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A new study by Ameriprise Financial puts the differences between how men and women worry about retirement under the microscope.
In the New Retirement Mindscape City Pulse index, the firm finds even though men are 5% more likely to be planning for retirement, women are the ones stressing the most about having a nest egg large enough to sustain them in their golden years.
According to Bill Losey, a certified retirement coach and author of Retire in a Weekend, there are a handful of factors pushingwomen to the edge about retirement planning.
"There's so much information and so many different opinions, that I think women at this point really don't know who to trust," he says.
There was a time when investment clubs were all the rage. Financially minded people -- amateurs and pros -- would gather over wine and snacks, book-club style, to research stocks and discuss which companies looked like the best investments.
The recession was the death knell for one such club, co-founded by Ann Gibbons, of Chicago, in 1996 along with a fellow certified public accountant she met while working at a Chicago accounting firm, then-Arthur Young (now Ernst & Young). She served as the Upside Downside Investment Club's treasurer and monthly hostess until 2008, when the 10-person group decided to separate over economic strains.
Many of the original members who stayed in the group the entire time broke even, Gibbons said, whereas those who left right before the market went south lost money.
"Up until that time, we had been growing, growing, growing," Gibbons, 68, said. "But in 2008, the stocks were really falling, and some people had their own businesses, and they weren't feeling very flush. People needed the money. It was a tough time, so it kind of took the fun out of (the club)."
Gibbons said the members, which included attorneys, architects and health care professionals, would meet once a month at her house, eat pizza, drink a glass of wine and present their latest research on companies such as Apple, Starbucks, T.J. Maxx and Netflix. Each member would contribute $100 per month, and each investment decision would be collaborative.
Rothstein Kass, a professional services provider to the financial services industry, and the global women's network 85 Broads today announced the release of "Women in Alternative Investments – Industry Outlook and Trends," a new report focused on trends impacting core business functions at alternative investment firms. The research features the investment and operational insights gained through a third quarter survey of 189 executive-level women investing capital through hedge funds, private equity funds or venture capital funds. The report highlights the industry, capital-raising and investment insights of women fund managers and explores whether gender impacts core business functions such as capital-raising.
From the press release:
Rothstein Kass (www.rkco.com), a leading professional services provider to the financial services industry and the global women's network 85 Broads (www.85Broads.com), today announced the release of "Women in Alternative Investments – Industry Outlook and Trends," a new report focused on trends impacting core business functions at alternative investment firms. The research features the investment and operational insights gained through a third quarter survey of 189 executive-level women investing capital through hedge funds, private equity funds or venture capital funds. The report highlights the industry, capital-raising and investment insights of women fund managers and explores whether gender impacts core business functions such as capital-raising.
Findings indicate that while nearly 70 percent of respondents anticipate that the next 18 months will be challenging for the industry, they are more optimistic about investment outlook and new fund launches within that same period. Nearly 65 percent of respondents are confident that there will be attractive investment opportunities, and slightly more than half of respondents indicated that they plan to launch a new investment fund within the next 18 months.
"Over the past decade, there has been a significant increase in the number of successful women in the alternative investment community. Women have attained leadership roles in every niche and have added to the rich diversity of the hedge fund, private equity and venture capital sectors, to the benefit of investors and partners. These women are having a major impact on the direction of the industry," said Kelly Easterling, a Principal in the Financial Services Practice at Rothstein Kass and Principal-in-Charge of the Firm's Walnut Creek office.
Most survey respondents believe it is more difficult for women-run funds to attract capital. Slightly more than 40 percent of respondents believe capital-raising is more difficult for women-run funds because women often lack the investment track record their male peers have. About a third of respondents believe that women's capital-raising efforts are hindered by the stereotype that women are more committed to family and personal responsibilities than their career. Slightly over 30 percent believe it is harder for women to raise capital because they have less access to investor networks.
Other notable findings include:
Nearly 70 percent of the women surveyed expect the next 18 months to be more difficult than the preceding period. In spite of this, slightly over 60 percent of survey respondents anticipate an increase in new fund launches over the same period.
Although most respondents believe fund launches will increase in the next 18 months, respondents were divided as to whether more women would participate in these launches. Yet more than half of our survey respondents are planning to introduce a new fund themselves in the next 18 months.
Over 70 percent of respondents plan to raise capital in the next 18 months.
Family offices (52 percent), pension funds (52 percent), high-net worth individuals (50 percent), foundations (41 percent) and endowments (35 percent) are seen as most likely sources of new capital. Sovereign wealth funds (25 percent) and "other foreign sources of capital" (18 percent) were also viewed as significant sources of capital.
