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Why millennial women are embracing angel investing


Since angels began investing in startups in the ‘70s and ‘80s, women have been dramatically underrepresented. A new generation is blowing past traditional barriers and diving in.

[Illustration: uniquepixel/Getty Images]

Working her way up in tech, Nikitha Suryadevara saw many of her more senior colleagues investing their personal funds into new startups. “I would mention, ‘I saw that this company is doing XYZ’ or ‘That startup is doing this,’ and they’d say, ‘I invested in it,’ or ‘So and so asked me to write a check,’” says Suryadevara, a product manager who’s worked at Ritual, VMware, and Google. “I thought, That’s cool. I wish I could do that.”

But Suryadevara, who graduated from business school in 2018, had to wait. SEC rules require accredited investors to make at least $200,000 or have $1 million in assets. Once Suryadevara’s salary crossed the threshold, however, she started actively seeking deal flow. Since last year, she’s placed six bets, often relying on an informal collective of women executives called Modern Angels to find opportunities.

While Suryadevara hopes to make money, “it’s also a great way to see across a range of companies that you never usually get to see,” she says, noting that eventually she plans to found her own startup. “This is the easiest way to learn how a large cross-section of companies operate across functions, industries, and verticals.”

A decade or so ago, Suryadevara might have been unusual. For most of angel investing’s history, women have barely made a dent, due to a range of barriers that have kept them out. A report by the University of New Hampshire’s Center for Venture Research found that, in 2013, only 13% of active U.S. angels were women.

Those figures have enormous downstream consequences. Investing generates huge wealth—and influence. People who can afford to back early-stage companies are the ones who effectively decide which products and services get built and which founders rise to prominence.

Now things are changing. Last year, the Center for Venture Research published new research showing that the proportion of women angels had skyrocketed to 37%, itself a jump from 29% the previous year. While no one tracks participation by age, anecdotal evidence suggests millennial women—those in their late 20s to early 40s—are plunging into this space in numbers and with a degree of determination and enthusiasm not seen in previous generations.

“The shift is seismic,” says Nneka Ukpai, the head of financial innovation at the digital home-loan company Better, who became an angel eight years ago and now participates in a half-dozen investing syndicates.

Massive industry and cultural changes are reducing long-standing barriers. For one, startups and investing are now part of the wider national consciousness in a way they never were before. Most universities have entrepreneurship programs. TikTok is littered not only with trendy dances but also business information, including clips of famous founders and venture capitalists dispensing snappy insights. And Shark Tank, which first came on the air in 2009, is one of the most popular shows for families to watch together. “Everyone wants to be Mark Cuban and Barbara Corcoran,” says Angela Lee, who teaches venture capital at Columbia University’s business school.

Within the tech ecosystem, the most successful angels, the ones who were lucky enough to get in early into Airbnb, Shopify, or Uber have become celebrities, dispensing wisdom via podcasts and Twitter. But “luck” is the operative word. Since the beginning of this type of early-stage investing, getting onto the cap tables of the next big thing has usually been more about who you know—which friend or colleague will let you in—than superior investing acumen.

“So many people’s entire investing careers are because they were friends with [Uber cofounder] Travis Kalanick,” says one woman investor. “They wrote a $10,000 check because he was their buddy. Then they became known as brilliant investors, and they raised funds on that.” 

Birth of an angel

Networks have always been the substrate on which this asset class is built. It started in earnest in the 1970s and 1980s, when founders and executives who’d built successful companies during the transition from mainframe to personal computing wanted to grow the new ecosystem by underwriting other companies, often founded by people they knew.

Existing angels would pull in other high net-worth individuals, usually from within their own personal and professional circles. Since the original nodes—the founders and executives of those original companies—were almost exclusively male, the people they pulled in tended to be men as well.

More formal syndicates emerged in the 1990s, making it easier for anyone with a large bank account to get involved. Even then, however, the participants remained overwhelmingly male. Angel funding historically served as a bridge between the small, initial “friends and family” rounds, and the larger sums from venture firms would put in once a startup had some traction. The amount of funding required during that intermediary phase may have only been a $1 million or two, but it required people who could afford to spend five or six figures betting on an idea that likely would fail. Anyone who could afford to risk such sums were the people making money from successful company exits via an acquisition or IPO—again, overwhelmingly male.

