A campaign which encourages women into investing has been backed by several leading figures.
The ‘Start with One’ campaign claims 70% of women don’t talk about investing, but are more likely to start after a conversation.
Polly McMaster (pictured), a former finance professional who is now founder and chief executive of luxury workwear brand The Fold, is leading the charge after research revealed a conversation gap between men and women was contributing to a gender investment gap of almost £600 billion in the UK.
Backed by some of the UK’s leading female investors, including Samos Investment’s June Angelides MBE and Marketing Cube’s Maya Moufarek, ‘Start with One’ says a lack of confidence and information is holding women back.
“I remember a time when I couldn’t name a single female investor. I love that it’s changing but the important thing is to have the strength to forge their own path,” says Angelides.
“If we want to create change we have to be prepared to think differently and walk into rooms ready to educate and challenge biases.”
‘Outperform men’
Rupa Ganatra Popat, founder at Araya Ventures, says that women have been deterred and shut out of the investment world for too long – even though they have been proven to outperform men in investment performance.
“Angel investing is an opportunity to invest in an interesting asset-class with high potential returns whilst also adding value to the entrepreneurs and making an impact on society – yet today only 14% of UK angel investors are women,” she says.
“There are a lot of myths around angel investing that you should ignore – that you need to have hundreds of thousands of pounds to get started; you need to have a background in finance; you need to be able to evaluate financial models; or you need to already know a lot of entrepreneurs that you can invest in.
“They’re just not true so don’t let these myths prevent you from getting started.”
Learning curve
Moufarek says angel investing can be a steep learning curve. “Having some startup experience as an operator is always an advantage,” she adds. “Finding your tribe early also helps. Join an angel community to learn from more tenured angels, get access to deals and help with due diligence.
“It is easier to engage with deals in sectors that you have been exposed to and therefore have an unfair competitive advantage when it comes to accessing the opportunity and showing the value you can bring to the founding team.
“Personally, I also invest in what I have empathy towards: the problem and the target audience.”
Karen McCormick, CIO at Beringea, says a person’s first investment is a chance to build confidence. “It doesn’t have to be the deal of the century: it just needs to be one you feel good about.
“Try for something that has a high likelihood of making money as opposed to something that has to shoot the lights out – which by definition means high risk.
“Making a few initial investments quickly also means you’re more likely to have one or more early winners.”
Crowdcube
500 women from the Crowdcube community also offer their insights on how to get started in investing via the campaign.
In an effort to attract a larger demographic of female investors and start a movement that would help more women begin their investment journey, The Fold launched a crowdfund of its own on Crowdcube. It has already raised £1.6m against a target of £750,000-£1m, with a week still to run.
The majority of investors – around three-quarters – in The Fold’s crowdfund so far are female – a huge jump from Crowdcube’s average female investor split of 29% female vs 71% male.
Andrea McKinnon, chief investment officer at Crowdcube, says women considering an investment portfolio must ask themselves the following questions: “How much can I invest? What level of risk do I want to take? What level of risk can I afford to take? What is the goal of my investments? How long am I investing to reach that goal?
“Then you can start to think about what you want to invest in. Diversification is key. Investing in different sectors and in companies at different stages of growth can help reduce risk and maximise returns over the long term.”
To date, The Fold has raised £10m through investment since it was founded in 2011, with sales of £16m last year.