Know a woman with a great business idea trying to catch the eye of the investment world? Tell them to buckle up, because research suggests they are going to have a problem, writes Laura Miller
Of all the UK private equity investment in 2018, female founded companies won just 2%, according to last year’s British Business Bank’s Equity Tracker.
Two US studies shed light on what is going on: business school Babson College found 90% of venture capitalists were men. BBC’s Dragons Den may try to keep a 50/50 split when it comes to male and female angel investors, but the real world is very different.
Arguably a problem in itself, the real kicker is analysis by the California Institute of Technology, which found female-fronted companies were seen as less desirable to male investors. Male-led start-ups were almost twice as likely to get funding from male investors than female-fronted ones as a result.
CEO of the UK Business Angel Association Jenny Tooth says: “Despite media coverage of women in business and tech, it still highlights the gargantuan challenge for female-founded businesses to access sufficient investment to scale up.”
Lack of investment in women entrepreneurs does not just cost them – all investors lose out. Female run businesses perform as well as or better than those led by men, according to the Babson study. With the right investment to scale-up they could be filling retail investors’ pension funds and growing their retirement pots.
Tooth continues: “The opportunity is clear: create an environment where women start and scale businesses at the same rate as men and we could add nearly £250bn to the UK economy.”
Holly Mackay helped set up Allfunds Bank and founded Platforum, the fund platform research firm. Now heading up financial education site Boring Money, which she also founded, Mackay recently pitched to a group of angel investors called Angel Academe, most of whom were women.
“Until that meeting I had only pitched to men,” she recalls. “I really loved it – so refreshing. We need more female investors to change the experience. We all feel more empathy with ‘people like us’, so why can’t all-male private equity and VC teams appoint female business advisers for relevant sectors to add a different view?”
Mackay’s experience of male investors was they were looking for exaggeration, something she did not want to provide.
“They are not really interested in businesses that have an ounce of humility,” she muses. “They want to be sold the next Uber, and that dogged belief as a start-up with limited revenues takes massive confidence, and arrogance.
“I was brought up not to show off, and hate making promises I’m not 100% sure I can keep, so my business plans have already had a very strong internal ‘rubbish detector’ applied to them. Some of these factors make me fundamentally ill-equipped to raise a penny from VCs.”
Tooth says Mackay’s experience echoes that of many female entrepreneurs seeking investment: “It’s an old trope: men are cavalier with money, women are cautious, but when it comes to the pitching room I do find female entrepreneurs undersell themselves; asking for just enough, or even less investment than they need. With men, I’m met with outrageous requests.
“Neither inspires confidence in investors. The trouble women face is that they are walking into rooms filled predominantly with men, for whom a cautious approach may be a red flag.”
Shaking up the investment world to bring more diversity to those who hold the investment purse strings to benefit female led business is likely a slow process.
In the meantime, Tooth recommends women entrepreneurs seeking investment do three things:
1) Have a growth plan
“Women lack entitlement,” she argues. “They want to feel they have proved the worth of their business before asking for huge sums – something that tends to trouble men less.”
Walk in with a forensically thought out plan of how you want to scale your business and you will prove your ambition through the clarity of your planning.
2) Work out how to execute it
Do not be afraid to show what you could achieve if you had the money. Think about what you need and ask for it. Don’t feel by not asking investors might respect you more – they will just see it as a lack of ambition.
3) Investors aren’t the enemy
Women can undersell themselves due to a misconception the amount of money they’re asking for will correlate to the number of shares, and control, they will have to give up. But investors want to align with entrepreneurs and support them. Ask for help, and show you are willing to collaborate at an early stage.
Women in Investment Festival
The Women in Investment Festival, in partnership with sister publications Professional Pensions, Professional Adviser, Retirement Planner and Investment Week, is a one-day festival that seeks to serve as a beacon for the benefits of a truly diverse industry for all, whatever gender, colour or creed. Although it will naturally talk to and celebrate the achievements of women, we also believe we should showcase the role men play in the equation, and highlight examples of best practice where their support is helping to drive change for true gender equality.
It takes place on Tuesday 3 March 2020 at the Brewery in London, UK and we are currently running a discounted super early bird ticket price. Head over to the website here for full details.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
