Starting with investment can be very intimidating and risky for those who don’t have a formal finance background but this does not have to be the case. There are many ways for women who want to start investing to get educated on the subject. I started to dig into the topic of investment and gender equity within it during my working stay in the USA where I also got inspired and founded Lumus Investment. Its priority is to educate women in their network on the ins and outs of investing in startups. Lumus mission is to bring more women into angel investing and in this way to inspire more female founders and support products serving the female market.
There are still some major problems with gender exclusivity in the finance world, especially when dealing with early-stage investing. In 2020, based on Funding in the CEE region report, only 1% of funding went to women-founded startups, 5% went to mixed-gender founding teams, while all-men teams raised 94%. According to data, however, female-founded startups generate more revenue per Euro invested than male-founded start-ups, and women-led businesses outperform in capital productivity by 96%. On the other side of the table, founders and decision makers are predominantly men. Of funds active in CEE, 85% of Venture Capital (VC) investment roles are held by men, rising to 93% at Partner level. In the CEE region, only 15% of angel investors are women. Among all angel investors only 15% are women. We need to create more diverse representation of investors because it will directly influence the diversity of funded startups.
Who are angel investors? They’re individuals who offer promising startup companies funding in exchange for a piece of the business, usually in a form of equity. They do it to increase their exposure to a certain sector, share their domain expertise with entrepreneurs, diversify their portfolio or just to stay in touch with ambitious people trying to disrupt industries. For many women, one of the reasons to invest is also to make a difference. Angel investing is a great way for investors to help companies in sectors they find important to grow. Angel investing is a very personal form of investing so angels are given opportunities to develop relationships, many times close friendships with the entrepreneurs.
Women who do not feel confident in the male-dominated investment world can gain the skills and knowledge on how to navigate and make the right investment decisions. The key is education and there are companies specifically targeted at educating you in investing.
Angel investing comes with some specific terminology, so to make it easy, we'll explain some basic terms here.
