A recent report found that women have reached near parity in an arena previously dominated by men: angel investing. Angel investors typically help nascent companies with funding in exchange for equity. Data compiled by the Center for Venture Research found that women investors make up more than 46% of the angel market.
This week, we’re spending time with a network of female angel investors to learn about the investment landscape for women. “Marketplace Morning Report” host David Brancaccio spoke with Deb Kemper, a veteran angel investor who heads up a group that is centered on helping early-stage founders get their ideas off the ground. She’s also a managing partner at Golden Seeds Venture Fund. The following is an edited transcript of their conversation.
David Brancaccio: Help me with your thought process. What are some of the questions you’re asking yourself if someone comes by with an idea that needs money?
Deb Kemper: So the first thing I look for is, is it unique? Do they have some secret sauce in terms of what they’re doing? So what’s the customer problem they’re trying to solve? Do they really understand that customer, and do they have a unique solution to how they’re solving that customer’s problem? So that’s at the bottom line, what we’re looking for.
Brancaccio: If the company that you invested in scores, if it’s successful, I mean, it can be a big upside, but I’m curious about the conversation you might have with yourself about risk. It’s risky. Some of these do fizzle, and that can be very hard.
Kemper: Oh, it’s brutal. First, it’s brutal on the founders and those teams and those employees of those companies, but it is a factor in this industry. We’re on the bleeding edge of technology and markets, and some are going to work and some are going to fail. So you have to get comfortable with that. As an investor, you get comfortable with that by only putting so much of your portfolio into high-risk companies. It’s always hard when a company fails, but what you have to do is, when I work with those founders after, it’s talk about the success they did have and what they brought to the market, and then how can they leverage that on whatever they choose to do next. And so you try to take away the wins, but it is extremely emotional when these companies go down.
Brancaccio: Let’s just talk about the shift in the angel investor landscape that you’ve been actually part of. When you started out, there weren’t all that many women who were angel investors. That’s partly what Golden Seeds seeks to address. You’ve seen the data. I’ve now explored the data, that percentage is much higher now, not parity, but heading in that direction.
Kemper: It is heading in that direction. But I think part of it is that groups like Golden Seeds provide a place for women and for men to learn about the sector, and so we provide training for members, helping them understand the lingo, helping them understand the risk right, and the risk profile of these companies, and get comfortable with that risk. And that’s where I think groups like Golden Seeds have done a great job in educating folks on that they can be angels. I think a lot of times people think they need more capital than they may actually have to do it, and it helps make it an easier entry point into these investments.
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