Katherine Hague wants more women investing in startups.
The Female Funders founder stopped by Seattle’s Columbia City Club on Thursday morning for the final stop of her eight-city Female Funders breakfast series. She was joined by fellow female angel investors Gillian Muessig, co-founder of Moz; Outlines Venture Group Anne Kennedy; and Seattle Angel Fund Managing Member Susan Preston.
The group shared advice for female investors looking to make their first angel investment. Hague, who runs an online resource for both experienced and aspiring angel investors at Female Funders, wants 1,000 more women making angel investments by the end of 2016.
“Only 3 percent of deal-making venture capitalists are women, and this number has led to an even more troubling statistic — that only 2.7 percent of venture capitalist funding goes to female CEOs,” she noted today.
Hague raised cash from angels for her first company, an e-commerce platform for hardware startups called ShopLocket. She sold that company at just 23 years old and was named one of Canada’s Top 100 Most Powerful Women in 2014. She then launched Female Funders and Angel School, a boot camp for investors or entrepreneurs, to get more women interested in these fields.
“I have a special place in my heart for angel investors, and when I started last year I knew the gender balance would be off, but I wasn’t quite prepared for what it turned out to be,” she said.
Hague and the three experienced angel investors offered advice to the attendees — here are five key take-aways for those looking to make their first angel investment.
Do your due diligence
“Spend time with the entrepreneur looking at their documents, doing your own research into the market, making calls to customers or prospective customers, talking to other experts in the field,” said Preston, general partner for the CalCEF Clean Energy Angel Fund. “The more time you spend doing due diligence, the more likely it is that you will make a better investment.”
Mentorship is more important than money
Don’t just put money on the table and walk away: “I always tell entrepreneurs when I am teaching them about how to look for funding that money is the third most-important thing,” said Muessig, CEO of Outlines Venture Group. “The first most important thing is to select investors that understand and are passionate about your company.
“That can be through mentorship,” she added, “and using their experience to help you grow, but also opening up their rolodex and giving you contacts.”
Don’t invest in solo founders
“There are other people with intelligence and expertise that you don’t have, and I think it’s a mistake to invest in solo founders,” said Kennedy. “This is a theory I’ve had since way before the internet … the problem is it’s the wizards that think they can run a company and every time that is not true. It’s very important to have an executor.”
Look past your backyard
Most investors choose startups within three hours of their home — think bigger, Muessig said. “Geography is the worst reason to invest in a company,” she noted. “For heaven’s sake, it’s a globe — look larger.”
Muessig and Kennedy have invested in entrepreneurs across the U.S. and as far as New Delhi, India.
Do well by doing good and do good by doing well
“The things that motivate me are really about giving back,” Muessig said. “If I put my money here then a company will grow, people will be employed, their kids will be educated and well fed, they will spend their money, and the economy will grow. That’s a good legacy. I want to help and I put my money where I can help.”