A guest post by Stephanie Baum
Are women shaking up angel
investment? That could be one conclusion made from a new report showing that
the proportion of active women angel investors allocating funds to healthcare
and biotechnology, among other sectors, nearly doubled in 2012. Angel investors
who are women rose from 11 percent in 2011 to 22 percent in 2012, according to
the report analyzing angel investment trends over the past year.
Although the increase coincided with
a decrease in the overall number of active investors in 2012, it’s a notable
development that reflects a long-term trend, according to Jeffrey
Sohl, the director of the Center for Venture Research at the University of New
Hampshire which published the report.
“One has to surmise that more women
are coming in than leaving,”said Sohl in a phone interview with MedCity News.
“It’s a healthy development and I’m optimistic that the trend will continue.”
Although women-led angel groups like
Golden Seeds
and Seraph
Capital are contributing to the increased number of women angel
investors and more entrepreneurs, Sohl called attention to the influence
wielded by women in other angel groups — the focus of a report published by the
center in 2011. “When there are fewer women in the group they are not seen as
viable players.” But when more than 10 percent of the investors in an angel group
are women, they increase the investment activity of the group.
Another factor contributing to the
trend is that there are more women than men in universities right now.
Women-owned ventures accounted for
16 percent of the entrepreneurs that were seeking angel capital and 25 percent
of these women entrepreneurs received angel investment in 2012, according to the
report.
Among some of the other significant
findings in the report by the Center for Venture Research at the University of
New Hampshire, the angel investors who did participate in 2012 contributed 20
percent more than 2011. Average investments were $85,435.
“The women investors we speak with
at the angel groups are pretty adamant that they they are not doing it for
philanthropy,” Sohl said. “They are looking for a good deal and when it’s a
choice between a good deal with a startup led by a man versus a bad deal with a
startup led by a woman, a woman-led business won’t overcome that risk.” But if
there is a good deal to be done with a woman-led business, it’s seen as a
win-win.
The healthcare category, which
includes healthcare services, medical devices and equipment, came second to
software as far as investment priorities were concerned, with companies in the
sectors getting 14 percent of the $22.9 billion in total angel investments in
2012. Investments in biotechnology companies accounted for 11 percent of
investments, closely following retail.
And yet, angel investment at the
early stage fell to 33 percent of investments in 2012 compared with 40 percent
in 2011, a trend that suprised Sohl.
’It is possible that given the
robust returns in the public equity markets, some angels may have reallocated
their portfolios and reduced their angel investing activity, but those angels
that continued to invest remained quite active,’ Sohl said. “We really need
that investment at the seed stage. My hope is that this is an anomaly.”
Reprinted by permission from Stephanie Baum. She is the East Coast
Innovation Reporter for MedCityNews.com where she covers healthcare startups
across health IT, drug development and medical devices; and innovations deployed
to improve medical care. She graduated from Franklin & Marshall College in
Pennsylvania and has worked across radio, print and video. She's written for
The Christian Science Monitor, Dow Jones & Co. and United Business Media.
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