It’s an unusual proposition: 100 members, investing a minimum of £20,000 over two years, and it’s just for the girls.
“Women don’t find angel investing an easy process,” says Sofat. “Even businesswomen who have successfully extracted equity from their firms and are keen to invest in others find angel networks difficult. They are typically male-orientated and target an older demographic. This can be off-putting.”
Sofat’s new network is completely different. All the members are female. And Sofat expects the average age to be at least a decade younger than existing angel networks. Their money goes into a single war chest and an investment panel reviews applications from SMEs across all sectors in the UK to pull up a shortlist that meets the Addidi invesment criteria. The members then vote and a majority of two thirds or more carries the decision.
“Members can be as involved as they want to be,” says Sofat. “We don’t need all members to take part in every vote. If one of our investors is busy, then the rest of the members can reach a decision without them.”
Female angels tend to be more cautious with their investments than their male counterparts. This is why Sofat allows members to invest at a smaller level: “£20,000 is a relatively small sum,” she says. “Usually angels have to put up £200-300,000. Many women are reluctant to do so at that level. This way, we pool the resources. Their money goes further and it allows them to invest that sum in four or five companies. Ordinarily, £20,000 may not even be enough to invest in one”
The network is due to launch in January and Sofat has already been inundated with applications from entrepreneurs (both male and female) eager for investment.
But is this really the right time to be launching an angel network” Is the downturn making people more cautious with their money?
“The credit crunch may slow membership rates,” says Sofat. “But I think it’s a good time to invest. Valuations are more realistic and there are more companies looking for equity finance than ever before.”
If you’re interested in getting involved, check out the Addidi website