In an uncertain economic climate, over 65 percent of participants are confident that there will be attractive investment opportunities in the next 18 months.
A majority of respondents expect terms for new capital to be less favorable to fund managers in the next 18 months.
To help facilitate women's advancement in the industry, respondents noted that women need greater access to roles which enable them to establish an investment track record, more women need to be recruited into the industry, and institutional investors should consider women's representation in investment roles when making allocations.
The report also identifies the factors most critical to respondents' success in the industry. The most important factors were having a strong professional network, having strong mentoring relationships, willingness to take risks, strategic career planning, and strong support networks.
"One of the goals of 85 Broads is to use our platform to match great ideas with great talent," explained Janet Hanson, Founder and CEO of 85 Broads. "In recent years, we've seen greater numbers of senior-level women strategically investing significant capital in start-up companies and funds led by women. Senior women are making these investments, in ventures often led by young women, not out of an obligation to give back or for charitable purposes, but because they are investing in real talent. I think this trend will continue, and that we'll see more women with capital investing in funds directly. This is an encouraging development for the industry as a whole."
"Women in Alternative Investments – Industry Outlook and Trends," draws on the collective wisdom and expertise of the professionals of Rothstein Kass, 85 Broads, and an advisory board comprised of women leaders in the alternative investment industry to provide context for statistical findings. The Association of Women in Alternative Investing, the Women's Association of Venture and Equity, The Women's Private Equity Summit and the Women's Alternative Investment Summit also contributed to the report. Where applicable, results are contrasted against the results of earlier Rothstein Kass research initiatives focused on the hedge fund and private equity communities.
The National Venture Capital Association (NVCA) and Dow Jones VentureSource released the results of the 2011 Venture Census survey which examines the demographic composition of the U.S. venture capital industry. Among the findings are signs of increasing ethnic diversity, especially among newer professionals, an investor base comprised mostly of men, and a loyal and stable workforce as almost half the respondents expect to be in the same role at the same firm in five years.
The National Venture Capital Association (NVCA) and Dow Jones VentureSource today released the results of the 2011 Venture Census survey which examines the demographic composition of the U.S. venture capital industry. Among the findings are signs of increasing ethnic diversity, especially among newer professionals, an investor base comprised mostly of men, and a loyal and stable workforce as almost half the respondents expect to be in the same role at the same firm in five years.
“As the venture capital industry continues to contract and the number of professionals declines over the next five years, we could very well see more dramatic demographic shifts within the industry,” said NVCA President Mark Heesen. “The future composition will be predicated on a variety of market factors such as ongoing fund size, favored investment sectors, LP preferences, and public policy. Tax policy, immigration reform, the FDA approval process, and energy policy all will have some impact on where venture investment goes and who is doing the investing. Ideally, we would like to see a professional base that reflects the entrepreneurs in which we invest, one that is robust and diverse in terms of gender, ethnicity, nationality and age.”
Conducted for the first time in 2008, this year’s Venture Census comprised responses from nearly 600 professionals in both investment roles and administrative functions such as chief financial officers and marketing and communications professionals.
Gender Composition While 79 percent of the survey respondents were male and 21 percent were female, women were less likely to hold investment roles. Of those who identified themselves as investors, 89 percent were male and 11 percent were female. In 2008, when measured slightly differently, 86 percent of investors were male and 14 percent were female.
The life sciences and clean technology industries had the highest percentage of women investors at 18 percent and 15 percent respectively. Information technology (IT) followed with women representing 12 percent of business-to-business IT investors and 11 percent of consumer IT investors. The lowest percentage of women investors was in the non-high tech products and services sector at eight percent.
Of those respondents who were administrative professionals, 62 percent were women and 38 percent were men. The CFO position was split nearly evenly, comprised of 53 percent women and 47 percent men.
The percentage of women in the industry was inversely proportional to the age ranges. Of respondents under 30 years old, 28 percent were women. Of those in their 30s, 27 percent were women; 40s and 50s, 22 percent; and over 60 years old, 13 percent.
Ethnicity and Nationality The 2011 survey suggests that the venture industry is becoming more diverse, particularly among the newer professionals. Of the total 2011 respondents, 87 percent were Caucasian, nine percent were Asian, two percent were African American or Latino, and two percent were of mixed race. This compares to 2008 when 88 percent of all venture professionals were Caucasian, eight percent were Asian, and two percent were Hispanic and one percent were African-American.
