Angels Den Blog

Following on from the 2008 budget, much talk has been of Alistair Darling’s new £12.5m capital fund to encourage women entrepreneurs. With only 14% of small businesses being run by Women (Annual Small Business Survey 2006) there is no surprise that more help is needed.

The proposed fund intends to give potential women entrepreneurs the basics of writing business plans, running a company and pitching for investment.

But does it go far enough?

We’ve looked into the how women entrepreneurs can utilise Angel Investment to further their businesses which give female entrepreneurs more of an opportunity to succeed in business.

Would you believe that the fairer sex now make up nearly half of the UK’s millionaires? Not only that but most of these are under 50 years old! So how are they doing it? Is it through lucrative divorces, family money or climbing the corporate ladder? In fact the biggest rise is said to be due to women setting up their own businesses, often from home. and making themselves a fortune.

It’s great to think that even though we don’t seem to that fussed about breaking down the glass ceiling, we go off and do things our way!
There are great case studies to inspire us, from Anita Roddick (Body Shop of course), Michelle Mone (founder of multi-million pound lingerie company) and the ubiquitous Jacqueline Gold (Ann Summers & Knickerbox).

However my personal experience, from helping women-run businesses, is that too many women entrepreneurs don’t achieve these heady heights but not because of a lack of ability or a poor business idea. Women don’t traditionally see themselves as risk-taking entrepreneurs, but they do love the freedom of self-employment. So they tend to set up in business at home, often with kids running around in the background, without any outside money or staff to help. Boy, do we like to do it the hard way?

The average guy setting up a business would rent some premises, raise some funding, hire an accountant, a lawyer etc. Then they either go bankrupt or make it big. Women on the other hand, tend to start slower, growing the business organically from home, with their own or family money and counting every penny. As a result they often inadvertently keep their business small and can lose interest or get enticed back to a high paying job. However they probably don’t owe anyone anything. In fact the statistics show women stay in business longer than men but they don’t make as much money.

So how can more of us make it into the millionaire list? It’s forecast that by 2025 60% of millionaires will be female. Could we be in that group?
I think we can learn from Dame Anita. She believed in her idea so much she talked her next door neighbour into giving her equity funding, making them both very rich in the process too. She could never have got so big so quickly without outside funding and have secured her enviable position in the market.

Getting Angels to help also share the risk. The average successful entrepreneur has 2 failed businesses under their belt. This means that you may need to be able to pick yourself, dust yourself down, learn from your mistakes and do it better next time….twice. How are you going to do that if you spent 10 years growing the business painstakingly, re-mortgaged the house or spent your family’s entire fortune. You simply wouldn’t want to take another risk. However if you use Angel funding you can share the risk with someone who can afford to lose the money, knowing that they will also benefit if this is one of the ones that makes it big.

This is all well and good, but how do you find an Angel who shares your belief in the business? The good news is that word has got round that women business owners look after the finances better than men and many Angels are steering towards investing in female-run businesses. Plus there are an increasing number of female Angels, keen to give something back to a new generation of entrepreneurs. It’s that old social conscience we are so proud of. It also suits women to invest in somebody else’s business and help on a part-time business, rather than flog their guts out running their own. So if you have already made a comfortable sum you might consider helping someone else up the ladder.

The even better news is that it’s easier than ever for Angels and entrepreneurs to find each other. You don’t have to go to stuffy dinners or endure the torture of Dragons Den. Harnessing the power of the internet, Angels Den has recently launched to connect people seeking funding with Angels in a fresh and user friendly way. Written in plain English, it guides people through the process of pitching their business online. Angels are required to sign up to all sorts of confidentiality clauses and certify that they are bonafide investors, as you might expect, but then can search through the crème of business ideas for free. The best thing is that if you get funding, you and your Angel don’t have to give a huge success fee or a share in the business, the flat upfront fee of £499 is all you pay. It’s what you’d expect from people who have been through the process from both sides, a simple and user-friendly solution that helps get businesses off the ground fast.