GEW Spotlight on Female Funders: Inspiring Female Angel Investors

To celebrate the theme of investors today for Global Entrepreneurship Week, we chatted with Katherine Hague of Female Funders, a platform that inspires women to make their first angel investments. Find out what Katherine had to say about her company, and her experience as an angel investor.

What is Female Funders in your words? Explain what you do.

Female Funders is an online destination and community for female angel investors, and aspiring angel investors to get inspired, learn, network, and invest. Our goal is to empower 1,000 women to make their first angel investment by the end of 2016. Our flagship program is Angel School, the first online education program for female angels. Our second cohort kicks off in February, with registrations opening up in January.

Women around the world continue to climb the corporate ladder, gain financial independence and amass personal wealth at unprecedented rates. I believe that these women are the angel investors of tomorrow – learning, having fun and helping to support the next generation of entrepreneurs.

Today 18% of startups are led by women but only 2.7% of venture capital funding goes to female CEOs. This is particularly shocking considering that many studies have shown that female-led companies actually produce higher returns.

I believe that this problem is caused in large part similarity biases among male venture capitalists (VCs). Today men make up 94% of deal making VCs and 80% of angel investors. I believe that the same similarity bias that hurts women today with male VCs could help change the numbers if we get more women on the other side of the table as investors.

Through Female Funders we hope to create a place where women can find the knowledge, confidence and support they need to make their first investment and continue their journey towards becoming better investors.

Tell us a bit about yourself, what made you want to start Female Funders?

I started my first company 4 years ago at the age of 21. It was made possible by my first angel investor, who put $10,000 into the company, the money we needed to launch. That investment helped get us off the ground. We went on to join an accelerator and raise a venture capital round from investors like Peter Thiel, and we ultimately sold the company just two years later, when I was 23.

After selling my start-up I became an accredited investor, and it opened up the door to making angel investments of my own. Since then I’ve dedicated much of my time to helping other female CEOs raise money and grow their businesses.

I’ve made four angel investments [two in female CEOs], built Female Funders as a community for female angel investors and am now writing a book for O’Reilly Media called Funded: An Entrepreneur’s Guide to Raising Your First Round, which will be coming out early next year.

I owe so much to my first angel, and I’m on a mission to help others experience the magic of angel investment. Female Funders is an amazing vehicle through which I can do that.

As an angel investor yourself, what are some of the things you would look for in a start-up/entrepreneur before investing?

The main things that all angel investors look at are team, product, market, and traction. Of these factors I find team and market to be the most important. As Marc Andreessen, who coined the term product-market, would say “the right market, with a big enough problem, can pull the product out of a start-up”. My investments also tend to veer towards female founders, or products targeted towards female consumers. Personal growth through angel investment is also very important to me and I try to invest in founders and companies that I think I can learn from.

What was your first angel investment, and what made you decide to invest in this person/business?

My first sizable angel investment was made in March 2015. The investment was in Toronto’s CareGuide, which is led by serial entrepreneur John Philip Green. I’ve known John for years and believe in what they are doing at CareGuide, but that wasn’t my primary motivator to invest. When Heather Payne, my first angel, and I heard that CareGuide was closing a round of financing with more than 70 angel investors, but only had one female investor, it underscored how backwards the gender balance in angel investment truly is. On principle, we decided we needed to invest in the round to put our money where our mouths were and start to do something to change the ratio. Seeing that round come together really motivated me to start doing more and helped me decide to start Female Funders.

Why do you encourage women to be angel investors?

I think that many women would get a lot out of the experience of being an angel investor. There are so many benefits to angel investing, beyond just the potential for financial return.

Angel investment is an opportunity to learn about new industries, to build your professional and personal network, and to see how various businesses work behind the scenes. Angel investment is one of the best professional development courses a woman could ever take. Wouldn’t you spend $10K on a professional development course that could change your career?

Angel investment also gives women the opportunity to invest in products, people, and ideas that they believe will change the world. We all want to change the world in different ways, and angel investing is one way you can put your time and money behind things you believe in. Not to mention, there is nothing like the exhilaration of writing your first cheque, and seeing the joy on an entrepreneurs face as you help make their dreams a reality.

Yes, we invest with the goal of making money. But the truth is there are so many other reasons to invest — and those reasons are why I think women should consider angel investing.