Business women prove reluctant angels by sdfgsg234

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                              Finance
                              Business women prove reluctant angels
                              ACCORDING TO Finance South East,                                                                        company Go Beyond and a          relax with like-minded women and
                              the UK is home to more women                                                                          board member of the                have an adult conversation,” she says.
                              millionaires aged between 18 and 44                                                                  European Business Angel             So when Hastings started approaching
                              than men. Despite this, less than five                                                            Network (EBAN), agrees that            family, friends, pregnant women and
                              per cent of business angels are female.                                                         getting a broader and more diverse       new mothers for investment, they
                              Sally Goodsell, CEO of Finance South                                                                group of people—including            immediately understood the concept.
                              East, believes new businesses are                                                                    women—to invest in and              With the first club due to open in
                              missing out on a huge area of                                                                         mentor new businesses is           Putney, south London in March 2008,
                              potential funding, while wealthy                                                                       worthwhile. “More and more        Hastings has so far raised £750,000 in
                              women are missing out on an                                                                            women are becoming                start-up capital. One-third is debt, one-
                              exciting and potentially                                                                                entrepreneurs but not            third is from venture capital fund
                              lucrative form of investment.                                                                            investors,” she says.           Trapezia, the UK’s first VC fund
                                 So why aren’t there more                                                                                 A business angel herself,    backing women entrepreneurs, and
                              female investors? “Women                                                                                  Baumann says you don’t         one-third from individual investors, of
                              don’t have the same social                                                                                have to invest huge            whom 95 per cent are women or
                              and business networking                                                                                   amounts. She started by        women making the decision for a
                              opportunities as men,”                                                                                   investing the equivalent of a   couple.
                              claims Goodsell. “Men                                                                                     few thousand pounds here          But, as she points out, although
                              often discuss business deals                                                                              and there in the businesses    many of her investors are female, she
                              over a game of golf and                                                                                   of family and friends in       has not found it hard to get backing
                              women miss out on this.”                                                                                1982, when she was still at      from male investors for a female-
                              She also believes that a female                                                                       business school. “I’m a strong     friendly product.
                              investor may feel conspicuous                                                                        believer that you can be a micro       Susan James, founder of Art of
                              in a room where 95 per cent of                                                                                                           Accessorising, which sells fashion
                              other investors are men.                            “A woman entrepreneur will only ask for £20,000                                      accessories to women in their homes,
                                 In this vein, Finance South East is              when she really needs £100,000”                                                      has had a similar experience. She
                              launching a “Women Investing In                                                                                                          secured funding from a variety of
                              Women” scheme providing awareness                   Similar schemes have proved               angel,” she explains. “I have never        sources including a £100,000 start-up
                              events, training sessions and                       successful in the US. “Women will         invested more than €25,000 [£17,600]       loan from NatWest under the Small
                              networking opportunities to help more               come together, learn about investing      in one business at one time.”              Firms Loan Guarantee Scheme, savings
                              women become business angels.                       and perhaps do some investments             Baumann is driven by doing well          and private investors—including both
                                                                                  together,” says Goodsell. “There are      and doing good. “You have to make          men and women.
                              FACTFILE                                            lots of bright, intelligent women out     sure you have another reason to invest        “The gender barrier isn’t an issue,”
                                                                                  there and we want to show them the        besides making money—for example,          comments James. “I have been
                              ● There is unequivocal evidence that
                              women-owned businesses start with lower             risks and rewards of the market.”         you want to learn about the sector,”       successful in securing funding because
                              levels of overall capitalisation, lower ratios of      The scheme is also designed to help    she says. Baumann believes women           I have put in the preparation and the
                              debt finance, and are much less likely to use       women entrepreneurs—whose                 business angels can offer a lot more       groundwork. I found a gap in the
                              private equity or venture capital. The level of     businesses are on average funded with     than just capital. “Female investors can   market and I exploited the
                              start-up capitalisation used by women-
                              owned businesses is, on average, only one-
                                                                                  a third less capital than their male      act as mentors as well as conduits and     opportunity. Grit, tenacity and
                              third of that used by male-owned                    counterparts—by specifically              connectors,” she says.                     determination are part of the formula
                              businesses.                                         encouraging investment in female-           Karen Hastings, founder and              for success, whether you are male or
                              ● The UK Survey of SME Finances reported            owned firms. “We are trying to help       managing director of Cupcake, a spa        female.”
                              that women were charged more than men on            build confidence in women                 and private members’ club for
                              term loans (2.9 per cent versus 1.9 per cent).      entrepreneurs to ask for the money        pregnant women and new mothers,            Sarah Hanson
                              No other study has found such a large
                              difference and this result needs further            they need,” says Goodsell. “A woman       says the practical advice on product
                              research and explanation.                           entrepreneur will only ask for £20,000    innovation and networking offered by       USEFUL CONTACTS
                              ● Fear of debt is the single largest barrier to     when she really needs £100,000.”          female investors has been invaluable.      ● Finance South East
                              entrepreneurship for both men and women,               She believes it’s intimidating for a   “Some of them are based in areas           www.financesoutheast.com
                              although women are significantly more               woman to ask a group of male investors    where we want to open new clubs, so        ● European Business Angel Network
                              fearful than men.                                   for funds—particularly for a “female”     they have opened doors to potential        www.eban.org
                              ● Thirty-three per cent of women, compared
ILLUSTRATIONS: TONY SIMPSON




                                                                                  product. “A group of female investors     members and suppliers,” she says.          ● Promoting Women’s Enterprise
                              to 20 per cent of men, had used government          might be more understanding, saying         The idea for Cupcake formed from         Support www.prowess.org.uk
                              programmes to fund their business start-up.
                                                                                  ‘I’d use that product’ and see the        Hastings’s own experience of               ● Go Beyond www.go-beyond.biz
                              ● Female angels invest an average £20,000
                              into start-ups compared with £17,142 from           opportunity where a man might not.”       pregnancy and first-time motherhood,       ● Cupcake www.cupcakemum.com
                              men.                                                   Brigitte Baumann, CEO and founder      plus feedback from her friends. “There     ● Art of Accessorising
                                                     Source: www.prowess.org.uk   of European angel investing services      was nowhere to go where we could           www.artofaccessorising.com

                              www.director.co.uk                                                                                                                                     December 2007   DIRECTOR

								
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