Venture professionals who have been in the industry fewer than five years showed greater diversity: 77 percent were Caucasian, 17 percent were Asian, three percent were African American or Latino and three percent were of mixed race. In 2008, 82 percent of those with fewer than five years in the industry were Caucasian.
With regards to nationality, 95 percent of the 2011 respondents were American; two percent were from Europe, one percent from Canada and one percent from Asia. In 2011, 11 percent of the respondents immigrated to the United States, a drop from 13 percent in 2008.
Work Life Venture capitalists say they work long hours and travel regularly. Forty-four percent of those in investment roles report working more than 60 hours per week and nine percent travel more than eight nights per month. Professionals in administrative roles log fewer hours with 13 percent working more than 60 hours each week and one percent traveling more than eight nights per month.
Venture professionals tend to remain loyal to their firms. Fifty-seven percent of respondents have worked at one VC firm and 30 percent at two firms. When asked where they expect to be in five years, 49 percent of respondents expected to be at the same firm in the same role, 16 percent expected to be at the same firm in a new role and 10 percent planned to be at a new role at a new firm. Eight percent of the respondents expect to be retired of which 83 percent were over 55 years old.
Stability within the venture capital workforce comes mainly from mid-career professionals with more of the youngest and oldest groups looking to exit the asset class. In the next five years, 27 percent and 46 percents of respondents in their 20s and over 60 years old respectively plan to leave the venture industry. These figures compare to 9 percent of venture professionals in their 30s who plan to exit the asset class, 13 percent in their 40s and 19 percent in their 50s.
When it comes to social media, venture professionals are most committed to LinkedIn with 85 percent identifying themselves as users. Sixty-two percent use Facebook and 30 percent use Twitter. While 33 percent read blogs, only 11 percent write them.
Ninety one percent of blog writers are investors.
Eighty-one percent of respondents are married and 75 percent have children.
Education and Background The top universities attended by the 2011 respondents were Stanford and Harvard (both at 10 percent), University of Pennsylvania (eight percent), University of California - Berkeley (five percent), MIT (four percent) and Duke, Northwestern, University of Michigan, Yale, and Columbia (each at three percent). In 2008 the top universities attended were Harvard (12 percent), Stanford (nine percent), University of Pennsylvania (eight percent), Duke (five percent) and MIT (five percent).
The most common undergraduate degree earned by the respondents was in economics at 21 percent, followed by business administration at 16 percent and mechanical or electrical engineering at 13 percent. Nine percent of respondents have PhDs and 70 percent have master’s degrees. The MBA is the most prevalent degree with 49 percent earning the distinction. In 2008, 64 percent of those surveyed had master’s or PhD degrees.
The survey showed that venture capitalists have diverse employment backgrounds. Fifteen percent of investors were once a CEO or founder of a venture-backed start-up and 14 percent were the CEO of a private (non-venture-backed) or public company. Forty-four percent were employees at public companies, 28 percent worked at private (non-venture-backed) companies and 25 percent worked at venture-backed startups. Twenty-six percent were consultants, 20 percent were investment bankers, nine percent were scientists and five percent were attorneys.
About NVCA Venture capitalists are committed to funding America’s most innovative entrepreneurs, working closely with them to transform breakthrough ideas into emerging growth companies that drive U.S. job creation and economic growth. According to a 2011 Global Insight study, venture-backed companies accounted for 12 million jobs and $3.1 trillion in revenue in the United States in 2010. As the voice of the U.S. venture capital community, the National Venture Capital Association (NVCA) empowers its members and the entrepreneurs they fund by advocating for policies that encourage innovation and reward long-term investment. As the venture community’s preeminent trade association, NVCA serves as the definitive resource for venture capital data and unites its nearly 400 members through a full range of professional services. For more information about the NVCA, please visit http://www.nvca.org.
About Dow Jones VentureSource The Dow Jones VentureSource database tracks the activity of private investment firms and venture-backed companies in all industries and stages of development, worldwide. For information, visit http://www.dowjones.com/privatemarkets/.
About Dow Jones Dow Jones & Company is a global provider of news and business information and a developer of technology to deliver content to consumers and organizations across multiple platforms. Dow Jones produces newspapers, newswires, Web sites, apps, newsletters, magazines, proprietary databases, conferences, radio and video. Its premier brands include The Wall Street Journal, Dow Jones Newswires, Factiva, Barron’s, MarketWatch, SmartMoney and All Things D. Its information services combine technology with news and data to support business decision making. The company pioneered the first successful paid online news site and its industry leading innovation enables it to serve customers wherever they may be, via the Web, mobile devices and tablets. The Dow Jones Local Media Group publishes community newspapers, Web sites and other products in six U.S. states. Dow Jones & Company (http://www.dowjones.com) is a News Corporation company.
