Angel Insights podcast

Women Are Underrepresented in the Investing World. How Can We Change This?




2 min read

According to a 2013 study by Fidelity Investments, women save 8.3% of their salaries, compared to the 7.8% saved by men. Furthermore, according to Betterment’s data, they also signed into their investing accounts 45% less often and changed their asset allocation 20% less frequently than their male counterparts. So why were only 13% of angel investors female in 2012? That number rose to 21% in 2013, but the gender imbalance remains. In our interview with Alicia Robb, we uncover the 3 dominant reasons why women are not entering the world of investing and reveal two tactics that can be employed to improve gender equality in the investing ecosystem.

3 reasons why women haven’t flourished in the startup ecosystem
  1. Bias

    Even Paul Graham admits to falling in love with founders that resemble Mark Zuckerberg[link]. Assuming that a big part of that connotation lies in the founder’s frequency of past exits, there are arguably fewer women who come to mind – at least for now. It’s the same superficial psychology that makes your ex’s lookalikes attractive. As a result, far fewer women achieve VC funding, making them generally less successful in the startup ecosystem overall.

  2. Connections

    In the early stage investment industry, most deal flow comes from referrals from trusted investment sources. In our interview, Alicia comments that ‘Often we [Elizabeth Kraus and Alicia] are the only women in the room’. Investment started out as an ‘old boys’ game, and, as they say, old habits die hard. This has made it notoriously difficult for women to break in, and to make connections who provide that vital source of deal flow.

  3. Confidence

    The Wells Fargo Affluent Women Retirement Survey showed that a startling 49% of affluent women do not feel confident when investing, which is, again, a likely result of the territorial ‘gentlemans’ club’ mentality attached to the industry. Ironically, this risk avoidance is part of what makes women better investors: The aforementioned study by Fidelity Investments showed that women tended towards more balanced portfolios, which should always be encouraged.

2 Ways To Get More Women Investing
  1. Invest in female entrepreneurs

    Most business angels are former entrepreneurs. That’s what makes them a fantastic source of smart money[link]. It makes sense that entrepreneurialism and investing are intrinsically linked; when more female entrepreneurs receive early stage funding, more will see their businesses prosper, and will go on to re-invest the profits back into the startup ecosystem. To do that, we need to remove that inherent and superficial bias towards male founders

  2. Investing Programs

    For those who lack confidence in their investments – many of whom, unfortunately, seem to be women – there may be a practical solution. By syndicating those people into an investment network, programs like Alicia’s ‘Rising Tides’ program spread the risk across all parties, promoting confidence. That same syndicate then acts as a network of connections, providing that invaluable deal flow. Moreover, many programs offer an educational element, with lead investors guiding, mentoring and advising the network.

Gender in the investment industry has media outlets for years, but one simple solution remains, Support. As an ecosystem, we must remove historic biases and actively support female founders and investment, whether that means investing in their startups or improving their confidence as investors.


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