What it REALLY Means to Support Women in the Workplace

What if I offered you the opportunity to make as significant an impact on the world as you do in your charitable endeavors AND potentially receive a return on your investment? That opportunity actually exists--all you have to do is invest in female founded startup businesses.

I have been an attorney representing early-stage companies that are raising money in return for an ownership stake in their businesses, commonly referred to as a “startup lawyer”, for the last 15 years. In the course of that work, I’ve seen many new business owners secure the funding they need from investors to bring incredible new technologies, products and services into the marketplace. There have been years where that process is more challenging and others where capital is plentiful but what has not budged are the abysmal statistics relating to the venture capital dollars invested in startups with all women teams. TechCrunch has recently reported that, so far this year in 2024, companies with all-women founding teams have raised only 2.2% of the venture capital allocated for the year!!!!

Even more astounding is that this situation is occurring in the face of the fact that businesses founded by females provide a better return on investment than those founded by males. According to Forbes, when private tech companies are run by women, they render a 35% higher return on investment than those run by men.

Given the many women led startup companies I have helped through their own difficult fundraising journeys, I have become part of a nationwide movement to educate people about the exciting opportunities made available by these circumstances. I have joined an organization called “All Raise” which started in 2017, with 36 senior female investors who had a vision to make tech more accessible, equitable, and diverse. They quickly sparked a grassroots movement that became a startup non-profit organization that includes entrepreneurs, venture capitalists and allies across the United States.

How can you help this movement and these companies and simultaneously reap potentially significant benefits for yourself? There are many “angel” investor groups and funds worldwide that will enable you to easily invest as little as $1,000, not a huge sum, in a diverse set of female founded new businesses. Here is a short guide to the angel investing process: New businesses typically cannot get a bank loan because banks usually require that the business (or its owner) has assets valued at least as high as the amount of the loan in order to secure the bank’s lending of money to that company. Early-stage founders usually lack the required assets because their companies are just starting out and have to find other funding sources. As a result, owners often max out their credit cards to put the very basics in place for their businesses and soon realize that they cannot get very far or certainly grow enough to scale past those beginning stages without selling some ownership in their companies. A lucky few have friends or family to lend them money or purchase an equity stake, but most do not. At this point, one option is to seek what is commonly called “angel investors” who invest at the very early and most risky time in a company’s lifecycle.

Some angels are high net worth individuals who invest in startup companies. Others are more sophisticated and raise funds from their own sets of investors and then use those funds to invest in many different early-stage entities. Then there are angel networks, which raise money from many individuals and allow each of those individuals to choose which of the startups they identify as good investment targets to put their money into on a deal-by-deal basis. The tremendous benefit that each of these groups provide is that they engage networks of experts in finance, marketing and other industry specifics to decide which entities to invest in. These experts spend months conducting what is commonly called “due diligence,” studying each prospective startup company’s pitch, team, financial projections and more before deciding to recommend that their groups invest in that company. This gives you, as a less seasoned (or unseasoned) investor, the confidence in where your money is going and the possibility of a realizing a return without worrying about making those choices. It also allows you to own pieces of several different businesses while putting in one relatively small sum.

The other beauty in investing in female founders through angel groups is that most of these organizations have a particular type of business they focus on. Often, they spotlight companies geared toward improving female health technology and care, businesses engaged in sustainability endeavors or other industries that are making a real difference in our world. In the last year alone, I have represented a startup producing an at-home UTI test, another creating smoothies for nursing moms with colicky babies and a business enabling payment of one membership fee to belong to multiple fitness clubs.

To answer my initial question, each of you has the opportunity to invest in a female founded startup and thereby help launch a whole new business that will hopefully grow and create new jobs and a better future for our children and grandchildren. I would argue that it is akin to donating to an important charity. On top of that, you may truly enjoy supporting the products of the business, keeping up with its success, making introductions that will benefit the company’s growth path and joining a network of other like-minded women in the process. Then there’s the ultimate goal which is very much a possibility….one of your investments may get sold to a bigger company or go public, making you a nice financial return. Maybe you will use that extra cash to buy yourself something extravagant you never would have considered spending the money on, or maybe you will put a down payment on your child’s first home or maybe, just maybe, you will turn around and put those earning back into another female founded startup and start the cycle all over again!