A new Silicon Valley-based angel fund meant to get women more comfortable with investing officially launched today with support from the Kauffman Foundation.
The Rising Tide Fund employs a collaborative investing model, with nine seasoned women angel investors serving as advisers to 90 women—all accredited investors—from across the United States, who will be non-managing members of the fund. Each of the fund’s members will contribute $10,000, for a total of $1 million, and the fund hopes to invest in up to eight startups.
The Rising Tide fund is meant to be a learn-by-investing experience. Training will include mentoring by experienced investors, online educational materials, podcasts, angel investor office hours, quarterly live webinars, and Q & A sessions.
The Rising Tide program will culminate with a women’s investor summit in Boulder, CO, next fall. The training components and investor summit will be sponsored by the Kauffman Foundation.
Angel investors who are interested in joining the fund can do so by registering and applying on Portfolia. Alicia Robb, a senior Kauffman fellow, entrepreneur, and author, is one of the seasoned angels leading Rising Tide. Much of the fund’s approach comes from research she did for her book, The Rising Tide: Financing Strategies for Women-Owned Firms.
“We looked at what’s stopping women from becoming angels,” Robb says. “Women tend to be more risk-averse. When you’re investing, it’s inevitable that you’re going to lose money, so the only way to succeed is to make multiple investments. By joining Rising Tide, our members will get six to eight investments out of their $10,000. Plus, they’ll be exposed to successful women investors from across the U.S. We think that will address many of the pain points women investors have.”
According to Robb’s research, women currently make up 26 percent of angel investors nationally, up from 19 percent in 2013. Though that number is low and needs to improve, Robb says, it’s actually far higher than the rate of female representation at traditional venture capital firms, which clocks in at a paltry 6 percent.
In fact, Robb feels the angel community is very welcoming to women and minority investors, comparatively, and can be a great place for the novice investor to start. “It can be kind of overwhelming, so one of the things we’re doing with Rising Tide is putting together a list of resources,” she adds. “The curriculum will be freely available.” (A webinar discussing how the fund works is already posted online.)
Robb will be at the University of Michigan’s Women Who Fund conference on Oct. 8 to share her opinions about the current investing landscape and how women might improve their access to capital.
Women tend to be more realistic, she says, which can work against them in an atmosphere that sometimes prizes overconfidence and bluster. “Realism tends not to resonate as well with VCs because they need to see the growth potential,” Robb says.
Robb suggests women startup founders leverage their tendency toward realism by studying their company’s value proposition and having a firm grasp of the numbers in play. “It’s not rocket science: VCs need to see a potential return, a real market size, and growth opportunities,” she says. “On average, men feel more comfortable talking about numbers, but financial literacy is something that can be learned.”
She agrees that being the only woman in a room full of male investors can be a disadvantage. “We need more women on the investing side,” she says. “Then, it becomes a cycle. More women investors could invest in more women-led startups, generating wealth for those women, which in turn allows them to do more investing in women.”
What Robb is tired of seeing are so-called solutions that merely suggest women are a problem in need of fixing. “Women need to walk in with confidence, have their numbers down, and prove they’re thinking about scaling,” she says. “Know the market size and expected outcomes. And be sure to ask for enough money, because women typically don’t ask for enough. Make it worthwhile.”
And for women who might feel like being located outside of the Bay Area is a further hindrance to becoming a successful angel? Robb has news for you: Silicon Valley is hopelessly “overheated,” with VCs and entrepreneurs alike drunk on wildly overinflated valuations and their own hype. “The real opportunities are in the rest of the country,” she adds.
