Women business angels: “It’s not about having a soft touch…”
28 December 2011 - Impact Hub

This week, the Make a Wave Pre-Incubator for Women Social Entrepreneurs was taking residence at the NESTA premises in London, where our guest host Sally Goodsell, CEO of the FSE group, joined the 12 fellows.

Despite the high number of successful business and professional women in the UK, and with women accounting for nearly half the millionaires in Britain, currently only about 5% of Business Angels in the UK are women.

“So many women have the skills, experience and wealth to become successful and active business angels. Incito provides an ideal forum to do this. We are aiming to present a wide variety of deals to our investors, including businesses that will appeal to female investors.” says Sally Goodsell, CEO of Finance South East and Board director of the British Business Angels Association.

The big question is where are the women? What is stopping women entrepreneurs? It is lack of confidence, lack of understanding of how finances work? Sally reckons a combination of various factors stops women to do business.

First of all, the angels’ attitude needs to change:

  • They need to pick up hidden potential
  • Never write anybody off
  • They shouldn’t make too quick judgments and on the contrary be very open to new things.

Then, the reality is that 8 out of 10 times, the deals don’t produce any return. We need to produce more tax incentives schemes and exit options to allow more organisations and individuals to invest.

And on the other hand, we need to support women with removing their fear of funding…

“Women are good at forecasting and budgetting. The fact is that women are more realistic in their forecasts than their male counterparts. The numbers they put in their plans are what they think they are genuinely going to achieve.”

Incito is leading the change: it’s about women coaching other women entrepreneurs. They all have a passion for business and provide support in a genuine collaborative way. They are really supportive and do not try to score points.

“It is not about having a soft touch, that would be a disservice to the clients we support. On the contrary, it is very focused.”

When we touch on the topic of social entreprise, we need to introduce the notion of patient capital. Financial returns can sometimes be slower than in other industries.

Sally introduced the Social Impact Co-investment Fund. Loans between £25k to £100k are made to qualifying businesses which are financially robust AND can deliver disruptive social impact. This is provided on a “match funding” basis alongside private sector investors who may invest via equity or loans. The Fund is currently deployed throughout various organisations in the UK.

Sally’s encouraging tips to the Make a Wave fellows:

  • You have to be the educators in this market.
  • Bring the discipline and the proof that your model makes a difference
  • You have got  a chance of a lifetime and the opportunities to make a difference in this market place. Seize it.
  • Angels find new businesses at pre-revenue stage very difficult so chase any small amount of money you can.
  • As an entrepreneur, you need to be outstanding in putting your story across.
  • Investors are not here to fund a lifestyle for you, it’s about shared risks.
  • Cornerstones invest if your business has a chance to attract angel investment.
  • If you can go to a bank, get a cheaper loan!
  • Get yourself a financially savvy mentor or a non-exec finance director for instance.
  • You need to be able to challenge figures as the business grows. If it is not your specialty, have you envisaged attending a course in finances for non-financial managers?
  • You found the business, and then you have to build a team. Failure happens inevitably when you think you can do everything!
  • Be able to provide evidence of your social impact.
  • Get a due diligence pack and tidy up the loose bits.

More on Sally Goodsell. Sally is the CEO of the award-winning FSE Group, a not-for-profit organization which she grew from 1 to 35 employees with £45m funds under management, offering direct investment and professional support to early-stage businesses.  Sally started her career in investment banking in the City, latterly at Guinness Mahon where she was a Director. While on a career break to raise her family, she started her own business which she later sold. She is a frequent speaker and has advised national and regional governments on SME finance and female entrepreneurship for which she won the “Prowess award” for Outstanding Contribution to Women’s Enterprise Development. In 2010 Sally established Incito Ventures, the UK’s first female business angel network / VC that is focused on women-led businesses.

2011 also saw the launch of The Social Impact Co-Investment Fund, the UK’s first business angel co-investment fund for social enterprises.

Sally is a Board member of the British Business Angels Association (BBAA) and the European Business Angel Network (EBAN). She studied Spanish and Portuguese at University College London and is authorised by the Financial Services Authority.

MAKE a WAVE is the only pre-incubator for women social entrepreneurs, taking risks to expand the women-led social ventures market place.

More on www.ogunte.com

This blog post originally appeared on Ogunte.Blogspot.com. Servane Mouazan is a member of the Impact Hub community and has chosen to republish her content with the Hubble.