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Women as the New Face of Wealth and How Investment in Innovation Can Be a Lever to Address Gender Gap

Women as the New Face of Wealth and How Investment in Innovation Can Be a Lever to Address Gender Gap, TheRecursive.com
https://therecursive.com/author/andreea-saia/

Andreea has 11 years of experience in tech consulting, including strategy and tech due diligence, and 2 years of entrepreneurial involvement in Tech M&A. She previously worked at Deloitte, PwC, Ericsson, and Orange. To better support startups, in 2021 she co-founded, together with Ruxandra Muys-Stoian, WIT Angels Club, a female-only investment club with 80+ members across 12 countries, c. 700 000$ invested in 10 portfolio startups spanning various geographies (France, Israel, US, Romania).

International Women’s Day (IWD) is celebrated worldwide on the 8th of March to honor the achievements and contributions of women in various fields such as politics, science, literature, business, and social development. It’s a day to highlight the importance of gender equality and to raise awareness about the challenges that women continue to face worldwide.

According to the Consultancy group Boston Consulting Group (BCG), women hold an average of 40% of global wealth, and this could rise at a compound annual growth rate of 8.2% by 2025, outpacing the 5.2% compound annual growth rate projected for men. As women become wealthier, their influence is growing. They are beginning to redefine areas that have traditionally been focused on, and dominated by men.

In this article, we celebrate women as the new face of wealth and how they are amassing greater wealth than before to address current gender gap inequalities.

One of the areas strongly dominated by men is venture investment, investments in innovation, where solely 2 out of 10 retail investors are women (angel investors), and where 1% of venture capital (VC) funds managing partners are women. These funds are the ones writing the highest checks and deciding on the innovation impacting our lives.

Venture is a high-risk/high-reward asset class with returns uncorrelated to returns from other asset classes as the return potential for venture is among the highest of all asset classes. This is why women should take a closer look at this type of investment.

5 female angel investors with diverse professional backgrounds and from different geographies share their perspectives on investing in innovation and the challenges women face in this investment field.

  • Raluca Alexandru, Executive VP at Boreal Capital Management, former Investment Professional at Goldman Sachs (based in Zurich, Switzerland)
  • Roxana Precu, Immunology Franchise Head at Sanofi UK and former C-level executive at GSK (based in London, UK)
  • Monica Jiman, C-level executive at Pentalog (part of Globant, and based in Bucharest, Romania),
  • Laura Voinea, Co-founder UPFLINX and former CHRO at BCR-Banca pentru Locuinte (based in Bucharest, Romania)
  • Narcisa Grumaz, Director of Sales & Operations at Carel Woodworks (based in Satu Mare, Romania)
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Why invest in startups?

“I have been doing investments in capital markets for more than 20 years and angel investing was one investment area that some of my clients in America were very much attracted to. I guess the attractiveness for me comes from investing directly with people who create ideas/ businesses and the satisfaction of contributing”, mentioned Raluca.

Roxana, after experiencing entrepreneurship throughout several projects, mentions that angel investing enables her “to support passionate entrepreneurs who are solving important problems and building disruptive solutions. Additionally angel investing allows me to stay connected to emerging trends and technologies in various industries. I invested in early-stage projects driven by the belief in the team and the idea”.

The enthusiasm is real

“The most captivating aspect is the opportunity to witness the evolution and maturation of innovative ideas. Each startup brings a new vision and approach, and the diversity of these perspectives offers a continuous learning environment. It’s fascinating to observe how the team, organizational culture, and strategies are shaped and adapted to meet challenges and opportunities along the way”, confessed Narcisa.

Laura mentions that it is more about “the level of energy, enthusiasm and focus of the founding team. Innovation and agility reach their peak in this phase. When you lay the foundation of a new edifice and see it take shape, I think you have a satisfaction that is difficult to repeat in later stages”.

With angel investment, there comes the challenges for women

Raluca emphasizes that challenges for women to get involved in male-dominated areas like investment come from their infancy. “I believe girls should be raised with a similar set of opportunities and standards as boys and then, 30 years later, equal representation in most of the economic setups (start-ups, boards, etc). For as long as little girls are expected to behave perfectly and do as they are told, while for boys it is ok to explore, fail, attempt, and move on and build something else further, women will dare less, fearful of failure or of not being perfect”.

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Monica continues underlining that “the difficulties for women accessing investment networks and investment opportunities are related to the nature of the ecosystem which is male dominated or less accessible to women. Addressing this challenge involves the development and promotion of more inclusive networks, as well as specific events that encourage the participation of women to strengthen their position and bring their valuable contribution to the startup and investment ecosystem”.

Diversity is very much needed

Laura is a strong supporter of the idea of diversity “the more diverse perspectives are at the same table, due to diverse experiences, the more the chances of making beneficial decisions to the business increase. The areas of interest of the female audience are different from those of the male audience. Thus, I believe that there is a need for female innovation vectors to balance market demand and support projects of interest to women. When it comes to projects with a mixed target audience, I think women have a more holistic approach, they are more concerned with the need for sustainable solutions and social impact”.

Roxana considers that women angel investors can bring a large panel of advantages: diverse and broad networks of professionals, focus on social impact innovation, more collaboration and communication throughout the investment process, role modeling and mentorship as women angel investors serve as role models and mentors for aspiring entrepreneurs, particularly women founders.

Sharing lessons, from women to women

“Investing in startups comes with a high degree of uncertainty and risk. You have to be prepared to take some failures and learn from them. For this reason, diversifying your portfolio by investing in multiple startups can help offset potential failures and increase your return potential”, suggests Monica.

Raluca, backed by her investment background, recommends to “invest in what you like and in a business you would be proud to contribute to, not in what you think will bring the most money or where other investors flock. Diversify, don’t place big amounts on a few ideas and make those investments periodically, over the years (in this way you spread your capital over an economic cycle, rather than deploying all money within the same time)”.

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Laura suggests that first-time angel investors “should first inform themselves, familiarize themselves with the specific terminology, the stages of an investment and the associated risks. Then, they should try to gain experience by connecting with other investors, perhaps even joining an investor club, and by getting involved with small tickets and making data backed investment decisions”.

Narcisa’s advice is “to take a chance and try. It’s important to demonstrate that this field doesn’t have to be male dominated. By stepping forward, we can showcase the unique value and perspectives women bring to the table, encouraging a more diverse investment landscape”.

Regarding the future of the venture investment landscape in terms of gender diversity and inclusion, Raluca believes that “to have more women entrepreneurs we need to have more women as investors, or at least more women educated in investments. And this is far easier to achieve than the first predicament”.

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