In 2013, when Heidi Zak was looking to raise money for her company, ThirdLove, she would have preferred some female investors. She was selling bras, after all, and her innovation was offering half sizes--something that someone who'd never had to fit a bra might not readily appreciate. But Zak quickly realized that sorting potential investors by gender was no way to get a company off the ground. "You can't raise a round saying, 'I have to have a female on my board. You'll just shut yourself out,'" says Zak.
That was five years ago, and while raising money is still hard for almost every entrepreneur, there's a growing sense that it's getting easier for women at long last. Female founders can find an increasing number of options, including new initiatives aimed at making it easier for women--especially those who want to have women investors in their company. In particular, efforts such as Portfolia, SheEO, and Pipeline Angels are actively persuading women to invest in other women.
Notably, women entrepreneurs are stepping up to the plate: In a survey of 279 U.S. women entrepreneurs conducted jointly by Inc. and Fast Company, a surprising 42 percent said that in addition to running their own companies, they made personal investments in startups. On the flip side, of those who had raised outside capital, 38 percent said they specifically sought out female investors.
Although Zak wasn't able to persuade women to join her seed round in a big way, when she raised her $8 million A round in 2016, she was able to include a number of notable women, among them Lori Greeley, formerly the CEO of Victoria's Secret (and now CEO of Serena & Lily), and Claire Bennett, chief marketing officer for InterContinental Hotels Group.
As of November 2017, according to the Angel Capital Association, 22 percent of angels are female. That percentage may sound low, but it's a lot higher than in the venture capital industry, where only 9 percent of decision-makers are female, according to Crunchbase. And the trend is upward: Of the angels who began investing in the past two years, 30 percent are female. These women are more likely to consider the gender of the entrepreneurs they back than men are: 51 percent of female angels say an entrepreneur's gender is "highly important" to their investment decisions, compared with 6 percent of male angels.
But more experienced angels tend to write bigger checks than newer ones. That may explain why women's check sizes are somewhat smaller: $26,500, on average, compared with $37,700 for men. Zak was looking for angels who could write larger checks--starting at about $100,000. She knew it would be easier to manage her investors if there weren't too many of them. And she was looking for individual angels, not those who invested through an angel fund or group. "I want individuals who are going to add value, and who I have a personal relationship with, that I can call and text with," she says.
Zak is among those who have joined the leagues of angel investors, writing early checks for startups such as clothing company MM.LaFleur; Birdies, which makes high-end, fashionable slippers; and Sustain Natural, which makes condoms marketed to women. "I write small checks, but I treat it as if I'm an adviser," she says, declining to specify the amount of her average investment. "So I'm not just writing a check."
Regardless of the size of the checks they can write, she sees a real need for women entrepreneurs to step in and invest. The women angels Zak was able to bring in, she says, have had impressive corporate executive careers and have an "incredible" perspective to offer.
"That's different than someone like me who has started and scaled a company to 300 employees in five years," she says. "There are a zillion things, a zillion questions--from payroll to taxes to marketing to human resources--that only another founder knows how to help you answer."