurial ecosystem (EBAN, 2010).?

To conclude. If we want to attract more women to business angels, we should encourage our angel groups to have a broader long-term view of their goals more aligned with our life values. Increase the relation with the entrepreneurs and better fundament of the investments. Provide higher due diligence and give male and female entrepreneurs the same opportunities. Create processes to listen to other investors' opinions, increase collaboration between players, and invest with a higher purpose. Are these “female” intuitions” bad for angel investing as a whole??They sound quite aligned with a smart investment thesis and a sustainable society. Female angels, the floor is yours, please come. The angel industry needs you to reach the next level.

A final word

Close to International Woman’s Day I want to celebrate those women that run the adventure to become angel investors and lead angel funds, networks, groups and associations. This article is fully dedicated to my dearest colleagues whom I was lucky to learn, share, have fun with, grow as a person and co-invest. Thank you, especially? to Cintia Mano , Isabel Faria , Maria Jo?o Souto , Andrea Piazza , Andrea Ruschmann, CCA and many other female angels from the COREangels family including Elisabete Barbosa , Karine K. Nascimento , Mariana G. Meyer , Patricia Ferreira Figueiredo , Alicia Mu?oz Lombardía , Carla Taramasco, Isabel Margarita Bravo and Paula Valverde Norambuena . Thank you also to Cristina Fonseca , Lurdes Gramaxo , Isabel Neves , Angel Gambino , Candace Johnson , Brigitte Baumann Gervais and Marcia Dawood . You are an inspiration to all of us.

Rui Falcao

PhD Angel investing

COREangels President

References

Amatucci, F. M. (2016). Women business angels: theory and practice. In H. Landstr?m & C. Mason (Eds.), Handbook of Research on Business Angels (pp. 92–111). https://doi.org/: https://doi.org/10.4337/9781783471720.00010

EBAN. (2010). Women & European Early Stage Investing. Eban White Paper, (November).

EBAN. (2022). EBAN STATISTICS COMPENDIUM European Early Stage Market statistics 2021. Retrieved from https://www.eban.org/wp-content/uploads/2022/10/Statistics-Compendium-2021-FINAL-3.pdf

Garaizer, J. (2016). The Rising Tide: A “Learning-By-Investing” Initiative to Bridge the Gender Gap. In Kauffman Fellows Report (Vol. 7, pp. 47–54). Retrieved from https://www.kauffmanfellows.org/wp-content/uploads/KFR_Vol7/Juliana_Garaizar_vol7.pdf

Huang, L., Wu, A., Lee, M. J., Bao, J., Hudson, M., & Bolle, E. (2017). The American angel: The first in-depth report on the demographics and investing activity of individual American angel investors. Retrieved from www.theamericanangel.org

Mohr, T. S. (2014). Why Women t Apply for Jobs Unless They Qualified. Harvard Business Review, (August 25). Retrieved from https://hbr.org/2014/08/why-women-dont-apply-for-jobs-unless-theyre-100-qualified

Stengel, G. (2022). Women Angel Investors : A Movement That Has Taken Off. Forbes, pp. 1–6. Retrieved from https://www.forbes.com/sites/geristengel/2022/08/03/women-angel-investors-a-movement-that-has-taken-off/?sh=5459fbcb2a18

Wood, A., Huang, L., Wood, S., & Murray, F. E. (2014). Investors prefer entrepreneurial ventures pitched by attractive men. https://doi.org/10.1073/pnas.1321202111