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By Hannah Connolly
hen it comes to early-stage businesses and start-ups, few groups hold more weight over the ability to scale and grow than angel investors - an individual willing to support start-ups in the early days, when most investors are not prepared to back them. A valuable source of funding, just 14 per cent of UK angel investors are women, according to the latest report from the UK Business Angel Association (UK BAA).
“Over the past decade, female angels have been involved in deals worth over £2bn helping to create more than 10,000 jobs and supporting more than 1,000 female-founded businesses,” says CEO of NatWest Alison Rose, the bank co-published the study.
Yet despite these significant contributions to the UK economy and the labour market women angels remain largely unseen.
“One of the key challenges we face is the continuing low proportion of female angel investors, which limits the pool of equity capital available to support entrepreneurial growth and innovation,” said Jenny Tooth OBE, the executive chair of the UK BAA and co-chair of the Women Angel Investment Task Force.
Enter the angels working to change the landscape. Here The Stack World speaks with four of the arch angels tipping the balance and paving the way for women’s equal participation both as investors themselves and in facilitating a new charge of successful female founders.
Founder of Peanut and Peanut StartHER investment fund
Michelle Kennedy had just given birth to her first child in 2017 when she founded her company Peanut. Left with questions and nowhere to turn, Kennedy tapped into 10 years worth of social networking experience to create Peanut as a global community of support.
In what is the next step on the journey, Kennedy launched the micro-fund StartHER in 2021, a new investment arm in her global community of support. “The idea for StartHER was born out of my own experience with the fundraising process. When I was looking for advice on how to finance a new company, it was suggested that I start with a ‘friends and family’ round,” she tells The Stack World.
StartHER is helping to address the first stage block or what is known as the “friends and family” round, referring to a pool of capital that is often sourced from within close circles or immediate family members. “What if you don’t have friends and family who can write checks and take risks?” asks Kennedy.
“The assumption that founders should have networks able to invest in their businesses creates an unfair starting line for most groups. If we don’t remove barriers to that initial funding by providing access to capital, how can we ever hope to see a changing founder profile further through the fundraising funnel?”
Peanut StartHER, as Kennedy sees it, it’s leveling the playing field: “We (Peanut) want to be the family these founders can turn to, opening the door to our professional networks too.”
But what are the problems, and how does Kennedy see the presence of angels changing the funding gulf going to women entrepreneurs? “With so few women able to write cheques, there’s not a massive pool of investors who have first-hand experience of the issues women are often trying to solve.”
“Investors look at numbers and they do due diligence, but there’s also a lot of instinct involved. And it’s human to feel more passion for problems that you’ve lived or experienced. So, there just aren’t enough investors out there who have personally felt these problems, or have real reason to fear that they may in the future. That’s one of the main reasons Peanut launched StartHer - a micro fund committed to investing in women and underrepresented founders.”
Founder of Ohana, co-founder of entOURage and angel investor
“Supporting, encouraging and empowering women is my thing,” says serial entrepreneur and angel investor, Jasmin Thomas.
Thomas founded her own company, Ohana in 2018 which started life as a vegan CBD-infused skin care brand, and is now pivoting towards an all-in-one solution based app for women’s health.
Her own medical journey led to a new professional one that allowed the entrepreneur to pursue her passions. The impetus behind her work was as an angel, telling The Stack World: “I was drawn to angel investing to support other founders in achieving their dreams.”
Thomas’s approach to investment follows a level of intuitive thinking paired with the more logistical: “I look for a solid founder who can seamlessly explain their mission and their product in a few sentences. I can normally tell quite quickly if I resonate with an idea or an investment opportunity.” After this it’s all about “resilience”. Thomas helped founders understand the total scope of the market, opportunities for pivots, road maps, and bringing home the importance of building the right team.
In her angel career Thomas works with a variety of pre-seed and seed stage startups within the spheres of Health, CPG, FinTech and Deep tech. Helping founders and their teams with recruitment and establishing the all important early stage networks.
