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English version - Women Angel Investor Report 2024

An Analytical Study of Women Angel Investors' Investment Behavior, Opportunities, and Barriers in Denmark, May 2024. Download the report here 👇🏼



BACKGROUND

Together with the independent analyses and policy institution EQUALIS and supported by the philantropical fund The Danish Industry Foundation, Angella Invest has developed the first report on the investment behaviour, barriers and opportunites of women angel investors in Denmark.


The purpose of the report to to put a spotlight on woman angel investors in order to change the gender imbalance in the Danish startup ecosystem, where 9/10 angel investors are men who invest approx. 5-6% in women-only startup teams (source: DanBAN, Unconventional Ventures).



IN THE REPORT

The contents of the report include:

  • Characteristics and investment behavior of 117 women angel investors in Denmark, including age, background, wealth, investment interests, and motivation for investing

  • Perceptions and barriers regarding angel investing based on interviews with women non-angel investors

  • Recommendations for initiatives that can promote women angel investors

Read the report’s conclusions and recommendations below.


Business angels
From left: Christine Nordam, Louise Lachmann og Phaedria Marie St. Hilaire

Conclusion of the Report

In summary, the study shows that generally, women angel investors are financially resourceful and can contribute with very relevant business and investment experience. 53% of women angel investors state that they have more than DKK 5 million ready-available capital for investments and 81% have a background as former owner- managers or (co-)founders. 85% of the women angel investors inform that they want to be active investors and approximately 1/3 of the women angel investors are full-time investors. About 9/10 of the women angel investors inform that making a difference with their capital, time and skills is in the top 3 reasons for investing in startups.


Women angel investors have a strong interest in investing in STEM, particularly within the areas of Life Science with MedTech & HealthTech (35%) and Women's Health (18%), and in the green transition consisting of GreenTech (20%) and CleanTech & Energy (15%). In addition, about a quarter (23%) of the women angel investors are interested in investing in SaaS.


50% say that investing in women (co-)founders is crucial to their investment decision. However, the data also shows a variation among the women angel investors as to how crucial it is to their investment decision that the founder teams comprise of women (co-)founders.


Data suggests that 3/4 of women angel investors have only started investing within the last five years, so the overall market for women angel investors is still immature and under development. Selected conclusions are highlighted below:


There are few women angel investors in Denmark

It is estimated that there is a relatively small number of women angel investors in Denmark (approximately 300-400 investors), which is approximately 10% of the total number of angel investors in Denmark, which is estimated at approximately 3,0004,000 private individuals. In this report, we have collected 117 responses from women angel investors who have made at least one investment of min. DKK 50,000 in a startup.


There are many new women angel investors

The majority (73%) of women angel investors have only started investing in the last 5 years, with the majority having started in the years 2021-2022 (34%). Only 14% of the investor respondents have more than 8 years of experience investing in startups.


Women-focused investor communities are an important initiative

79% of women angel investors who are members of investor networks are also members of women-focused investor communities that have only existed since 2022-2023. 55% of the women angel investors state that women-focused investment communities are an important measure to promote more women angel investors. This is something that the women non-angel investors also emphasize.


Women angel investors have relevant work experience

The women angel investors have strong and highly relevant professional experience to contribute as investors in startups. The majority (81%) have a background as former owner-managers or (co-)founders and the majority have experience in business management at executive level (64%) and professional board work (74%). In addition, about half have experience as subject matter experts (44%) or and with other types of entrepreneurships (31%).


Women angel investors are active investors with extensive investment experience

1/3 of the women angel investors state that they are full-time investors; either as angel investors (9%), venture capitalists (8%) or full-time investors in general (14%). 79% state that they have experience investing in shares, and a large proportion also have experience with real estate (48%), bonds (41%) and venture capital / private equity funds (39%).


The women angel investors are therefore very active investors who diversify their investment portfolios greatly. They are also used to making large capital investments, as both real estate investments and fund investments typically require investments of more than DKK 750,000 per single investment.


The Danish women angel investors are well capitalized

The Danish women angel investors in the study are well capitalized. 53% of women angel investors state that they have more than DKK 5 million in capital ready-available for investments. Similarly, 53% of the women angel investors state that they have more than DKK 1 million reserved to invest in startups. 31% have DKK 3 million or more set aside for angel investments.


