Female Investor Podcast

How Mitigating The Loss as a Female Angel Investor Guest Gwen C. Edwards & Rose Vitale

Why Mindset Doesn't Really Drive Creating & Keeping Wealth (No One Talks About This) Steffi Baker

How Women Can Support Women Entrepreneurs As A Female Investor Guest Cherilyn Murer

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Female startup funding is lacking compared with funding for male-driven teams, even though female founders outperform male founders when it comes to delivering returns. A big reason for the success of women-owned businesses is that the founders know what they want out of their business and how they are going to get there.

A great business idea can only go so far without the right people behind it. A recent report from CB Insights lists the top 20 reasons startups fail. “Not the right team” was the number 3 reason for startup failure, and “Disharmony among team/investors” was number 12. (“Not serving a market need” and “Running out of cash” were the top two reasons for failure.)

When you’re thinking of investing in a startup, it’s important to look at more than just the numbers. Seasoned investors frequently say they’d prefer to work with a second-rate idea that’s backed by a first-rate team than vice versa.
But how do you determine whether the founding team of a startup is the real deal or if the founders are just extremely well-versed in giving all the right answers?

Here are some ways to assess a founding team before you invest in a startup.

Look at the Plan for How a Company Will Use Your Money

Things can turn ugly fast when a group of founders gets their hands on investment money. There could be four founders with four very different ideas of how investment money will get used, leading to tensions among the team and disharmony among investors.

Avoid this by getting a sense of how aligned the founders are on how your investment will be used. A founding team with a cohesive plan for the company’s future will be able to give you a good idea of how the company will use your money. Once they’re in agreement, and you as an investor are satisfied that your funds will be used in the best way to move the company forward, you can feel more comfortable making the investment.

Establish What Each Member of the Leadership Team Brings to the Table

There can only be one CEO, one COO, one CTO, you get the picture. The problem is, often startups are the brainchild of a group of people who have very similar interests and skills.

A strong founding team will each bring different strengths and skills to the table. They’ll complement each other, not compete with each other. A stable founding startup team will be able to lead the company cohesively, embodying as a unit the qualities of a manager, including being able to forecast for the long- and short-term. They’ll also have the necessary technical skills to start building their product and will be able to recognize what hires they need to make.

Pay Attention to How the CEO Works with the Team

A CEO who insists on meeting with investors alone, without the founding team, could be someone who either doesn’t consult with founding team members for decision making or doesn’t believe in their ability to handle investment negotiations. While the CEO should definitely be involved in investment negotiations (in fact, consider it a major red flag if she isn’t), they shouldn’t be the only member of the founding team that you meet with.

If you do meet with the CEO and the rest of the founding team, look for synergies between team members. There should be mutual respect and an acknowledgment of each other’s strengths and weaknesses. Be wary of any CEO who constantly cuts off team members or jumps in to “clarify” what someone else is saying. Egos can be big in CEOs, and that can cause major problems down the road for investors.

What other things do you assess when you’re considering investing in a startup? We’d love to know for an upcoming podcast!

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Beth Caplan: As Chief Strategy Officer, Beth works with Rainforest Partnership’s CEO and leadership team to design and implement strategies across the organization: from top-level strategies such as vision and mission; to the operational strategies that inform campaigns, partnerships, messaging and initiatives. A professional analyst and strategist, Beth’s 30 + years of experience is rooted in a two-decade career at NASA’s Johnson Space Center, before moving to the nonprofit sphere. Beth has been part of Rainforest Partnership since inception, first as a strategic planner, later as strategic advisor to the Executive Director, and now also as CSO where she works with the team to formulate and execute strategy at all levels of the organization. Beth’s 30+ years of experience and lifelong learning span the public and non-profit spheres. Her last role at NASA focused on advancing space commercialization and strategic alliances for the International Space Station Program. This required her to develop a sensitivity to private sector thinking that she brings into her work at Rainforest Partnership, along with her project management and planning background. She seeks to understand patterns and trends that might be otherwise lost in noise and disorder. Her natural inclination is to look at any given situation and try to understand not just what is happening, but why; to look at every experience as one from which we can gain learning and use it to improve what comes next. Hope is at the core of Beth's purpose:  hope for the rainforest; hope for our planet, and hope for our shared future.  That's why she chose to join the Rainforest Partnership team, an organization committed to renewing hope and optimism that delivers on that commitment by achieving outsized impact -- a tangible demonstration of hope made manifest in the world.

Many times I get asked what do Female Private Investor invest in? This questions has many answers as not all female investors are the same. Often times female investors will invest in start-ups, Private Equity Firms, Venture Capital Companies, Angel Investing Groups/Clubs, Real Estate Funds, & Hedge Fund Investing.

Its important as a female private investor to understand the fundamentals of each of the investment opportunity. For example I often get asked what type of companies due I invest in? To answer this question is simple I invest into companies I understand first and foremost. Second I invest into companies were I have met the founders, spent time with there company, & team members. This helps me get an understand of how they run there business, where I can add value or not. This is a key component of my investing strategies.

I wrote a book called “The Science of Becoming a Female Investor” (The Secret Guide to Becoming a Wealthy Female Investor). My hopes & dreams for the book is to inspire more women to become investors. Remember the more we know the less we are afraid of something. This is 1 of the most important factors to become a successful female investor and Female Private Investor