Filling the Gender Gap – Educating and Training Women as Angel Investors
The glass ceiling is alive and well, especially for start-up entrepreneurs.
According to American Express Open 29% of all US businesses are owned by women and their numbers are growing by 1 and a half times the national average. “There are over 8.1 million women-owned businesses in the United States, generating nearly $1.3 trillion in revenues and employing nearly 7.7 million people.”
However, while more women are starting new businesses, fewer are getting start-up funding. According to a study by University of New Hampshire , only 13% of the $20.1 billion invested in 2010 went to women-owned businesses. Fortunately for women entrepreneurs, the Pipeline Fund Fellowship (PFF) is trying to address the gender gap on two fronts, by increasing the number of women angel investors, and second, by increasing the funds available for women owned, for-profit, social ventures.
The Pipeline Fellowship Fund is the brainchild of Natalia Oberti Noguera, a young woman with an economics degree from Yale and a passion for social entrepreneurship. It would appear that her passion is resonating throughout the investment community. There were fifty applications for the ten slots available in the inaugural six-month program to educate, train, and mentor women to become angel investors. The ten women selected come from a variety of backgrounds including technology, dentistry, finance, and government relations. They hold degrees fine arts, political science, philosophy, economics, and law. While several have an MBA, the common thread that ties them together is the desire to support women entrepreneurs. According to Ms. Oberti Noguera, the women were particularly drawn to the cohort model, where the fellows learn from and support each other and make decisions as a whole.
The six month program is intensive and involves three main components – education, mentoring, and practice. The fellows meet monthly for three hours to discuss topics related to investing such as portfolio strategies, due diligence, and term sheets. The education sessions are presented by a variety of guest speakers including Morgan Simon, co-founder and CEO of Toniic.
In order to provide an opportunity for additional learning and support, each fellow is paired with their own mentor. The mentors are made up of five men and five women. While the fellows are all women, the selection of men as mentors was deliberate, according to Ms. Oberti Noguera she wanted “to match fellows to experienced angel investors and integrate women into a male dominated network.” The mentors are all experienced angel investors, and some bring additional experience and background include serial entrepreneurs, a lawyer, and an investment banker. In addition to their shared background as angel investors, they all have in common a willingness to “share their stories, lessons learned, and best mistakes.”
Finally, the fellows will practice what they preach. As part of the acceptance into the program, each of the ten fellows had to commit $5,000 to be invested in a woman-owned, for-profit, social venture. The practice will come in to play this week when the fellows host the PFF Pitch Summit on Friday, June 17. The Pitch Summit, being held at the Irvington, New York headquarters of Eileen Fisher, Inc., is an opportunity for eleven groups of women entrepreneurs to present their business plan in hopes of earning a $50,000 investment. The presenters are:
- 6dot – tools designed with the blind in mind for easy distinguish common hosehold items
- The Crazy Kiwi – convenience store and cafe with daycare
- DiaperBuds – individually wrapped, vacuum packed disposable diapers
- Gifts That Give – offering high-end brands across social networks donating 20% of every purchase to the buyer’s cause of choice
- Just Shea – increasing the safety and income of women working in the shea trade in Ghana
- Nomi Network – providing career and employment opportunities for survivors and women-at-risk of sexual trafficking
- Pengo – online lending platform for SME’s in emerging markets
- PhilanTech – online grants management system for funders and non-profits to streamline the grants management process
- PROUDgirls – online community and offline enrichment program to develop girls 13-18 into tomorrow’s leaders
- Skwikee – YouTube fed, Facebook played social gaming site where content and rewards are controlled by contributors
- Solar Light Pillow Project – providing cost-effective solar lighting to people without regular electricity and victims of natural disasters
In preparation for the Pitch Summit, the fellows had to bridge the gap from theory to reality. They had to design an application form, identify criteria for evaluating submissions, perform initial research, select attendees, and develop a framework for evaluating the presentations. The fellows will continue their education with workshops on due diligence and valuations. They will complete the application of their learnings in the fall of this year when they will select the winning venture to receive $50,000 in capital.
While the inaugural group won’t officially graduate this fall, the success of the program is already evident. The interest in the PFF has been so high there will be a second group starting in New York, a third in San Francisco, and there is interest in launching the Pipeline Fund Fellowship in Washington DC, Chicago, and Boston.