According to Finance South East, the UK is home to more women millionaires aged between 18 and 44 than men. Despite this, less than five per cent of business angels are female. Sally Goodsell, CEO of Finance South East, believes new businesses are missing out on a huge area of potential funding, while wealthy women are missing out on an exciting and potentially lucrative form of investment.

So why aren't there more female investors? "Women don't have the same social and business networking opportunities as men," claims Goodsell. "Men often discuss business deals over a game of golf and women miss out on this." She also believes that a female investor may feel conspicuous in a room where 95 per cent of other investors are men.

In this vein, Finance South East is launching a "Women Investing In Women" scheme providing awareness events, training sessions and networking opportunities to help more women become business angels.

Similar schemes have proved successful in the US. "Women will come together, learn about investing and perhaps do some investments together," says Goodsell. "There are lots of bright, intelligent women out there and we want to show them the risks and rewards of the market."

The scheme is also designed to help women entrepreneurs—whose businesses are on average funded with a third less capital than their male counterparts—by specifically encouraging investment in female-owned firms. "We are trying to help build confidence in women entrepreneurs to ask for the money they need," says Goodsell. "A woman entrepreneur will only ask for £20,000 when she really needs £100,000."

She believes it's intimidating for a woman to ask a group of male investors for funds—particularly for a "female" product. "A group of female investors might be more understanding, saying 'I'd use that product' and see the opportunity where a man might not."

Brigitte Baumann, CEO and founder of European angel investing services company Go Beyond and a board member of the European Business Angel Network (EBAN), agrees that getting a broader and more diverse group of people—including women—to invest in and mentor new businesses is worthwhile. "More and more women are becoming entrepreneurs but not investors," she says.

A business angel herself, Baumann says you don't have to invest huge amounts. She started by investing the equivalent of a few thousand pounds here and there in the businesses of family and friends in 1982, when she was still at business school. "I'm a strong believer that you can be a micro angel," she explains. "I have never invested more than €25,000 [£17,600] in one business at one time."

Baumann is driven by doing well and doing good. "You have to make sure you have another reason to invest besides making money—for example, you want to learn about the sector," she says. Baumann believes women business angels can offer a lot more than just capital. "Female investors can act as mentors as well as conduits and connectors," she says.

Karen Hastings, founder and managing director of Cupcake, a spa and private members' club for pregnant women and new mothers, says the practical advice on product innovation and networking offered by female investors has been invaluable. "Some of them are based in areas where we want to open new clubs, so they have opened doors to potential members and suppliers," she says.

The idea for Cupcake formed from Hastings's own experience of pregnancy and first-time motherhood, plus feedback from her friends. "There was nowhere to go where we could relax with like-minded women and have an adult conversation," she says. So when Hastings started approaching family, friends, pregnant women and new mothers for investment, they immediately understood the concept. With the first club due to open in Putney, south London in March 2008, Hastings has so far raised £750,000 in start-up capital. One-third is debt, one-third is from venture capital fund Trapezia, the UK's first VC fund backing women entrepreneurs, and one-third from individual investors, of whom 95 per cent are women or women making the decision for a couple.

But, as she points out, although many of her investors are female, she has not found it hard to get backing from male investors for a female-friendly product.

Susan James, founder of Art of Accessorising, which sells fashion accessories to women in their homes, has had a similar experience. She secured funding from a variety of sources including a £100,000 start-up loan from NatWest under the Small Firms Loan Guarantee Scheme, savings and private investors-including both men and women.

"The gender barrier isn't an issue," comments James. "I have been successful in securing funding because I have put in the preparation and the groundwork. I found a gap in the market and I exploited the opportunity. Grit, tenacity and determination are part of the formula for success, whether you are male or female."

Useful contacts
• Finance South East www.financesoutheast.com
• European Business Angel Network www.eban.org
• Promoting Women's Enterprise Support www.prowess.org.uk
• Go Beyond www.go-beyond.biz
• Cupcake www.cupcakemum.com
• Art of Accessorising www.artofaccessorising.com

Sarah Hanson