“Ten years ago, you had to be writing a really big check, like $100,000,” says Cheryl Kellond, a former Silicon Valley executive and founder who moved to Denver in the mid-2010s and is now building Play Money, a new platform to enable small-check investing. “It was still really inaccessible.”

Recently, new mechanisms have emerged that create space for smaller investors. As VC firms have moved into the earlier funding rounds (motivated by a desire to get a jump on backing the most promising new companies in an effort to earn greater returns), they could easily cover an entire round on their own (or with other VC partners). Instead, they’ve started carving out space for “strategic” investors—people whose value to a startup isn’t the money they bring to the table but rather their expertise. Early-stage founders now actively seek “operator angels”—people who are allowed to put in as little as $10,000 (or even $5,000 or $1,000) in return for the tacit understanding that they’ll be on speed dial.

“You can use your cap table to get people you wouldn’t be able to hire for years,” says Ashley Mayer, the former communications executive at Box and Glossier who cofounded Coalition last year with three other women.

The last two decades have seen an explosion of women build careers in a range of fields and domains, and their insights can be invaluable in helping a tiny startup move quickly through a range of challenges. “There are women who’ve built companies and seen how you scale from zero to one and beyond, who have amazing wisdom,” Mayer says.

But access to the best deals still frequently remains constrained to a small, closed—and often homogeneous—clique. Coalition has partnered with prominent venture firms to gain entry to those networks. “It’s a new model, where they share their potential profits in exchange for us going out and finding their founders’ dream advisors,” she says.

Modern Angels, the organization Suryadevara joined, began for similar reasons. “Within my own friend group of operators were women who had the money to angel invest and the desire, but what was missing was access,” says Amanda Robson, a partner at Cowboy Ventures who launched the collective in 2021. “There was this repeat group of angel investors who were mostly white males working at the same companies, and they’d be in WhatsApp groups trading deals with one another. That same dynamic didn’t exist for women operators.”

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Robson compiled a database of women she knew wanted to get involved and then started a Slack group as their communication hub. “I tweeted about it, and I had about 100 women in the first month,” she says. Today, the group has more than 300 members.

“They’re sharing deals with one another and asking each other questions about everything from deal terms to different trends they’re seeing, sharing reports, talking about founder dynamics, and asking how to do due diligence,” Robson says. “It’s become this community that I knew there was demand for, but I actually didn’t know that there’d be as much demand as what it’s turned out to be.”

Angel investing is the new meetup

The demand is indeed there, and other organizations—Hustle Fund’s Angel Squad, The Council, and Citrine Angels, which is focused on Washington, D.C.—have similarly emerged to bring underrepresented investors into the mix. The explosion of successful exits over the last decade—along with the industry’s great salaries—means the tech world is flush with cash.

The idea of pouring some of that money into newer startups has now become commonplace. Employees and alumni from one successful company, for example, will often join forces to research and invest together, pooling not just their knowledge but their networks and often investing in other alumni who are spinning off their own startups.

At Notion, the workplace collaboration app, a group of about 40 current and former employees are part of just such an angel group, of which one-third are women. The atmosphere in such groups can often feel more welcoming and accessible to newer investors. Older, more established syndicates can sometimes be sharp-elbowed and usually expect incoming members to have mastered the intricacies of this kind of funding.

“What’s working about the Notion group, which I haven’t experienced in other syndicates, is it’s very vulnerable,” says Kelsey Garvey, a business development lead at the company. “The person who started our group formerly ran our community initiatives, so part of his interest is that he liked creating community where we can share and learn.”

Garvey says that’s in contrast to the intimidation she felt the first time she was invited to a syndicate. The overall vibe seemed “zero-sum,” she says. “It felt like it was more protected information—a closed network, the old boys club.”

