Angel Investing: Women Want On The Roller Coaster Too

Credit: The 5th Ape

Do women have the guts to wear a halo? The stereotype says no: Women want to play it safe with their money. They just aren’t as adventurous as men when it comes to investing – and that means most will shy away from becoming angels.

It’s true women are still underrepresented in angel investing: Just 8% of the 225,000 active angels in 2005 were female, according to the Kauffman Foundation.

But a female serial entrepreneur who has ridden the “rollercoaster ride” of angel investing shatters that old stereotype and offers inspiration for women interested in getting started.

Gender Gap

Francine Hardaway, founder of Stealthmode Partners in Phoenix, understands why women aren’t interested in the game – at least initially.

“Women aren’t as risk tolerant and they hit singles rather than swing for the fences. I’d call my own first business either a single or a bunt,” she writes in a guest post.

One Step At A Time

So how does a woman go from timid spectator to bold angel? For Hardaway, an early success paved the way to more, with a few lessons learned along the way.

Hardaway took her first foray into angel investing by putting up US$5,000 for a former student. She ended up making US$50,000 when the company went public – a sizeable enough return in the 1970s to hook her.

She went on to more success (a FFF — Friends, Family, Fools — investment helped 2 friends start a “rag” that is now Village Voice Media) and she was on her way.

Roller Coaster To Success

Of course, through the years, Hardaway has had ups and downs. She lost a million in 1990 in real estate, but “made a ton of money” by flipping houses in the mid-2000s.

All told, she estimates she’s been in about 50 real estate deals and 15 tech deals. She calls herself a “deal junkie” – an image that blows up the notion that women aren’t interested in high risk, high yield investments.

In fact, women like Hardaway are particularly well-suited for angel investing.

“Most of the men I talk to don’t have my stomach for roller coaster rides,” she says.

Pay Off Worth It

If you’re standing there at the gate, wanting to get on the ride, you’re probably ready to become an angel investor. But it’s important to understand the basics and your own tolerance for risk. If you want a little help along the way, consider joining an angel group. An angel group will pool your resources with other investors  — spreading the risk while maximizing your potential for success. You can also learn the ropes and pick up some invaluable advice.

Be prepared for a few bumps. For most investors, including Hardaway, a few twists and turns along the way are worth it.

“I’ve never lost everything, and I have had a fabulous time,” she says. “I will obviously do this until I completely lose my senses.”