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How This Accelerator Is Creating More Women Investors

Operating on a global scale, Angel Labs' programs and community are increasing the number of female angel and VC investors in 41 countries.

How This Accelerator Is Creating More Women Investors
[Photo: Flickr user Jes]

Funding is an essential part of starting and growing a business. The lack of it can stop an idea from becoming a product or service dead in its tracks. Even companies that have raised $1.3 million have failed before their second year, according to the most recent analysis by CB Insights. The fact that venture capital funding got even more scarce at the end of 2015, is a challenge to startups, particularly to those owned by women.

The National Women’s Business Council (NWBC) found that male founders start with twice as much capital on average as their female counterparts, and women-owned business are much less likely to get loans from banks or the Small Business Association. Snagging venture funding is equally difficult, in part because only 6% of VCs are women, according to Babson College’s Diana Report. Only 0.2% of black female founders, for example, received VC funding between 2012 to 2014, according to a study by digitalundivided.

One organization is attempting to equalize those numbers on a global scale. Angel Labs a San Francisco-based investor accelerator for individuals and executives worldwide is particularly focused on diversity and inclusiveness in tech investing. Getting more women investors can make meaningful change for women-owned businesses all over the world.

As a female investment banker, Angel Labs executive director Tugce Erul understands the problem inherent in this firsthand. She tells Fast Company that one major stumbling block is that there are usually two ways to break into venture capital: Either have a background in investment banking or financial consulting or have a successful exit as an entrepreneur.

"Both of these pools have very few women to begin with," she says, "There are fewer female-founded companies, which means fewer women have the money to recycle back into startups." Ergul also notes that dealmaking is common among friends. "These circles have traditionally been male," she explains, "so it can be a little harder for women to break into deals as they’re happening."

Ergul says that as a U.S.-based organization, it is easier for Angel Labs to make a difference in the States. However, she reports that as the programs have gained traction, they’ve added 68 cities in 41 countries and amassed a community of 6,000 people globally. Over 4,000 have become angel investors, VCs, or limited partners. What’s more striking is that the overall community is 47% female and 44% of the people who went through the programs are women. Of the 41 chapter managers, 18 are women, 11 of whom are Latina. However Ergul reports that black investors only make up 8% of the total number.

She notes that Angel Labs isn’t currently tracking LGBT numbers, in part because of cultural pressures in some of the countries the organization operates in. Ergul does say that its diaspora programs and "Diversity and Inclusion Breakfast/Dinner Series" are some of the most successful ways to recruit investors of diverse backgrounds.

Last year, Ergul says that Angel Labs was aiming for at least 30% female representation at its events in emerging markets where women were not traditionally involved in entrepreneurship or investing. She was surprised when the audience at an event in Qatar was at least half women.

She’s confident that the exposure to opportunities will set more women on the path toward becoming investors. Ergul points out that successful angel investing is a great way to prove yourself. "You have your own deal flow and you can show the results of how you make decisions," she explains. Once others can see an investor’s thought process and how they structure these deals it gives them a leg up. "We don’t want anyone to ask permission [to become an investor], just do it and prove you are good at it," she maintains.

Tania Marinich is currently making this happen for herself and her country. As Angel Labs chapter lead in Belarus as well as the founder and CEO of Imaguru, the country’s first startup hub and coding academy in Minsk, Marinich tells Fast Company that she’s also building the first Business Angels Network and facilitating access to capital for startups. 

"It is absolutely a hands-on experience coming from a reputable, global network which is truly hard to get when you just start building the ecosystem," Marinich says, adding that she hopes the work with Angel Labs will lead to building capacity for the creation of the first venture fund in Belarus. 

Marinich and her female cohort face similar challenges as most investors in the country have private equity and banking investment background and are predominately men. "I am very familiar with it having worked for eight years for International Finance Corporation," she says.

Women’s entrepreneurship is still less widespread than men’s in Belarus, she reports, as only a quarter of companies have a female executive. Still, she’s optimistic that despite women’s under-representation in angel groups globally, things can change quickly, at least in Belarus. "As investors and board advisors, women bring a different set of experiences and business connections to the table which help diversify resources available to entrepreneurs," she says.

Although she says it’s hard to say how many businesses have started in Belarus and how many of those have been either funded or started by women, Marinich says is that the pre-accelerator TechMinsk based at Imaguru's Startup Hub produced 170 startups in the last three years. Twenty-nine percent of these were founded by women, she says, and of the estimated 3,000 founders who participated at all Imaguru activities including training programs, study tours, and conferences, 26% are women. 

Ergul says the biggest problem Angel Labs is hoping to solve isn’t just that they want to be a source of amazing investors, but to get more women and minorities in the game. "We want to focus on pipeline problem," she says, "And make sure women feel like they can have access."

This is taking hold in Belarus and reverberating across Eastern Europe. Says Marinich: "I and my cofounder Anastasiya, in cooperation with Angel Labs, are leading the game in the country."

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