First a couple of statistics. Of the UK’s millionaires under the age of 45 there are more women than men and within the next 10 years, 55% of the world’s wealth will be concentrated in the hands of women.
Quite a lot of progress in 100 years when you think back to a time when women weren’t allowed to own a property in their own name and everything instantly became the property of a woman’s husband after marriage.
The business world has responded to most recent demographic shifts. Just one example is that luxury goods manufacturers are increasingly recognising the power of the female pound or Euro.
So, why is Finance South East interested in this? We are a regional funding organisation, backed by the regional development agency, and we are committed to investing and supporting high growth businesses in the South East region. We make around 85 investments a year into exciting new businesses, an increasing proportion of which are owned or part-owned by women entrepreneurs.
We also run a business angel network with around 150 active members and when I look around the room, I see very few women. In fact in our existing network, we have only around five female business angels. This is reflected nationally – 95% of British angels are men. So, why aren’t there more women investors? They have the wealth and the motivation, so perhaps women aren’t aware of the possibility of becoming a private investor; it is not culturally or traditionally something women have done. So, what we are trying to do is to change this perception, raise awareness of the business angel market and broaden the base of this market. It has been done successfully in the US and France – so why not here?
The image of business angels is not necessarily helpful. Most people associate this with the Dragons’ Den, which is seen to be confrontational, aggressive and quite macho. But this is entertaining, dramatic television and does not reflect reality. We need to start changing perceptions.
Many women can bring excellent qualities to business angel investment. Speaking in generalisations women are very collaborative; they work well in teams, bring contacts and are willing to share ideas and experiences. These are all great assets to bring to the role of angel investing; a supportive investor who lends their experience and talent to the businesses they invest in is worth far more than one who just stumps up the cash.
We do not envisage that the female business angels that we work with will invest in entirely women-owned businesses; they’re going to be looking at all sorts of investments. However we do believe that women will approach investing in a slightly different way and some may have a greater empathy for products and services that are aimed at the female market.
We feel that by encouraging more women investors, this will have a positive effect on the financing of all businesses, including female-led businesses and female-orientated products. This is backed up by academic research. We need people to understand the risks and rewards, so that is why we will be holding training sessions for would-be-angels, so more women can go into this with their eyes open and develop a high quality portfolio of investments. This training will commence in January.
Sally Goodsell is CEO of Finance South East and recently spoke at Women Investing in Women, at Coutts & Co in London