With few female angel investors, signs of change

October 25, 2011

In the traditionally male world of angel investing, Ed Reitler is used to having his voice heard. A partner in Reitler Kailas & Rosenblatt LLC of New York City, he’s also the founder of the ARC Angel Fund, a New York-based investing launched in 2010. So when he says that it’s “incredibly important” to develop female angel investors because “they are crucial to ensuring the funding of a more diverse group of companies,” you’d hope his male counterparts would take notice.

After all, Reitler’s got a point. A 2006 report by the Ewing Marion Kauffman Foundation on women and angel investing concluded that “women entrepreneurs gravitate to women angels,” and that those benefactors “look at more women’s start-up businesses than some of the more traditional [male] groups do.”

That also explains why Reiter serves as a male mentor to the Pipeline Fellowship, a group that trains women to become angel investors through education, mentoring and practice. Its young founder and CEO, Natalia Oberti Noguera, is a lady on a mission: to change the lopsided ratio of male-to-female angel investors, and get female angels involved in finding and supporting female entrepreneurs.

In a new report from the Center for Venture Research at the University of New Hampshire, author Jeffrey Sohl outlines how women represent just 12 percent of all angel investors, and women-owned ventures account for 12 percent of entrepreneurs seeking angel capital. Of these ventures, about one in four received angel investment during the first two quarters on 2011.

Low as those numbers look, they were actually higher in 2010, when 13 percent of angels were female, and women-owned ventures accounted for 21 percent of entrepreneurs seeking angel capital.

Less than two weeks after the Center for Venture Research released its findings, Oberti Noguera hosted an event in New York City on Oct. 20 to announce that Pipeline’s 2011 fellows would invest $50,000 in PhilanTech. Based in Washington, D.C., the company produces an online grants management system for foundations, nonprofits and corporations.

Combined with another $55,000 from the Pipeline Angels alumni network, that means $105,000 in fresh capital for a company that had struggled to gain investment traction — even though PhilanTech’s founder, Dahna Goldstein, was lauded by Bloomberg Businessweek as one of 2009’s most promising social entrepreneurs.

PhilanTech, launched in 2004, helps recapture a portion of the money nonprofits and foundations lose to a morass of paperwork. (Think two dozen different forms for two dozen different grant applications.)

That waste now equals $6 billion annually, or 13 perent of all grant money. But to hear Goldstein tell it, the male-dominated investment world simply didn’t get her idea — even when her sales roughly quadrupled over a one-year period.

The women of Pipeline Fellowship did, though, and funded PhilanTech with an amount that surpassed her total 2008 sales. Lesson learned? “Companies creating value should have equal access to capital, regardless of whether they are led by men or women,” Goldstein says.

Enter Oberti Noguera, 28, who is fluent in four languages and was named last year to Forbes’ Top 20 Women for Entrepreneurs to Follow on Twitter. While she may be a self-described feminist, she also realizes that male mentors have an important role to play in her work.  To that end, half of the 10 mentors for the 2011 NYC Pipeline Fellowship are men.

With its New York-based fellows, Pipeline Fellowship selected 10 women, each of whom paid $1,000 tuition and put up $5,000 each to fund a woman-led company picked by the group as a whole. (The tuition is now $3,500.)

One of those fellows, Jessica Roazzi-Magoch, says that she’s learning “how to tie my main core beliefs into dollars and cents. Pipeline is helping me measure where that return on investment is — with both the money and the social impact.”

Roazzi-Magoch, a former retail vice president at Atlantis Health Plan, came to Pipeline with some experience in philanthropy. She co-sponsored a New York “Wine, Women and Wealth” event that helped other women learn some basic rules of finance. In the process, she helped raised $10,000 for First Step, a job training program that helps homeless women get back on their feet.

What that event taught her is that women like her aren’t alone in wanting their wealth to work for a greater good. Still, it takes effort finding a community willing to put its money where its hearts and minds are, on behalf of other women trying to make a difference.

“I have done a lot off charity in the past and given a lot of money away, but this is a chance to bring the two together,” she says. “Sometimes it’s difficult to know how to have an impact. If you put aside even a couple of dollars, you’re making an impact. But if we can get more women [involved], that will not only have an impact: That will be exciting.”

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