In 2004, roughly 5 percent of angel investors were women. In 2016, that number jumped to 26 percent. This is important for business owners seeking capital in Colorado and throughout the country. As the number of women angel investors has surged, the number of companies run by females that have received funding has also increased.
In 2016, 22 percent of companies that received angel funds were run by women. That is compared to just 3 percent in 2004, and research shows that women are founding roughly 1,000 new companies per day. According to the Diana Project, a venture capital firm that has a woman partner is more likely to invest in companies with women on the management team. There are many different reasons why this could be the case. For instance, females might be able to relate to the life experiences of other women and truly see the opportunity being presented to them.
It is important to note that a company is not going to get funded simply because they are pitching to someone of the same gender. Instead, it is important for entrepreneurs to focus on their ability to communicate as well as showcase the credentials of the company’s management team. Entrepreneurs can also improve their odds of getting funding by stressing their own educational background or history creating successful companies.
Seeking capital from angel investors may be an effective way to obtain financing. However, before accepting an offer from an investor, it may be worthwhile to have an attorney review the agreement. This allows an entrepreneur the opportunity to determine if the terms are right for the company today and in the future. An attorney could also be helpful in providing assistance during the due diligence process prior to an agreement being finalized.