A Boot Camp for Women Angel Investors
(Corrects Dimple Sahni's title in the third paragraph to show she is a former Omidyar Network investment manager. She now runs her own advisory firm.)
As co-founder of NY Tech Meetup, a group of 15,000-plus techies, investors, and entrepreneurs who gather every month in Manhattan for technology demonstrations, Dawn Barber has plenty of A-list contacts. Yet she hasn't invested in any of the people who've made presentations over the past six years. "I'm poor," says Barber, who supports herself through consulting gigs and other freelance work. "My [husband and I] are just not those people. If we were, I'd try to invest … in companies led by women."
Barber may soon get her chance. She's applying to the Pipeline Fund Fellowship, a new program for women who want to learn the ins and outs of angel investing (giving cash to a fledgling company in exchange for an equity stake). The fellowship was conceived by Natalia Oberti Noguera (above), a 27-year-old Yale University graduate who this summer launched Pipeline Fund, a New York venture capital firm that aims to back so-called socially responsible companies. Her goal with the fellowship is to increase the ranks of female angels and steer more cash toward such businesses. "There's a lack of gender diversity in the VC investment world," says Oberti Noguera. "And there's a lack of funding for profit-seeking social ventures."
Pipeline's 10 trainees will pay $1,000 each for the six-month program and must each commit $5,000, which will be pooled into a $50,000 investment in a company led by women. Each participant will be paired with an experienced investor such as Foundry Group Managing Director Brad Feld or former Omidyar Network investment manager Dimple Sahni, who will serve as mentors on due diligence, valuation, governance, and other issues. "In a lot of angel networks, not everyone is doing the heavy lifting in terms of deciding where to invest the money," says Oberti Noguera. "In ours, [participants] have to commit to all components, not simply writing a check." She started accepting applicants in mid-November, plans to kick off in January, and will hold a pitch summit in late spring to decide which company to fund.
While women create nearly as many businesses as men, few of them receive angel money. Women account for just 11 percent of the entrepreneurs seeking angel capital in the U.S., and only 14 percent of those got an investment in the first six months of 2010, according to an October report by the Center for Venture Research at the University of New Hampshire. Women entrepreneurs "don't seek capital at a very high rate," says Jeffrey E. Sohl, director of the UNH center. When they do, "they tend to look for women angels, and there aren't that many."
Longtime angels say programs such as Oberti Noguera's can help change that. "I admire what this young lady is doing," says Vanessa Wilson, a director of Golden Seeds Academy, a similar program run by Golden Seeds, a group of 140 angels that in the last three years has invested more than $4 million annually in companies led by women. Given the relatively small amount of cash the Pipeline group will have to invest, "one of the challenges [they] may face is getting companies to give them enough time to do adequate due diligence."
Oberti Noguera says a partnership with Women 2.0, a networking group of tech entrepreneurs, will help her track down potential deals. She has lined up advisers such as Web pioneer Esther Dyson and has tapped a nonprofit called the Angel Capital Education Foundation for help with the curriculum. And Oberti Noguera is already planning similar programs in San Francisco and Los Angeles for next year.
Her effort is attracting support in the startup community. "Angel investors tend to learn from other angel investors," says Feld. "Anything we can do to encourage more women to be involved and visible is a good thing in terms of the entrepreneurial ecosystem."
The bottom line: To increase funding options for companies led by women, a new fellowship aims to train more women to become angel investors.