When Emily Bendell founded U.K.-based
The Oxford University grad hoped to raise outside capital from a female investor because BlueBella is “all about empowering women,” but she didn’t realize how difficult that quest would be.
“When I went to angel networks I thought: Where are the women?” she says.
Four-and-a-half years would pass before Bendell found what she was looking for:
“I don’t think you can make sweeping generalizations, but there are opportunities for women in the angel investment sphere,” says Bendell, 29. “The different perspective can help them spot an opportunity that men wouldn’t.”
Before connecting with Addidi, Bendell pitched to a number of all-male investor groups. “There are plenty of fantastic male angels,” she says. “In the end, we were over-subscribed: We had offers from male investors and, indeed, took some investment from a male-led VC. However, it’s also true that I had a harder job getting across what BlueBella was about and why we were different to male investment groups—especially at that all-important first meeting.”
Female investors are few and far between. An estimated 7% of British angel investors are female, according to “Siding with the Angels 2009,” a study by Robert E. Wiltbank, with the European average at just 3 percent.
The reason for the shortage is three-fold, says Brigitte Baumann, founder and chief executive of Go Beyond, an angel network that has a particular interest in encouraging European women to become business angels. Baumann is also vice president of the European Business Angel Network (EBAN) in Brussels.
“It’s not that women don’t have money or business skills,” says Baumann. “Women have wealth and strong knowledge in sales and marketing. Companies could use that kind of help. But we have different and broader drivers. We like to learn as we invest, connect with the entrepreneur and feel our money is contributing to the greater good.”
Against that backdrop, more women-only networks are emerging. Baumann co-founded Femmes Business Angels in France six years ago; Addidi Business Angels was launched as Britain’s first female angel investor club in May 2009 by Addidi, a boutique wealth management business for women; and then Addidi Business Angels teamed up in March with European angel network Angels Den to form Angels Lounge, whose goal is to more than double the number of female angel investors in the U.K. to 15% by 2015.
“The balance needs to be addressed to bring business angel investing more in line with the ownership of wealth,” says Lois Cook, co-founder of Angels Den. “Nearly half of millionaires under the age of 44 in Britain are women, yet we’re not seeing a similar rise in women becoming involved in angel investing.”
Raising awareness and creating environments where high-flying women converge is the key, says Baumann of Go Beyond, whose membership is 35% female and requires a minimum investment of €10,000 ($13,000).
“I’m always an optimist, though this type of change can take generations,” Baumann adds. “It’s crucial though: Entrepreneurship is the way out of recession, but that will only happen if we develop investment channels with money coming from both men and women.”
It would appear that convincing women to become business angels is going to be a gradual process. For example, Addidi’s limited liability partnership launched with the goal of landing 100 limited partners, but it has only attracted 13 investors so far. Addidi hopes to exit its investments within five years, with a target internal rate of return of at least 20 percent.
Women say it’s important for female angel networks to flourish because female investors have a different mindset than their male counterparts. “While female angels don’t necessarily want to invest in female-managed businesses, there’s evidence that they’re more likely to want to take more time over decision making, undertake more due diligence and invest in businesses they have some knowledge of rather than make a punt on an attractive-sounding venture,” says Anna Sofat, founder and CEO of Addidi.
Femmes Business Angels has invested in a range of companies, including Oemée, a lingerie maker that serves women with breast cancer, Canicrèche, a day care service for dogs, and LeBazarParisien.com, an online fashion retailer.
Given that it took nearly five years for BlueBella to raise outside capital, one has to wonder if it ever would have if Bendell hadn’t been introduced to female angel investors, who immediately understood that Bendell was serving an unmet—if discreet—need by women.
“Women would more instinctively ‘get’ our branding and market positioning, whereas many men didn’t,” Bendell says. “It’s also true that angels tend to invest in businesses they’re comfortable with or have a personal interest in, and, needless to say, BlueBella does not always fall into this category [for male investors].”
A longer version of this story previously appear in Venture Capital Journal, an affiliate publication to PE Week.
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