Even more casually, friend groups are emerging organically to collectively research companies and share access to deals—the millennial version of the 1980s networks, if you will. Sometimes these groups are all-female, in part because women no longer necessarily have to partner with men. “Unlike in prior generations, they have professional networks of their own,” says Loretta McCarthy, co-CEO of Golden Seeds, which was founded all the way back in 2005 to gather angels to invest in women founders. “They’ve been in the marketplace working full-time,” she says. “They have the skills, the capital, and the professional networks to do this work.”

But just as often, these casual groups are coed. “A friend of mine is the nerdiest of nerds and really smart,” says one woman who works in product management in the Bay Area. “He organizes a weekly discussion, which is pure gold.”

The ten-person group alternates between exploring general trends and debating specific deals they find through platforms like AngelList. “We’re committed. We’re smart. We’re all working at tier-one companies,” she says. “We’re all friends for life, and we’re all interested in doing side hustles, so we decided to learn about investing together.”

Conversations about angel investing seem to be as prevalent in the tech world today in the same way as conversations about marathon training or professional meetups were 15 years ago. “There are infrastructures outside of your day job that are closely related to your professional network, where there’s a lot of chatter about it,” says Zoelle Enger, who’s worked for Box, Airtable, and Block Party. “There are Slack channels for marketers, or newsletters that you might subscribe to, or other business intelligence services, and almost every single one of those Slacks has a deal flow channel.”

The conversations are so universal, Enger says, that it can feel like not being involved in angel investing is tantamount to not funding your 401(k). “It feels like you will be missing out on a meaningful part of wealth creation if you’re not taking advantage of this unique piece of our ecosystem,” she says. “When the opportunities are so obvious, and everyone’s talking about it, it feels like you’re being willfully obtuse not to participate.”

Investing to make change

Granted, there’s nothing unique to women in the above examples. What’s notable, though, is simply that there’s now a critical mass of them involved. While everyone hopes to win the angel lottery, some women are also entering this space with the goal of expanding the types of founders and companies that get funded.

Millennials in general are more attuned to issues of equity and inclusion, and women in particular are fed up with the shockingly small proportion of venture capital that goes to women founders. The latest Pitchbook data concluded that only 2% of VC funding goes to female-only teams. Mixed-gender teams receive 16.5%. But that means a whopping 81.5% goes to male founders.

“I do hope I make a return, but I also want to invest in businesses that serve me and my community,” says Dorothy Chou, a Google DeepMind policy executive who’s based in London. In the wake of the Supreme Court’s repeal of Roe v. Wade, Chou wanted to invest in women’s health, as well as in other companies useful to women, such as a startup that automates the process of filing for divorce.

“The founder was a divorce lawyer who saw women get 30% less wealthy three years after divorce, whereas for men it’s the other way around,” Chou explains. “Clearly the system isn’t working. What’s keeping women from getting the legal support they need is that they’re too exhausted. So they just want a quick out.

“There aren’t enough people to fund these services because [traditional funders] don’t see it as a general need,” Chou adds. When she recently joined a prominent European angel group, she mentioned her interest in funding women and people of color and asked about their frameworks for evaluating such companies. “They said, we don’t actually know what the success metrics look like. Why don’t you teach us what you need?’”

Mandy Bynum built a career as a tech sales executive, but more recently has become a consultant advising venture funds on raising money, as well as working as an advocate to encourage more women and people of color to become angel and venture investors. “We’ve been left out of the conversation,” she says. “We are so extremely valuable to these startups and founders, who are creating innovations and creating products that are significantly impacting our well being.”

In her fundraising work, she comes across many Black women setting up venture funds. “Because of racism and sexism, these fund managers are having a harder time raising capital than their white male counterparts,” she says. “When women activate”— as investors, including as limited partners in venture funds—“we can lift ourselves up.”

Turning millennial connections into financial ones

The new awareness around generational wealth—and the privilege it brings—is another driver among millennial women. When Nneka Ukpai and her roommates graduated from Harvard Law School in the early 2010s, “we were making more money than we’d ever made in our lives, and we ended up sitting on a lot of cash,” she says. “We started talking to each other about what we’re going to do to grow that cash and build wealth.”