Financial literacy education for school kids typically focuses on the very basics -- saving money, opening a bank account, paying bills. The ING-Girls Inc. Investment Challenge takes a much different approach, bringing Wall Street to local classrooms.
Teams of high school girls start off by learning all those fundamentals of managing money. Then the real challenge begins: Learning about stocks and mutual funds, the girls begin investing with $20,000 virtual portfolios (supplemented monthly over the course of the year until each team has received a total $50,000).
With their portfolios, they learn about core investing principles such as assetallocation, diversification, portfolio turnover and valuation. The girls invest in mutual funds for the first six months of the challenge, then move on to individual securities.
After three years, 75% of any gains in the portfolio will be paid by the ING Foundation to the girls in the form of Girls Inc. scholarships for post-secondary education; 25% of the gains will be given to the local Girls Inc. affiliate to support local programming. The original $50,000 principal is re-assigned to an incoming team.
The partnership with the ING Foundation and nonprofit Girls Inc., launched in 2009, runs in New York City, Denver, Los Angeles, Holyoke, Mass., Atlanta and Alameda County in California. The program is to expand soon to Houston and Washington, D.C.
The girls often proved expectations wrong, says Laurin Cathey, head of multicultural affairs forING Americas(ING_), who oversees the program.
To start with, they quickly outgrew the trading platform provided for them and wanted a better, up-to-the-minute system.
"Something that was more real-time and more accurate was a lot more attractive to them than something that was a delayed-response platform," he says.
ING also learned the girls, despite their age, were not overly aggressive or impulsive.
"We all thought they were just going to walk in and start spending money because it wasn't theirs and they didn't have a long history of knowledge relative to investing," Cathey says. "We all thought they would be very aggressive early on. But immediately they really started to weigh investment decisions -- so much so that early on a few of our teams were hesitant to get going because they were having very robust discussions about what were the right stocks to choose and right decisions to make."
Sallie Krawcheck, the former head of Bank of America's wealth management unit, says Wall Street must raise its appeal to the next generation of investors and female professionals to remain competitive in the wealth management industry.
Wall Street must raise its appeal to the next generation of investors and female professionals to remain competitive in the wealth management industry, the former head of Bank of America's wealth management unit said on Monday.
The securities industry "doesn't do a great job for women or being appropriate" for the next generation, said Sallie Krawcheck, who was ousted as head of Bank of America's global wealth and investment management unit in September.
"We talk about stock market returns. We're not talking as an industry about protecting the downside," said Krawcheck, speaking at the Securities Industry and Financial Markets Association annual meeting in New York.
More conversations need to focus on planning and asset allocation, she said.
Indeed, becoming more relevant to a younger generation of prospective clients and building more diverse teams of advisers are among the changes Wall Street will have to make to compete in the future, Krawcheck said during an interview at the conference with PBS host Charlie Rose.
Younger prospective clients have become skeptical of the industry through press images of advisers being untrustworthy and repeated messages to avoid the markets, she said.
"They typically think that these organizations don't add value," she said.
The average wealth management client is about 63 years old, said Krawcheck, higher than the mid-50s average age of clients when Krawcheck started in the field during the 1990s.
Still, strategies for attracting the next generation of investors are fairly straightforward.
"The number one thing is 'Return my phone call,'" said Krawcheck. Other tools the industry can provide to clients, such as liquidity management, rank lower in priority.
"Clients typically say investment performance is important, but it's usually about 8th on the list," she said.
Often described as one of the most powerful women on Wall Street, Krawcheck said the dearth of female advisers posed one of the biggest challenges for the wealth management industry.
Women make up 16 to 17 percent of advisers in the industry today, she said. In senior management positions, that number is smaller - about 15 percent.
"Our industry does not do a great job for women," she said at the conference. "We do have large groups of people - women - who are underserved by our business."
Krawcheck said she visited the Harvard Business School last week, where she spoke to a group of young women interested in pursuing careers in the field, and felt apologetic about how the advancement of women advisers had been slow over the past decades.
"I kept wanting to say, 'I'm sorry - I feel sort of sad that, when I was your age I really wouldn't have thought that 25 years on, that we wouldn't have made more progress than we've made'," she said.
