By Nick Flores (Director, Investors' Circle) Hopefully you've seen the recent press, highlighted in established periodicals such as the Wall Street Journal and Inc., that cites a study focused on the role of women in angel investment organizations. The University of New Hampshire discovered that when these groups have more than 10% women in their membership, the number and/or size of investments increase, thereby dispelling the stereotype that female investors are more cautious.
Perhaps this is the reason why Investors' Circle, which is 28% female, has already funded 10 companies this year -- five of which are led by women. DailyWorth, MicroEnergy Credits, Drop the Chalk, Peepoople and Rrripple -– are led by amazing, inspiring women. Investors' Circle also works with organizations such as Women 2.0, Golden Seeds, Astia, Women’s Donor Network, and others, to make sure that we find more women like them.
The "impact investing" space in which we operate has recently become quite popular, and as a result, we're seeing an increasing number of high-caliber companies. Whatever the reason, Investors' Circle members continue to fund at least 25% of the companies selected to present at one of their Venture Fairs, the next of which will be held in Philadelphia, October 26 - 28, 2011.
Of course, the natural question that follows is “who should apply?” We try to be as transparent as possible about the types of companies we seek when we outline our Deal Criteria. The company must be committed to making a large social and/or environmental impact in one of the following six sectors:
- Sustainable Consumer Products
- Energy & Environmental Solutions
- Social Media & Software
- Health, Biotech & Wellness
- Community & Economic Development
Clearly that spans a lot of different industries, which is why we are narrowly tailored on early-stage companies that, ideally, have taken their product or service to market. Substitutes include established distribution channels, strong strategic partnerships, and existing contracts, letters of intent, or purchase orders. Companies that are looking for startup or seed stage capital in order to launch or further develop their business model are discouraged from applying.
The reason I urge entrepreneurs to look elsewhere if they aren’t a fit is because Investors' Circle, as a nonprofit, must charge an application fee of $100. I recognize that funds aren’t plentiful for entrepreneurs, so the last thing I want them to do is waste their money or time applying to us if they’re unlikely to attract interest.
That said, I’d like to think that we deliver considerable value to our applicants. Each company’s profile on AngelSoft will be active for one full year, which means it will be accessible to our 150+ members and be considered for two of our semiannual Venture Fairs, as well as every one of our monthly Virtual Venture Fairs. We provide insightful feedback to every entrepreneur who requests it and work hard to provide introductions to other collaborative investment groups where appropriate.
We understand the importance of building the entrepreneurship ecosystem and strive to support our applicants however we can. The best way in which we can usually do this is by inviting them to participate in one of our Venture Fairs. For presenting companies, we provide free coaching services from our members and serve as a liaison between the entrepreneurs and investors after they have pitched. This has helped us significantly reduce the amount of time it takes for investments to occur, with an average of less than three months for the ten deals that received funding this year.
If you’re an entrepreneur capable of making a large impact, I would encourage you to answer our Call for Applicants by this Friday, August 5, 2011. Our members have been supporting companies like yours since 1992, and have raised over $150M for 234 companies, such as Zipcar, Niman Ranch, groSolar, Numi Tea, and Boston Heart Lab. I hope that yours will be next.
Editor's note: Got a question for our guest blogger? Leave a message in the comments below. About the guest blogger: Nick Flores is the Director of Investment and Entrepreneur Services at Investors' Circle, an impact investing network comprised of angels, family offices, social venture funds, and foundations. He is focused on identifying social entrepreneurs who are committed to changing the world, and helping them raise capital. (He occasionally loses this focus because he is an aspiring Ironman and loves photography.) Nick holdes a BA, with honors, in Political Science, as well as an MBA, both from Stanford University. Follow him in Twitter at @nflores_IC.