Angel investing has traditionally been dominated by white, male investors. However, in recent years, we have seen a significant shift in the demographics of angel investors, with more women and minority entrepreneurs entering the field.
In this blog post, we'll explore this trend and examine the factors driving the rise of female and minority entrepreneurs in angel investing. We'll also look at the benefits of diversity in the investment world and provide some tips for female and minority entrepreneurs looking to break into angel investing.
The Changing Face of Angel Investing
In the past, angel investing was seen as a "boys' club," with white, male investors dominating the field. However, this is changing rapidly. According to a report by the Angel Capital Association, the percentage of women angel investors has more than doubled over the past decade, from 12.2% in 2006 to 29.7% in 2019. Similarly, the number of minority angel investors has also increased, from 5.5% in 2006 to 17.1% in 2019.
This shift is being driven by a number of factors, including greater awareness of the benefits of diversity in the investment world, as well as the increasing number of female and minority entrepreneurs starting their own companies.
Benefits of Diversity in Angel Investing
There are many benefits to having a more diverse group of angel investors. Studies have shown that diverse investment teams tend to outperform homogeneous teams in terms of financial returns. This is because diverse teams bring a wider range of perspectives and experiences to the table, which can lead to better decision-making and a more comprehensive analysis of potential investments.
Furthermore, having more female and minority investors can help to level the playing field for entrepreneurs from underrepresented groups. Female and minority entrepreneurs often face greater barriers when seeking funding, and having investors who understand these challenges can help to ensure that they receive the support and resources they need to succeed.
Tips for Female and Minority Entrepreneurs
If you're a female or minority entrepreneur looking to break into the world of angel investing, here are some tips to help you get started:
Build your network: Networking is key in the world of angel investing. Attend events and conferences where you can meet other investors and entrepreneurs, and join angel groups or syndicates to pool your resources with other investors.
Do your research: Before investing in a company, do your due diligence. Look at the company's financials, market potential, and founding team. Make sure the company has a solid business plan and a clear path to revenue.
Be patient: Angel investing is a long-term game. It can take years for a company to reach its full potential, so be patient and don't expect overnight returns.
Consider joining an angel group: Joining an angel group like Keiretsu Forum Canada can be a great way to gain access to high-quality investment opportunities and to learn from more experienced investors.
Conclusion
The rise of female and minority entrepreneurs in angel investing is an exciting trend that is changing the face of the investment world. By bringing a more diverse range of perspectives and experiences to the table, these investors are helping to level the playing field for underrepresented entrepreneurs and driving greater financial returns. If you're a female or minority entrepreneur interested in getting involved in angel investing, start building your network, do your research, be patient, and consider joining an angel group.