Women angel investors are motivated by making a difference with their capital, time and competences

Both the women angel and non-angel investors are strongly motivated by making a difference with their capital, time and competences. 56% of the women angel investors state this as their most important motivation and almost 9/10 of the 117 respondents in the study reveal it as one of their top three motivations. 85% of the investors indicate that they want to actively contribute time and competences to their portfolio companies.


Women investors are interested in STEM, especially in Life Science

The women angel investors have an interest in investing in STEM, and in particular within the fields of STEM:


1. Life Science: MedTech & HealthTech (35%), Women’s Health (18%) and BioTech (6%)


2. Green Transition: GreenTech (20%) and CleanTech & Energy (15%)


3. SaaS (23%)


4. Social Impact Investing (20%)


Investing in the green transition is of great interest

GreenTech, CleanTech & Energy and Social Impact Investing are the investment areas with a high interest among the women angel investors. When asked which ESG area is crucial to their investment decision, 40% of the women angel investors say it is the environment and therefore companies that promote the green transition. 23% of investors say social impact, and 9% say that diversity in the founder team is crucial to their investment decision. However, approximately one-third (28%) of the women angel investors also state that none of the three topics are crucial to their investment decision.


Investing in women entrepreneurs is highly valued by many

When not having to choose between green transition, social impact and diversity, 50% of women angel investors state that investing in women co-/founders is crucial or important to their investment decision. At least 68% have already invested in startups that have a women co-/founder on the team. The survey data also seem to indicate that there is an overall positive interest in investing in startups with women (co-)founders, but there is a divergence among the women angel investors with respect to how crucial that is to their investment decision.



 


Recommendations

Based on the preceding analysis, the following five actions are recommended to implement to increase the number of women angel investors:


Investment communities targeting women

Data from the study shows that women investor communities can be a powerful initiative to encourage more women to start angel investing: 79% of women angel investors who are members of investor networks are members of investor communities targeted women that have only been established since 2022-2023. 55% of the women angel investors cite women investor communities as a way to encourage more women angel investors, and women non-angel investors also highlight it in interviews. Since angel investments are typically made together with other investors who share interests and values, it makes good sense. Therefore, it can be useful to focus on investor communities targeted at women to get even more women to take the first step as new investors.


Mentoring and sparring with experienced investors

2/3 of women angel investors point to "Sparring and/or guidance from experienced angel investors (mentoring)" as a top 3 priority initiative to encourage more women to start angel investing. 59% of the investors also indicate "Role models" as one of the top three most important factors. The two measures are interlinked, as both are about being inspired by and learning from experienced investors. It is therefore recommended to investigate structured mentoring programs that can connect new investors with experienced investors.


Greater knowledge and demystification of the practice of angel investing

The women non-angel investors all emphasize that there is a need for demystification and more knowledge about angel investing. Having women angel investor role models is not enough. Better communication about what an angel investor is and how to get started is needed. It should be emphasized that one does not need to be very wealthy, and for example, that one can invest from DKK 50,000, and that one does not need a specific educational or professional background to become an angel investor.


Investment education targeted at women

Investment programs targeted women are considered important by around 36% of the women angel investors. Non-angel investors also emphasize the need for knowledge, including how to find investment cases and how to screen and select the right investments. When starting as a new investor in investment programs, new investors also get to know other fellow investors to invest and/or exchange knowledge. This is why investment educations targeted at women and possibly coupled with mentoring, could be a good initiative.


Better and more transparent tax policies

More optimal tax regimes are mentioned by some of the women respondents in the study (both investors and non- investors). It is unclear from the study what specifically is wanted. However, it is a known problem in the angel and startup investor community in Denmark that Danish tax rules are not optimal for growth companies, which several political and industry organizations, such as The Confederation of Danish Industry, are working to change 38 . This is especially relevant for syndicate companies with more than seven investors where stock taxation is applied (in Danish: lagerbeskatning), which creates barriers for small ticket-size investors to participate in syndicate deals10 . As syndicates are often a good tool to minimize investment risk because more investors can join forces with smaller ticket sizes, it is recommended that politicians revisit the tax regulation of syndicate companies. In addition to encouraging investment in startups in general, a change could probably also promote diversity in the startup and investor community by enabling even more new (women) investors to get started.


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