It’s only a few days until the 2019 BAFTAs and I’m heading to the charity’s home in the West End of London.
The café is abuzz with clinking mugs, gently rumbling chatter and the whooshing sound of the steamer on the coffee machine.
I’m meeting Sarah Turner, CEO of Angel Academe, an angel investment network supporting tech businesses with at least one female founder.
She’s sitting next to the window in a high-backed purple chair – I feel as if I’m about to present a pitch to her. As I take the seat opposite, I wonder if she feels the same way.
We’ll be talking about the difficulties that women face both as entrepreneurs and in becoming investors themselves.
Research from the British Business Bank recently found that only 1p out of every £1 of venture capital funding goes to female start-ups. At the current rate, it will take over 25 years for all-female teams to receive 10p for every £1 of venture capital investment. A huge 89pc is going to all-male teams with the remaining 10pc going to mixed gender teams.
Meanwhile, the UK Business Angels Association (UKBAA) says that a meagre 14pc of the UK’s angel investors are women.
How do female founders tend to approach investment pitches?
I’ve been meeting female founders and female investors for about six years, and I’ve seen an exponential increase in the number of women starting businesses. I’m meeting women that are quite forthcoming about raising funds and asking for at least the same amount of money as their male equivalents, so we have got to be careful not to generalise.
Presentations vary – there’s a lot of training out there targeted at people who want to put together funding pitches. A lot of people now are very educated and polished in the pitching formula.
Women face a lot of challenges as founders and the investor community is still overwhelmingly male, especially at decision-making level. However, women are often building businesses that are targeted at areas that male investors might want to invest in.
In my experience, women tend to talk more honestly about their business and what they’ve achieved. To a room full of men, that could make it sound like a much less interesting investment opportunity.
I do think that we communicate differently from men so it’s helpful to have people in the room that communicate in diverse ways. I think that as women we are conscious of the bits we don’t know so we are likely to ask other people for advice whereas men may wing it. When we bring men and women together, we create more diverse environments with different ways of decision-making.
How do some female entrepreneurs feel in front of all-male panels?
There are some women who thrive in that element, but it’s not always the case.
I was reading something from one of the founders of a business we’ve invested in. She said she was already an anomaly as a founder – not many people give up their job to set up their own business. As a female founder talking to a group of all-male investors, she felt like a double anomaly.
I think that men very rarely get the feeling of being heavily outnumbered. At the times when they do, you can see them thinking: ‘Oh, this is what it feels like!’ You’ve got to put men in that situation to see if it makes them feel relaxed or not.
‘I think that men very rarely get the feeling of being heavily outnumbered’
One of the clichés that’s applied to women is that we have no confidence. It’s contextual – in an environment where you feel comfortable, you’ll be confident.
Do women founders experience sexist behaviour?
A lot of the founders we meet tell us stories of questions being directed to their male co-founder rather than them. Another one is being asked to meet an investor only to find out when they get there, it’s a date.
Most of the bias they face is the unconscious kind which is more harmful in a way. I’ve seen instances where women present and men’s eyes glaze over or they leave the room because they’re not going to be interested in that business. I’ve also seen cases where very technically competent women are not assumed to be credible as technologists. This is changing as men get to see more women in these roles and I’m hopeful that it will keep getting better.
At Angel Academe we’re very passionate about proving that women create scalable tech businesses and disproving myths around women only building niche companies.
On the other side of the table, we want to prove that women will invest and that they’re not risk-averse; under the right conditions they’ll become investors as well. They’re valuable because they bring skills, contacts and investors to the businesses they invest in.
What needs to change to open up funding to women founders?
What we need to have is a community that understands women better.
Venture capital is very conscious of the diversity issue and changing recruitment practices. It’s also trying to employ and promote more women because, crucially, it’s not good enough to have females in junior roles. We need to have them in decision-making roles too.
The angel community is a bit harder because it’s made up of private investors putting their own money in. It doesn’t work in quite the same way.
I do think we need to change the traditional pitch event where founders go and present to a room full of men. If we can make it more balanced so that entrepreneurs pitch to men and women, they’ll have a good chance of success. Investment will be down to the quality of the business and not the gender of the founders.
What about the barriers to women becoming angel investors?
There aren’t many women who are aware of angel investing as an opportunity. If they are, they don’t see themselves as potential angel investors. They think they have to be Dragons’ Den-type wealthy or have that sort of personality.
Networking comes into play, so if they don’t know anyone who’s raised money for business or they don’t know anybody who is investing themselves then they’re less likely to do it.
Part of fixing this problem is through financial advisors. They’re largely male and tend to think that women are more risk-averse so don’t go over all of the options available to them.
Women own 48pc of the net wealth in the UK, so they’re not foregoing investing because they can’t afford it. There’s a cultural issue and a lack of awareness.
On the venture capital side, more and more women are taking senior roles in VC firms and more women are setting up their own funds. I saw a statistic that said when a VC firm adds a female partner, these firms are three times more likely to invest in a female-founded company. There’s also a generation of younger men who may be more aware of the opportunities available with women founders.
‘Women own 48pc of the net wealth in the UK, so they’re not foregoing investing because they can’t afford it’
More angel groups are looking to attract female entrepreneurs in general. They will bring a much better balance to the marketplace.
You mention that women are often disadvantaged because they don’t know investors. How can they connect?
There’s definitely an issue around networks. Venture capital is a heavily male-dominated part of the finance industry. Women are less likely to have gone to school or university with someone who works in that sector. That’s just how it goes.
You’re much more likely to get VC investment from a warm introduction – you know them directly or indirectly – than if you just fill out an application for them. It’s not an easy problem to solve as VCs get loads of applications from people trying to raise money. If an application comes from someone you know who knows what you like, it’s a good filter. However, it’s unhelpful if you’re trying to increase diversity.
We only accept applications through our online application form even if the entrepreneur knows someone who knows us. It’s the same application process for everybody so that we can remove that network bias.
In terms of finding VCs, go to as many networking events as you can – go and speak to people. A lot of VC firms do office hours or they go and speak at events because they’re conscious that they’re under-serving women. There will likely be some female VCs in your network so try and get introduced.
Angel Academe works with tech founders. What areas in tech are investors looking to support?
As investors we’re interested in all of it. We like ideas that could be potentially disruptive, ideas that could change things in the future. Businesses are going to be a large part of that change.
It’s about solving problems that we care about as investors such as ageing society, sustainability, the environment: how is technology going to be deployed to solve those sorts of problems?
You can see what kind of businesses we’ve supported on our portfolio page. We’ve got a company which shows transparency within the food supply chain so shoppers can make more informed decisions. We’ve also invested in companies that provide invoicing for small businesses and remove bias from the employee hiring process.
I’ve seen comments on the web about articles on female entrepreneurs such as, ‘Oh yeah, invest in women just because they’re women. That’s a good idea.’ What would you say to sceptics?
At Angel Academe we invest in women because we think they make good founders. We’re not investing in any business just because it’s female-run. We’re very fussy about what we invest in. We see a lot of things and we don’t invest in much – only the businesses that we think will make a good return to us.