In part one of our two-part series on four Austin women helping close the gender gap in startup investing, these leading women share what they look for in potential investments and the different perspectives they bring to the field. Here, they get candid about misconceptions the industry holds against women and offer their top advice for women — and men — interested in joining them.
Claire England serves as executive director for Central Texas Angel Network (CTAN), which recently announced a record setting number of investments in Texas and abroad for the first half of 2017.
What's a misconception the tech industry holds about women VCs and investors?
There are a number of misconceptions in the tech industry and in venture capital; they’re not limited to being a woman. In venture capital, there’s the misconception that you have to have an MBA/finance background — preferably from one of the top 10 schools — to do this work. What I find curious about this misconception is that investing is fundamentally a relationship business.
I suspect the tech industry and venture capital in general would be better off and start defeating some misconceptions if it was more diverse in every way, not just gender and ethnicity — though clearly traditional diversity is where we have the most work to do.
What's the best piece advice you would give to women entrepreneurs and women interested in becoming investors?
Conquer your fears. Many women entrepreneurs and potential women investors are afraid of the investing side of the table. For example:
“As a woman entrepreneur, do I really know what I’m doing?” Yes. You’re building this company, so you know the business, and you know your value proposition. You need to own it and balance your perceived gaps with great people who complement any weaknesses.
“Sometimes I feel out of place here. Am I a fraud?” Everyone feels like a fraud at some point. It’s known as imposter syndrome, and it happens when you push yourself out of your comfort zone. Another word for this is growth.
“Do I really want to raise money in an industry that’s dominated by men who may not understand my value prop?” Well, who does? But since that’s much of the present reality, the best you can do for your business is arm yourself with information and cheerleaders. Learn everything you can about fundraising — read books, listen to podcasts, attend workshops — and seek out mentors who will lead you through the process, such as other women entrepreneurs who’ve successfully fundraised for their company.
“I qualify as an accredited investor, but I’m afraid I won’t know how to invest.” Sure, and many men who are new to startup investing feel the same way. The absolute best thing you can do is jump in and get involved with an angel group or a small fund that let’s you learn alongside other investors. You don’t have to invest immediately; just learn the process. Listen to the issues others bring up. Ask questions.
Dr. Sara Brand & Kerry Rupp
Founding partners Dr. Sara Brand and Kerry Rupp launched True Wealth Ventures in 2015 specifically to invest in early-stage, women-led startups.
What's a misconception the tech industry holds about women VCs and investors?
Brand: I don't know if the tech industry has a misconception about women VCs. There probably aren't enough women VCs out there to develop a statistically significant misconception about! That said, there is a misperception that 5 to 10 percent of VCs are women and that this number is increasing each year. The truth is that once you remove the general counsels, CFOs, interns and admins, the estimated percentage of women VCs making investments decisions is around 1 percent.
Rupp: Well, there are few women in VC, so I’m not sure that there even are many common perceptions. So instead I’ll share some data: According to recent research by Paul Gompers and Sophie Wang at Harvard Business School, having more women in venture capital firms "improves deal and fund performance.” This isn't all that surprising if you are familiar with other research showing improved financial performance at companies with more women in leadership positions, and the better performance, in general, of any team with more women.
What's the best advice you would give to women entrepreneurs and women interested in becoming investors?
Brand: The best piece of advice is that we need more women entrepreneurs and women investors taking leadership roles and making investment decisions because their diversity of perspective leads to more innovation and better financial returns. I think women need to understand not only the value they have as entrepreneurs and leaders, but the power they have when they make investment decisions — from every purchase online to every investment in their savings account.
Rupp: Know your worth. As noted previously, teams/companies/funds with gender diversity perform better. Remember that you bring unique value to the environments in which you contribute. And don’t forget to capture that value by not underestimating your own experience or capabilities, and not undervaluing your contributions, whether that be in seeking roles, negotiating compensation, etc.
Kelsey August
Kelsey August, founder of direct marketing company Lone Star Direct, has been an active angel investor since 1998. She joins England at CTAN as a board member, and has served as president of the American Marketing Association and The Entrepreneurs Organization.
What is a misconception the tech industry holds about women investors?
Personally, I have not felt any inequalities between men and women tech investors. Now of course I live and mostly invest in Austin. When the management team is raising funds, they don’t care about gender. Money is green no matter who they raise it from.
What is the best piece of advice you would give to women entrepreneurs and women interested in becoming investors?
Surround yourself with other investors who will work together in the due diligence of an investment. Partner with folks who bring different skill sets to evaluate potential deals. Look for an angel investment group to join. I use to fund many companies as an individual. It cost me much time and many financial losses.
Images provided by participants and social media.