Ukpai was working at a Washington, D.C., law firm when a friend secured a government contract. But he needed $300,000 to deliver on it. Ukpai and her friends stepped up. “He ended up giving us back our money in under a year, with 20% on top,” she says.

Ukpai and her friends started looking for everything they could learn about angel investing—from how people get invited to deals to how those arrangements are structured. Now she invests with a range of syndicates—most of them coed, and most of them outside the traditional tech angel world, including one started by one of her roommates.

A two-time founder herself, Ukpai is an in-demand speaker on investing. But she still runs into lagging biases when she tries to connect with some of the traditional angel groups. “I’ve encountered men and women who size me up and assume that I need their help getting started,” she says. “And I’m like, actually you should be asking for my deal flow, so you can improve your portfolio.”

The hyper-connectedness of millennials, Ukpai says, is one reason emerging groups are faster at identifying opportunities and putting in capital. “Sometimes when I’m trying to build connections with more traditional angel groups, I’ve encountered a lack of appreciation for the sheer level of connectivity that we have, as millennials,” she says. “We’ve managed to shrink the world by leveraging social media. We’ve made the world so small that we can really move capital very quickly.”

Breaking outmoded mindsets about women and money

The long-term impact of this new burst of activity among millennial women—and the influence of these investors—will take years to measure. Angel investments can take a decade or more to prove out.

In the meantime, one other obstacle remains to more women diving into this space: the beliefs within women themselves. It’s not surprising women doubt that this is for them, given that they’ve grown up in a culture that, for one, doesn’t encourage, much less train, women to talk about money the way it does men. “It felt so taboo,” says Alana Aharonov, a Salesforce executive in Denver. After confessing her challenges in learning about investing to a male mentor, he replied. “It’s because you’re a woman. Within male circles, this is regularly talked about. When we’re hanging out at a bar, having beers, we’re talking about investments.”

There are also persistent narratives—retrograde as they may be—that managing finances is something men do. “I know all these women who are doing multibillion dollar private equity deals at work, but they say they can’t manage their own household finances, so their husband figures out which Fidelity mutual funds to use,” says Columbia’s Angela Lee, who was so disturbed about the 13% figure back in 2013 that she created 37 Angels, a boot camp to teach women to invest.

A 2021 Fidelity survey found that only one-third of women see themselves as investors, and two-thirds said they needed more information before they’d be willing to pick stocks. After her first exit, Bynum was told to get a financial advisor. “Often these advisors are male,” she says. Hers “would just talk at me,” she says. “I didn’t feel like I had any ownership or agency over this money. I was made to feel like, ‘We’ll take it from here. You don’t need to know anything. Just don’t spend too much money.’”

After watching her male colleagues begin dabbling in investing, Bynum decided to educate herself. “I realized I know a lot more about a lot of these companies having worked at them and seen how they operate, scale, and grow,” she says. Once she started taking classes, “I realized there really isn’t much to it.”

One narrative that’s often been used to explain women’s lower participation in angel investing says they’re simply more risk averse. More recently, however, that framing has been re-examined. Women, new hypotheses suggest, might simply more risk-aware, while men’s propensity to peel off giant checks might have as much to do with the social status they get from being perceived as rich or willing to gamble rather than any rational analysis.

“I haven’t seen anything that says that women investors perform worse than male investors,” says Lee. “In the public markets, women hedge-fund managers do better than male hedge-fund managers.”

The continuing absence of highly visible successful women angels, however, might be impeding greater participation by women. Olivia O’Sullivan, who worked in innovation at Dow Jones before joining Forum Ventures as a partner, says she previously didn’t used to see herself reflected in stories about startup funding. “So much of what I was seeing was very male-centric,” she says. “It felt like a huge gift when I started meeting more women who were working in venture or who were starting to write angel checks.”

At Columbia, Lee and a fellow male professor who also taught venture decided to compare the gender makeups in their respective classes. “I had double the number of female students,” Lee says. “We need to see more people who look like us at the front of the room. When we do, there’s a positive snowball effect.”

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