The Changing Face of Startup Angel Investors

2013-03-18-angelinvestors

While the issues facing female entrepreneurs are complex, a key obstacle lies in that the gatekeepers to capital are predominantly and were historically men.

By Jane Wang (Software Engineer, Etsy)

Funding is a tough nut to crack for many first-time entrepreneurs, and even a tougher nut for those from atypical backgrounds, such as minorities, women, LGBT members.

In a restaurant in south Austin, a group of powerful women from several corners of the country gathered to seriously discuss the problem. The women of the Pipeline Fellowship and Empower Lounge jointly hosted a talk by Natalia Oberti Noguera interviewing a serial entrepreneur and Dell Entrepreneur-in-Residence, Ingrid Vanderveldt, during the week of SXSWi.

Ms. Vanderveldt is an investor and an entrepreneur who has sat on both sides of the funding table, and could address the issues facing both sides. She currently heads a $100 million credit fund at Dell that seeks to make strides on the Dell’s innovation space, and outside of that, is mission-driven to serve as an example to other women, such as helping the victims of Haiti and helping other women to find their voices and become successful.

Yet like many others, her personal experience with fundraising for her companies is filled with uncomfortable moments, and tremendous ups and downs. When building her first company which she eventually sold with success, Vanderveldt had encountered significant difficulties in raising funding.

An investor sat her down and told in confidence that the reason she couldn’t raise funding was that she didn’t fit into the mold. To overcome the fact, she cut her hair, wore no makeup and only black suits, which didn’t improve the situation. The problem is only too common as female entrepreneurs who raise funding become keenly aware that, as women they face a complex decision of whether owning the fact that they do not fit the stereotype, or trying to hide that fact behind clothes.

While the issues facing female entrepreneurs are complex, a key obstacle lies in that the gatekeepers to capital are predominantly and were historically men. What does our current environment look like? 12% of angels are women and 4% are minorities, according to Natalia Oberti Noguera, Founder and CEO of the Pipeline Fellowship.

The problem is a lack of an efficient marketplace, as the funding side is under-developed. The solution to address the problem is to build a better and more efficient marketplace where willing capital can find attractive investment opportunities irrespective of the non-typical backgrounds of the entrepreneurs.

To that effect, programs such as Pipeline Fellowship, Golden Seeds, Dell Women’s Entrepreneur Network, and others are filling a much needed void to train accredited female investors on how they can strategically, financially and legally invest in startups. However, the numbers of female and minority angel investors highlight a scarcity that reflects the difficulties female and minority entrepreneurs face as they fundraise.

As more women become entrepreneurs and angel investors, there is a tremendous opportunity on both sides of the funding table.

This post was originally posted at Jane Wang.

About the guest blogger: Jane Wang is a software engineer at Etsy. She was a hacker in the Summer 2012 batch of Hacker School and the founder of Parkit Labs. Formerly, she worked as a product manager at financial tech startup and an investment banker. She is a strong supporter of female hackers and entrepreneurs. In her free time, she makes things with brackets, numbers and paint. Follow her on Twitter at @janeylwang.