There is a substantial gender deficit in the world of business investment, according to a new report by the UKBAA, with women continually deterred from entering the traditionally ‘male’ world of angel investment. In the light of International Women’s Day, the ‘The Barriers and Opportunities for Women Angel Investing in Europe’ hopes to highlight the challenges women face when making a mark in the finance industry.
The report found that women were offered very little advice on how to get into angel investing by the financial advisory community or financial media, with many financial advisors assuming women prefer investments with a lower risk.
Whilst the financial advisory community may be seen as a key means to enable women to identify the opportunity to back small businesses, the majority of women investor respondents to the survey said that the advisory community directed them towards conventional and deemed low risk areas of investment such as stocks and shares, followed by bonds and pension funds.
A much smaller group of women were advised about the opportunity for investing in small businesses and the relevant tax breaks offered in the partner countries concerned. 136 of the women surveyed said they hadn’t tried angel investing because it seemed too risky compared to stocks and shares.
One UK female investor said, “My financial advisor assumed, as a woman, I was risk averse and I should look at safe options. He never mentioned Angel investing or the EIS tax relief scheme.”
According to the report, a significant number of women respondents also felt there was an image presented in the media an press of – usually male – business angels being extremely rich and highly successful, meaning few women feel they have achieved sufficient success or wealth to participate.
136 of the women surveyed also admitted to having other financial commitments and family priorities, with 67 saying they have no control over the family finances.
Getting more women interested in angel investing could be beneficial for female business owners too. Women investors have a strong track history of backing other female founders or co-founders with a majority (54%), of those who invested in women-founded businesses having invested in at least one company founded by women, with nearly 20 percent having invested in 3 to 10 women founders.
This compares to only a small minority of male investors who choose to back businesses led by women. If nothing else, it is this highlights the importance of enlarging the pool of women engaged in angel investing in the coming year.