Indeed, the diversification of people working in the wealth management industry is key to tackling the challenges of a complex economy, Krawcheck said.
"You need a broad range of perspectives in order to navigate through."
Women entrepreneurs are making progress in obtaining investment capital; minority entrepreneurs still have a ways to go; and the overall angel investment news is cautiously optimistic. So says Q1 Q2 2011 Angel Market Trends, the latest report on angel investing from the Center for Venture Researchat the University of New Hampshire.
From the article:
Women entrepreneurs are making progress in obtaining investment capital; minority entrepreneurs still have a ways to go; and the overall angel investment news is cautiously optimistic. So says Q1 Q2 2011 Angel Market Trends, the latest report on angel investing from the Center for Venture Researchat the University of New Hampshire.
First, the positive news about women. In the first half of 2011, women angel investors represented 12 percent of the angel market, and women-owned businesses accounted for 12 percent of the entrepreneurs seeking angel capital. While these numbers aren’t outstanding, they do represent progress. More impressive is that 26 percent of the women entrepreneurs seeking angel investment in the first half of the year received it. In fact, the report notes, the percentage of women actually getting angel investments is above the overall average.
The news was not quite as good for minority entrepreneurs or angels. Minorities made up just 5 percent of the angel population, and 11 percent of the companies seeking angel financing were minority-owned. Like women, however, minorities received angel financing at a higher than the average: 17 percent of minorities seeking angel capital received it, compared to 15 percent of businesses overall. This is the positive news, but the report’s authors feel that the low percentages of minorities seeking angel capital is cause for concern.
If you’re not a minority or woman business owner, the news about angel capital is still pretty good (at least, relatively speaking). “The angel market appears to have reached its nadir in 2009 and has since demonstrated a slow recovery,” the report states. The market yield rate (the percentage of companies seeking financing that actually receive it) reached 15 percent in the first half of 2011, continuing a slow climb from 10 percent in 2008 and 12 percent in 2010.
Overall, total angel investments in the first half of 2011 were $8.9 billion—up 4.7 percent from the same period last year—and 26,300 companies got angel financing, up 4.4 percent from last year. The average investment was $338,400.
Some of the most popular areas for angel investing are not surprising, including healthcare services/medical devices and equipment (25 percent of total angel investments), industrial/energy (17 percent), biotech (14 percent) and software (11 percent). What is surprising is that media and retail sectors have become firmly entrenched in the top six most popular sectors for angel financing, with each getting 8 percent of total investments.
And for those of us looking to angels as a stimulator of job growth, there’s also good news. Angels have significantly increased seed and startup stage investing, which accounted for 39 percent of angel investments in the first half of this year—up from 26 percent during the same period last year. The report notes this is an “encouraging sign” for new business formation and job creation. And with an estimated 5 jobs created by each angel investment this year—or a total of 134,130 new jobs due to angel investment so far in 2011—it’s clear that angels can be a major engine of job growth if they feel confident enough to invest.
Asking whether things would have turned out differently if Lehman Brothers investment bank had been Lehman Sisters, Julie A. Nelson posits that while, yes, men and women are different, the crucial gender angle has to do with the sorts of behaviors we have come to believe are acceptable—or even inevitable—in the realms of business and finance.
Some have asked whether things would have turned out differently if Lehman Brothers investment bank, which went so spectacularly bankrupt, had been Lehman Sisters, instead. Would having more women in leadership positions in finance naturally lead to a kinder, gentler, and tidier economy?
While there is an important gender angle to the financial crisis, it is not about differences in traits that men and women presumably “bring with them” to their work. In a recent paper, I discuss how low-quality behavioral research and associated media hype have caused a resurgence in stereotyped thinking about men’s and women’s financial behavior and attitudes towards risk. Yes, men and women are different, but we are not nearly as different as those literatures would have us believe.
The crucial gender angle has to do, instead, with the sorts of behaviors we have come to believe are acceptable—or even inevitable—in the realms of business and finance. Commerce is often imagined as an essentially masculine sphere of activity. Not only are men envisioned as the naturally-suited participants, but it is also masculine-stereotyped behaviors, motivations, and skills that are most expected. Participants in commerce are assumed to be aggressive, risk-taking, competitive, achievement-oriented, and self-interested. On Wall Street, the language of “Big Swinging Dicks” and “Boom Boom Rooms” just makes this a bit more obvious than usual. The rise of complicated financial derivatives and computerized trading on Wall Street also valorized the nerdy math-geek, who, again, is archetypically male. The orthodoxy within academic economics reinforces these images by promulgating an image of markets as self-regulating machines whose energy source is the self-interest of rational “economic man.”
