Women Speak
Why are most business angel investors men?
I have been asked to join a working group being organised by The Birmingham University to find out why women seem to be so risk averse when it comes to investing in small businesses.
I would be interested to know if you have any comments about this.
I would be interested to know if you have any comments about this.
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Replies to This Discussion
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Permalink Reply by Sarah Greenwood on -
Its an interesting question and I imagine there are infinite reasons for this but my thoughts are;
- That traditionally women are the main care givers where children are concerned and the percieved risk versus perceived stability/security of a PAYE job is often going to be the winner.
- Higher levels of testosterone in men can add to the risk taking and competitive behaviour, young men take risks in all areas of their lives from driving their cars as fast as possible, to competitive sports to breaking the rules at work to get better results than their counterparts.
- We live in a society where competitive or risk taking behaviour is not seen as feminine or desirable qualities in a woman. I see parents of young boys let them run around and shout and touch things they shouldn't and be silly but parents with young girls insist they keep the noise down, sit still and stop messing around and act in a more mature way.
- from personal experience whilst managing a team of people in a mortgage brokerage a few years ago, women at top levels are still required to wear skirt suits. Whilst some men still think that women are decorative objects to adorn an office rather than to work alongside men as their equals making difficult decisions and managing people, budgets, data etc, it is made all the more difficult to progress. Although thankfully this old school train of thought seems to be slowly on the way out!
Is this the sort of comment you were looking for? I hope it is of use to you!
Regards
Sarah x.
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Permalink Reply by Patricia Christine Sutton on -
Sarah,
Your thoughts on this are very interesting. In my experience the women I do know who actively invest in businesses are much younger and are usually already making a lot of money in their own businesses and want the excitement, the satisfaction and the challenge that comes with this type of investment; where as many of the men, (but not all), are retired and are just doing it for a chance of a good return.
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Permalink Reply by Maxine Clancy on -
I think there are women out there who invest in small businesses. They just might not shout very loudly about it.
I do think women take risks, albeit they may have different criteria for weighing up their risks.
Possibly there is a niche in the market here... Women investors for Womens projects.
I also think as Sarah pointed out that women in general will be the main care giver, even if they are working full time and have their own business. With that in mind, they tend to focus their energy into two things, their business and their family, and therefore might not have the time to invest in projects where their energy might be needed.
Hope thats helpful.
Maxine
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Permalink Reply by Janet Stevenson on
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Hmm! I know that women earn less than men (full-time and part-time), that there are fewer female than male managers and that there are fewer women in highly paid jobs than men. Therefore it follows that there are fewer women with money to invest than there are men.
Janet
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Permalink Reply by Wendy Lovelace on -
The question involves women investing in small business, while my work experience deals with women investing in land. Over the years women have become more and more active in land investments although even now most of my clients are men. I have found that there are a few trends in regard to why, most of which have been covered by the other posts in this forum.
-1 Investments and finance have traditionally been male sectors. It's taken time for women to step into these arena's, but it is happening, and more and more women today are breaking down these barriers.
-2 As one of the few women in land sales for a long time I found a tendency for men to use social environments to network, places women generally don't feel comfortable stepping into and places that are still reserved for "the good ole boy network". For example, many of my associates make their contacts on the golf course or at clubs.
-3 I've met many women who have dominant male partners. These women choose to let the men make the big decisions in the household.
-4 Emotional sales vs analytical sales. While both men and women can go into investing for emotional or analytical reasons, I've seen women allow their emotions to override their logic, even when the opportunity presenting itself was a good one.
-5 Insecurity. Women can be hard on themselves. Since investing is something new, they can defeat their own desire to get involved because of fear. Understanding mistakes will happen and that poor decisions are a normal part of growing in the world of investments is important.
-6 More women need to realize that they ARE cut out for investments. They don't need to take on preconceived notions that one needs to be overly aggressive and a big risk taker to be successful at it. While there is a degree of risk with any investment, it's OK to step into the waters slowly and in small ways. This allows you to build your confidence and understanding of how the world of investments work.
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Permalink Reply by Annabel Kaye on -
I made my first investment in someone else's business quite recently. i was never risk averse, but while my kids were growing up I did not have spare money other than that I invested in my own business.
If I make more now I will invest more now. No change to my personality!
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Permalink Reply by Katy Draper on -
Hi Pat I have a couple of investments and I must admit it took me a while to make those, and I am still very careful about the risks I take. I found it quite hard for investment groups to take me seriously as an investor, that may be because I'm a bit younger than most of them though, not because I'm a woman. Giving money to people you don't know well, when you are starting out, with very little experience is quite terrifying - how do you spot the winning deals? However I have experienced no discrimination from the companies, the colour of my money and the skills I offer companies are appreciated. I have joined the management team of one of my companies and have since helped them to raise further equity through vc funds and the experience has been wonderful. I have grown so much professionally and personally through it.
I think that most of them are men because more of them have the money!
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Permalink Reply by Claire Attwood on -
This is a subject that interests me too. Although the majority of my clients are men at the moment, the handful of women I work with on a business level tend to be running their own businesses, or filling directorships. Without fail they are the main breadwinner in their family, and have children. In general (though it is difficult to generalise) I find women tend to have worked their way up to their position from a lower start than their male counterparts, and tend to view their capital as hard earned, rather than easy come easy go. I find women who are in a position to invest tend to be more cautious in their outlook, even if they have invested in their own business. They also, and this may be the crux of it, have lower expectations of their investment return generally, and are therefore happier with securer investments which generate mediocre returns.
It's just my opinion, but I suspect that women are circumspect about investing because their first concern is financial security - our role models (our mothers) managed the household budget, and made the money last, and we can still remember how hard it was to earn the money we have. I tend to find women take longer to make financial decisions also.
However, an interesting behavioural trait amongst my clients is that a male client will frequently defer to his wife for a final decision on a financial matter, however women rarely do so, making the decision based upon their own judgement.
In summary, I think women often take financial commitments more seriously than men, but have fewer resources to fall back on for advice and support in making financial decisions. The financial world is still a very male dominated arena, and there are very few female advisors as yet.
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Permalink Reply by Annabel Kaye on -
Interesting. I have known some very bad women IFAs (and men for that matter) I am not sure gender is a guarantee of a good and appropriate strategy! I do think the old investment vehicles are outmoded and we ought to be looking at old fashioned credit unions, micro financing and local cooperatives to finance our own businesses without paying a 3rd party institution's commissions! I think the new generation IFAs need much wider horizons and a broader skill base than the current licensing/examination system envisages.
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