BETA
This is a BETA experience. You may opt-out by clicking here

More From Forbes

Edit Story

Surge Of Female Entrepreneurs Thanks To Crowdfunding

This article is more than 8 years old.

Venture capital has let women-led companies down. Since 2005 only 9.7% of US venture-backed founding teams included a woman. However, things are about to change. Crowdfunding has seen a surge of female-led companies and women are standing out both as entrepreneurs and investors. Welcome to the future of early stage finance.

A recent research report by Compass identified that currently only 10% of entrepreneurs in the UK are women. A large percentage of companies I come across have been founded by men (SyndicateRoom included). However if you look at the companies that perform the best, the percentage changes and I see many more with women as founders or co-founders, anecdotally suggesting that having women as founders increases the likelihood of success (a completely unproven and non-scientific suggestion, I might add). However, as Nick Beim highlighted, the following handful of companies all had female founders and together are now worth over £38bn – Epic Systems, VMWare, Eventbrite, Theranos, Genomic Health, Net-a-Porter, Lynda.com, Gilt Groupe, Minted, Care.com and Houzz.

Successful women are leading the way with examples including Sherry Coutu CBE as one of the most successful and driven entrepreneurs, investors and policy-influencers and Dame Barbara Judge recently being appointed new chairman of the Institute of Directors.

Our first recruit was a woman. This was not a conscious decision on our part; the job was offered to the best applicant regardless of the applicant’s gender. The best part is that we have been proved right as the team member has climbed the ranks and is now leading the largest team within SyndicateRoom. So far, we have recruited almost 2 women for every man in terms of full-time employment. Compare this with most financial services companies and the difference is striking. However, this has not been done consciously. We have just happened to be having outstanding women applicants. In fact, I can tell you that I couldn’t care less for men/women quotas or percentages. I care for a high-performance team that is innovative, loves what they are doing and feels great working for SyndicateRoom. If it happens to be 60/40 or 40/60 women to men, the ratio is absolutely meaningless to me.

The result, however, is another matter. More than 50% of the businesses currently raising funds on SyndicateRoom have a female founder or lead investor, chiming with the make-up of the team itself. Compare this with the just 9.7% of US venture-backed companies having female-founders and it’s refreshing to see how crowdfunding is attracting women into the world of finance. Female-led companies currently raising finance via crowdfunding include Bactest, which won Business SME of the Year award under the leadership of Chief Executive Professor Annie Brooking. Another female-led company currently raising finance via crowdfunding is Info-CTRL, a tech company with a female CEO.

Yet another example is Fertility Focus, whose lead investor Christine Soden has spent most of her career as CFO of several medium-sized businesses in the life sciences sector. Christine commented how in her 35 year career times have changed enormously, from being the only female in a room in the 1970’s to being surrounded by a team of highly-motivated, competent and successful women and men. Christine adds how fantastic it is to see how many women are coming up with great investment ideas and how many are taking leading roles in businesses.

Christine added, “I feel the advent of newer funding methods, such as crowdfunding, has brought early-stage investing to a much wider audience, particularly women. Being able to review investment opportunities through the websites in an unhurried and less pressured way certainly appeals to me. Companies such as Fertility Focus fit the bill well for me - a great business targeting a real social and medical need where the advances in technology can allow a small team to target huge markets“.

As far as crowdfunding industry leading figures, it’s hard to beat Julia Groves, current chair of UK Crowdfunding Association and also CEO and founder of the Trillion Fund crowdfunding platform.

On the investor side, an increase in women investors has led to the creation of Angel Academe, one of the Business Angel Networks working in partnership with SyndicateRoom, which is a “pro-women (but not women-only)” angel investment group. The group says that most, but not all, of its angels are women and that they support ambitious women-founded and led technology businesses. Sarah Turner, the cofounder and CEO of Angel Academe said, “Women now control half the net wealth in this country, we have more women entrepreneurs (and MPs!) than ever before and we know from the evidence that diverse teams make better decisions, so why aren't there more female angel investors and why aren't more women-led startups getting funded?  We're addressing that at Angel Academe by creating a different type of angel group: one that's more collaborative, more emotionally intelligent, and more fun."

But how does it compare with traditional financial services? Well, I’m writing this article as I fly back from a well-known global conference on finance. At the session immediately after my presentation I counted the number of attendees – 374 attendees; shockingly only 7 were women. I will be looking forward to the next crowdfunding conference where I know the ratio will be refreshingly different.

It is clear that crowdfunding is leading the way in changing the trend of the male-dominated world of finance and that is to be welcomed and celebrated.