Not so anymore. The number of all-female angel investment groups – groups of wealthy individuals who invest in start-up companies – has grown over the last decade. In 2005, women represented approximately 8.7 percent of the angel market, according to the Center for Venture Research. In 2010 that figure had risen to 13 percent. There are currently seven or eight women-focused angel groups in the U.S., up from three in 2005, some of which have hundreds of members, says Marianne Hudson, executive director of the Angel Capital Association, an industry trade organization with 340 member groups.
The concept of an all-female investment group is not new. For years, women have gotten together to socialize and dabble in the stock market – a cross between afternoon tea and a power lunch. The most notable was the Beardstown Ladies, started in 1983.
A group of 16 spritely, elderly women, many well into their 70s, pooled their money to invest in stocks, including Wal-Mart. They chose Wal-Mart after seeing its parking lot busier than Kmart’s. (The Beardstown Ladies published The Beardstown Ladies’ Common-Sense Investment Guide and still meet regularly. They claimed they had annual returns of nearly 24 percent from 1984 to 1993, but it later turned out that they seriously overestimated their earnings.) In the late 1990s, after the “Tupperware party” model of investing saw little success, all-female angel investment groups began to crop up – a far more sophisticated model that has had staying power through the financial crisis.
“With the stock clubs, especially since 2008, people have learned that the market is like Las Vegas in that the house always wins. The big boys always win. You’re a little player,” says Barbara Boxer (not the Senator), who serves on the investment committee of BELLE Capital, an all-female angel investment group in Detroit. “As women have gone into the work force, they’ve become more sophisticated in finance and they want more than just the stock club idea. Angel investment groups are the next generation of these clubs.”
Angel groups invest not in public companies but in small, private endeavors that are highly risky and require serious capital investment to get in the game. Some of the members spent years in finance or ran companies of their own but were never invited into the exclusive male-dominated investment circles.
“What we’ve seen with the women in these angel investment groups is that they’re getting to be somewhat more important players than one would have thought,” says Jeffrey Sohl, associate professor of business administration at the University of New Hampshire’s Center for Venture Research. “Those [old style] investment clubs, which were basically glorified book clubs, only dealt with public equities. And in the scheme of things, they were very minor players. But in the private equity market, these angel investment groups have been major players.”
The typical angel group meets monthly, sometimes over breakfast or dinner, and representatives from startup companies are invited to present their business plans. The group then decides whether or not to invest. Some groups allow men to join. Others limit their access. The New York-based angel group Golden Seeds, for instance, allows no more than 15 percent of its members to be men.
“We chose that number because the number of female managing directors on Wall Street has never been more than 15 percent. We say when their numbers improve, so will ours,” said Stephanie Hanbury-Brown, who helped found Golden Seeds in 2004 after spending 15 years at JPMorgan Chase & Co.
It’s not just the number of female investment groups that are growing. The groups, themselves, are getting bigger. Golden Seeds, for instance, grew from 157 members last year to 200 today. New members must be referred by an existing member. Most are former Wall Street people who are semi-retired or left the workforce to raise children. In the Seattle-based Seraph Capital Forum, started by a group of 12 women back in 1997 and one of the first and longest-running of the all-woman angel investment groups, members must be accredited investors under federal securities laws, meaning they must have at least $1 million in net worth or have earned $200,000 in the previous two years.
“We believed there were a lot of women who had the economic means [to be] investors. So we gave people a safe place where they didn’t feel stupid asking questions, and where there wasn’t positioning or posturing,” said Janis Machala, one of the group’s co-founders.
In fact, research has found that all or mostly-female angel groups help women take bigger investment risks. A recent study by the Center for Venture Research showed that when there are more women in an angel group, the group is willing to take more risk, debunking a common belief that women are innately risk averse.
Many of the angel groups also target female-run companies, and that has meant more female entrepreneurs are getting a slice of the startup capital pie – though it’s still a pretty skinny slice. Women own about 29 percent of U.S. businesses, which includes home businesses, according to Census figures, yet they receive from just 4 to 9 percent of the venture capital funding available, according to the Kauffman Foundation. “Part of [starting the group] was we wanted a seat at the table, to get into these deals, and part of it was we wanted to support women entrepreneurs,” Machala said.
But women shouldn’t think just because they’re female, they’re going to get money from all-women angel groups, says Villette Nolon, Seraph’s president.“We want to invest in well-run opportunities. This isn’t charity.”