“Education needs to be targeted at younger women. I had a lot of disposable income in my early 20s with zero to little financial responsibilities, which is probably the best time to get into angel investment as you’ll learn so much as you go,” she says.
She adds “I would specifically like this education and information for women outside of the startup/investment eco system from social groups that would usually not have addressed generationally passed down financial literacy.”
As Thomas sees it, the biggest challenge for women at the early stages of their business ventures is multifaceted but dominated by one underlying issue: “unconscious bias, the male dominated rooms and lack of understanding what investors want to see and the types of business that are investor back-able.” Which is where Thomas comes in, understanding innately the business proposition of women founders looking to solve women-focused issues.
Co-founder of Alma Angels and Speedinvest partner
“The best way to engage in innovation and feed your intellectual curiosity (is to) read lots and get up to speed, and talk to other angels and investors,” says Deepali Nangia, on getting into the investing scene.
Nangia is by no means a stranger to the investment world as the co-founder of Alma Angels and a partner at Speedinvest. As an investor, her personal interest and much of her portfolio lie in the sectors that combine profit with clear purpose, particularly healthcare, climate, education and inclusive finance.
If there’s one thing Nangia would like to change in the angel space it’s the idea that large quantities of money are needed to get investing: “I’d like to break the notion that you need to be super wealthy to angel invest; you can start with small cheques and build a diversified portfolio.”
Nangia co-founded Alma Angels alongside Ella Goldner, creating a thriving ecosystem of members pledged to back and invest in female-founded companies. Operating not as a syndicate or a deal-brokerage, Alma Angels operates as a movement via invitation only.
Becoming a full time partner at Speed Invest as of February last year, in this arm of her work, Nangia focuses on female and underrepresented founders at pre-seed and seed level.
When looking for businesses to back Nangia follows a four step process; firstly looking for a strong founder marketfi fit, secondly identifying the “pain spot” a business is solving and whether it large enough in the first place, thirdly to discover whether the business solution is disruptive or incremental and finally, can she work with them? And how does she feel about them?
Mandy Nyarko MBE
Mandy Nyarko MBE
Mandy Nyarko MBE is no stranger to the world of investment, recognised as one of the 25 Black entrepreneurs to watch in 2022 and featured in Forbes as one of the UK’s leading investors in underrepresented founders: “My journey actually started through angel investing on behalf of a super angel’s capital around six years ago, then I started investing my own capital a year after,” she says.
“I think for me it was certainly about using my money to make system changes. I could see that funding for early stage founders was being distributed to mainly male-led teams. The narrative being created was essentially that women led businesses weren’t credible enough to receive equity investment and I just didn’t believe it. If you added a racial lens to that Black women were receiving less than 0.5 per cent of VC funding at that time, and there were barely any Black women angel investors. So my first investment was into a woman and 70 per cent of my subsequent investments have been women led.”
Working with founders committed to building business with the potential to scale and grow by creating the right conditions to make this happen. Allowing entrepreneurs, regardless of their backgrounds, to tap into the expert skills, networks and the capital to thrive. Working alongside major brands such as AWS, HSBC and Atomico.
As a global innovation strategist and consultant, Nyarko has built out various acceleration and incubation programs, coached and helped raise investment for over 200 startups, and is a venture scout at Ada Ventures – the £30m seed-stage fund investing in under-represented founders.
When it comes to the significance of women angel investors, Nyarko recognises the importance of early-stage support: “It is a fact that women invest in women, all businesses need capital in the early days to actually get their concepts o the ground, female angel investors are so important to female founders as our capital has the ability to enable many women to become entrepreneurs, our funding allows them to prove their initial hypothesis, enabling them to gain traction that can allow them to secure a larger round of capital to scale their business,” she says.
Adding:” We’re called ‘angels’ because we are supposed to come in and provide financial support when the founder needs it most. By enabling these women to develop these businesses we are also creating a pipeline of great role models for future young women to see themselves as entrepreneurs, which I think is where the greatest impact will be made.”
Investment in female-founded businesses is key to reshaping the future of gender equality. As we prepare for our Pitch Night Meet four angel investors taking the task into their own hands.
By Hannah Connolly
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