Susan Preston: Investing in women can build vibrant economy

We are still a long way from gender equality in the creation and growth of companies, but in the past ten years there has been a slow increase in the number of women entrepreneurs receiving funding. Picture: PA

One of my passions is the support and advancement of women investors and entrepreneurs. We are still a long way from gender equality, not just in equal pay for equal work, but also in the creation and growth of companies.

Women still receive a disproportionately smaller percentage of investment funds. Less than 6 per cent of US venture capital money goes to women-founded companies and angels are not much better at funding women. According to the Centre for Venture Research at the University of New Hampshire, 26 per cent of companies seeking capital were women-owned, but only 14.4 per cent of these women (the 26 per cent) received capital.

These US statistics reflect the world generally. I am not suggesting that half the population is out to quash the efforts of the “better half”, but rather, it is human instinct to associate with people who “look like us”.

There is some good news. In the past ten years we have seen a slow increase in the number of women entrepreneurs receiving funding, and I strongly believe it is because of the significant increase in angel groups specifically focused on investing in women.

In 2005, the US had a handful of women-focused angel investor groups, but by 2015 we were at 30 and growing. Such statistics drive my passion for enthusiastically supporting Investing Women Scotland, the first all-women’s angel investment group in Scotland. Organisations like Investing Women are critical to the support and growth of a vital part of the economy – women investors and entrepreneurs.

This is also sound economics. We know from studies by World Bank, OECD, and Kauffman Foundation that countries engaging women in the economic process are far more prosperous than those that still have their heads in the sand.

Investing Women provides other benefits not necessarily immediately apparent. Women approach investing differently from men in several ways, including wanting to learn all about the process of investing before making a first investment. In addition, many women feel more comfortable asking questions in a room of other women than full of men.

Investing Women has already made a hugely positive impact through its initial investments and empowering women angels with tools and knowledge to participate in supporting young, aspiring entrepreneurs. I strongly encourage Scottish businesses and the Scottish Government to embrace this opportunity to support women and build a vibrant and prosperous economy. «

Twitter: @Investing_Women

Susan Preston is managing partner of the Seattle Angel Fund. She is a keynote speaker at Investing Women’s Ambition & Growth Conference in Edinburgh tomorrow and Tuesday.