Women business angels: theory and practice

Abstract

Business angel investing has traditionally been a male-dominated activity. However, over time, there has been an increase in the total number of women business angels worldwide. The chapter provides a gender-based review of the changes occurring in the business angel market. Recent reports from the USA show a significant growth of the number of women business angels who are now estimated to represent 15–20 percent of the business angel market in the USA, but comprise a significantly lower proportion in other countries. The author argues that there are several barriers that can prevent women becoming business angel investors. For example, women are more conservative and less experienced investors, less likely to be ‘cashed-out’ entrepreneurs, with different social networks than men, and have different types of family responsibilities. When women become business angels they invest sectors that have often been overlooked by male business angels, and they tend to invest in women-led ventures. The author identifies a number of favorable trends that will continue to drive the growth in the number and proportion of women business angels. These include an increase in the number of high net worth women, an increase in the number of women-led angel investment funds and the proliferation of programs to train women business angels.