Cambridge, 19th May 2015
Women thriving in the crowdfunding sector
Crowdfunding is one of the business and investment world’s hottest sectors these days, with hundreds of new businesses gaining the funding they need from individual investors via crowdfunding platforms like Crowdcube and SyndicateRoom.
The head-turning growth in this arena has been great news for the UK’s entrepreneurs and business leaders, as well as experienced individual investors looking for exciting new places to invest while securing the world’s most generous tax breaks for supporting startups and fast growth businesses.
In addition, crowdfunding has seen a surge of female-led companies – both as entrepreneurs and investors. Although traditional business finance and investment appears as riddled with glass ceilings as ever, crowdfunding is a force for change, enabling women to take advantage of an environment where merit is all, and old prejudices have no footing.
There is huge room for improvement, as underlined by recent research by Compass that identified that currently only 10% of entrepreneurs in the UK are women.
The crowdfunding phenomena of the last few years seems determined to change that. One of the ‘Big Three’ crowdfunding platforms in the UK – SyndicateRoom – appears to be leading the charge. More than 50% of the businesses currently raising funds on the platform have a female founder or lead investor, chiming with the make-up of the SyndicateRoom team itself which is more than half women. Goncalo de Vasconcelos, CEO of SyndicateRoom, said “I employ the best candidates, and it just so happens that over 50% of these have been women. It’s refreshing to see how crowdfunding is attracting women into the world of finance”.
‘Frugl’, a young business seeking investment on SyndicateRoom, is a great example. Already named by Buzzfeed as one of the “22 Apps Every Londoner Must Have”, the founder and CEO is Suzanne Noble and the lead investor is Stephanie Allen, who holds formal mentor roles with a number of the largest startup accelerators and incubators in the tech sector, as well as working with enterprise charities seeking to make funds and opportunities available to small businesses.
Suzanne Noble said, “Research has shown that women investors are, by nature, more risk averse than their male counterparts. What that tells me is that if a woman decides to invest her money in a business, it's because she genuinely believes it has a real chance of success. I find that enormously flattering and, it goes without saying, makes me even more determined to do the best I can."
Another female-led company currently live on SyndicateRoom, Bactest, won Business SME of the Year award under the leadership of Chief Executive Professor Annie Brooking. 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 science sector. Christine said "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 is really exciting. 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“.
The UK’s leading crowdfunding trade body – the UK Crowdfunding Association – is currently chaired by Julia Groves, who is also CEO and founder of the Trillion Fund crowdfunding platform.
On the investor side, increasing numbers of women are getting involved and organised. Angel Academe, one of the Business Angel Networks working in partnership with SyndicateRoom, is a “pro-women (but not women-only)” angel investment group focused on technology. 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."
One of the businesses that Angel Academe has invested in is Abundance Generation, another crowdfunding platform that makes it easy for anyone to invest in renewable energy projects for attractive steady returns. Abundance was cofounded by Louise Wilson, a former senior investment banker at UBS. She said, “my motivation for creating a crowdfunding platform was to make sure that peoples’ values and their priorities are placed centre stage not second best to a narrow idea of investment return".