By Kailyn Lamb, Marketing Content Writer and Editor, PYA
The final event in the three-part “Opportunities on the Horizon” series was held earlier this week with a focus on “Women in Angel Investing.”
Held both virtually and in-person at the Knoxville Entrepreneur Center’s (KEC) office space downtown, the event gave an overview of angel investing as well as personal experiences from each of the panel members. The event was moderated by Catherine Porth, Director of Insights and Development at KEC and the Founder of Let Her Speak.
Although panelists were divided into two groups – current angel investors and women who have had their start-ups invested in – each person answered all questions during the discussion. Panelists included Karen Thomas, Chair of the Board of Directors of Women Can Be Angels in Nashville; Kristina Montague, Managing Partner of The JumpFund in Chattanooga; Tricia Martinez, Managing Director of Knoxville’s “Techstars Industries of the Future Accelerator;” and Erica Grant, Founder and Chief Executive Officer (CEO) Quantum Lock Technologies, a participant in Cohort 4 of the “Innovation Crossroads” program run by Oak Ridge National Laboratory (ORNL).
The “Opportunities on the Horizon” event series was put together by the Knoxville Chamber, KEC, and Innov865 Alliance. You can find our previous teknovation.biz coverage on the first event (“Angel Investing: What It Is”) here, and the second event (“Angel Investing: How To Do It”) here.
The third session began with a brief overview of what angel investing is, followed by each panelist talking about how they became involved. A study from the Angel Capital Association and Penn Wharton Entrepreneurship shows only 22 percent of all angel investors are women, and of new investors, women make up 30 percent.
“Angels, unlike later money, they tend to have more of a hands-on approach,” Thomas said. “They’re not just bringing a check. They’re bringing expertise, they’re bringing a network. They’re much more involved.”
Martinez added that investing is not “black or white,” saying some investors prefer to donate smaller amounts as a hobby. But finding one that is passionate about your company can make a huge impact. “Angels can transform an industry,” she said, adding, “It can be a true partnership.”
Both Montague and Thomas reflected on often being the only women in the room when it came to investing. “We just looked in our backyard and saw all men,” Montague said. Thomas added that angel investing isn’t necessarily something that’s taught in business programs, and much of what she learned was through word of mouth. Grant echoed that, but from the perspective of a start-up trying to find the right angel investor.
Panelists also opened up about some of the difficulties for women in the investing space. Montague said she has seen female founders be taken advantage of by investors. Both Martinez and Grant talked about the struggle of thinking investors may only be interested or uninterested in their companies because they are women-led.
Martinez also talked about her start-up days and how she would only work with investors that had gone through founding a company themselves. Because they had been through that experience, she felt that they were better able to empathize with her. She also added that both female founders and investors have more empathy in what they are trying to build and invest in.
“To me, empathy is the most important thing as a founder,” Martinez said.
There is also sometimes a double standard with women investors, panelists said. Because women worked so hard to get where they are, they can be harder on other women founders.
One study Porth mentioned showed that female-led companies make 70 cents of revenue for every dollar invested, whereas male-led start-ups only make 31 cents for every dollar. However, only 2.2 percent of VC funding goes toward women, Montague said.
“If nobody is investing in women, and they are outperforming men, let’s put some money in,” she added.
Many women founders are creating companies to solve the problems that they see every day. Because of this, Thomas said some women founders struggle to find funding because they are presenting their idea to men who may not understand the female lens. They distance themselves because they don’t see the market opportunity.
Martinez agreed, adding, “Imagine if women put their capital toward really early stage businesses that are making a real impact on the world, and solving really big problems. We would be so much better off, but we won’t know until more of us step up with our checkbooks and actually support those companies.”
Panelists also talked about how women were not traditionally in the finance space, and how some women continue to avoid it to avoid risk. Thomas said she knows many women who find donating to nonprofits to be a better option. However, she explains that with nonprofits, you know you won’t get your money back. But with investing in companies, there is a chance those companies may thrive and grow. People can also directly see where their money is going. “It’s much more intimate,” Thomas said.
Martinez added that failure in start-ups is not always bad; that company may still have had an impact. One start-up may inspire another.
“You indirectly created a huge impact within an ecosystem,” she said. “You also donated to a broader cause.”
All three sessions in the series can be found on the Knoxville Chamber’s YouTube Channel.