Women boosting funding of start-ups

The number of women investing money into start-ups reached record levels last year as they become a much bigger force in the risky and male-dominated world of angel investing.

Women made up 21.8 percent of active angel investors nationwide in 2012, compared with 12.2 percent the previous year, according to the Center for Venture Research at the University of New Hampshire, which released its annual report on such spending on Thursday.

That’s the highest level of activity by female investors the center has recorded since it started tracking investments by gender in 2000.

“They are becoming a critical mass in angel investing,” said Marianne Hudson, executive director of the Angel Capital Association.


Angel funding for the earliest-stage companies hit $22.9 billion in 2012, a 1.8 percent jump over 2011. But the total number of individuals willing to risk such money fell by 15.8 percent to 268,160, according to the center. They invested an average $85,435.

Rising numbers of female investors may have kept angel funding levels from dipping last year, said Jeffrey Sohl, director of the Center for Venture Research.

The growth is being fueled by outfits such as Golden Seeds, an investment group focused on funding start-ups in which women have a sizable ownership stake.

“There’s a large push in our community to bring women in,” said Sheryl Schultz, a Boston area investor who helps run the local chapter of Golden Seeds, which has about 35 members. “Golden Seeds as an organization is growing, and the largest percentage of that growth is from women joining our organization from across the country.”

Golden Seeds was the fifth-most active angel group in the country last year, according to the Halo Report, another annual survey of funding activity. The group has backed such local technology start-ups as Playrific Inc. and Crimson Hexagon Inc., both of which have female chief executives.


When Schultz attended the Angel Capital Association’s annual meeting last week in San Francisco, she noticed more women at the conference than ever before.

“This was the first time it didn’t look like an all-male crowd,” she said.

The influx of female investors is also being driven by efforts to encourage entrepreneurship among women, more opportunities to get involved in angel investing, and the fact that more women in tech are beneficiaries in multimillion-dollar acquisitions and initial public stock offerings.

Many are turning around and putting that money to work at Web start-ups or health care companies, which often are run by other women.

“Some of our best and most prolific investors are women,” said Christopher Mirabile, managing director of Launchpad Venture Group in Cambridge, which was the third- most active angel group last year, according to the Halo Report. About 20 percent of its members are women, he said.

But while the number of women is growing, Mirabile said, the sector as a whole still needs to work harder to attract more women and minorities.

According to the Center for Venture Research, minorities make up about 5 percent of angel investors.

Overall, such investors backed 67,030 ventures lasts year and helped add 274,800 jobs, according to the center at UNH, which has been researching the angel investment market since the 1980s.

Michael B. Farrell
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