Angel investing: an opportunity for women to

Angel investing: an opportunity for women to gain financial independence

Bravva Angels aims to build a portfolio of 30 startups with female founders over the next three years, with a total financing volume of around EUR 10 million. Ilinca Paun founded Bravva Angels after making an early-stage investment in a startup founded by two women and saw a huge potential in having an entrepreneurial ecosystem that offers more business opportunities to women founders.

By Ovidiu Posirca

How integrated are female founders in the Romanian startup ecosystem and what made you launch Bravva Angels this fall?

Although there is a large number of businesses started by women, the biggest gender gap can be observed when it comes to accessing investment. Female founders are underinvested, as an almost insignificant 2 percent of the total number of transactions listed as venture capital investments go to them, according to How to Web transaction monitoring data for 2021. The most underrepresented are startups with female founders only, who are looking for very early-stage financial support—what we call “the first professional money”—usually from business angels.

This is the sweet spot for Bravva business angels, who are mature and experienced businesspeople and professional investors who see the situation as an opportunity. Female founders need funding, but they are under the radar of many early-stage VC funds. My assumption is that they are not very accommodating with the profile of a young female entrepreneur. In terms of risk, what’s interesting is that research shows that on a global level, women who raise investment usually return higher profits and grow sales faster, which should make this segment quite attractive for investors. How inclusive is the wider European startup industry when it comes to women entrepreneurs?

The statistics are slightly better, but still terrible, with around 5 percent of funding going to women and 10 percent to mixed teams—a bit better than the US, it seems. Data still must be refined and completed as early-stage funding sometimes happens through the business angel community or through crowdfunding, and not all of it is being accurately tracked. The more available data that tracks later stage transactions in Europe and the US indicate that as companies grow, the inclusion of women in boards comes more naturally, and that stages B and above are almost always more successful when women co-lead the pitch/round. But these women usually just hold executive or board positions, they’re not co-founders.

What challenges have you faced as a woman angel investor?

None; I think it is a great opportunity for women to gain their financial independence by investing in startups alongside other types of investments. It is a very risky one, but it comes with the unique benefit that you can get involved and help the founder, contributing with your expertise and network besides

the funding. The money is needed, but even more essential are the resources that come along with it. If all experienced businesswomen started acknowledging how much value they were creating in their professional lives and how this could be multiplied by sharing it with young entrepreneurs, the impact they could generate is enormous. I encourage all businesswomen to learn about becoming a business angel and join us in co-investments, so we can grow our impact together.

What are Bravva Angels’ objectives in terms of investment volumes and the number of startups in its portfolio?

We believe we can raise a capacity to co-invest up to EUR 10 million by 2025. In these next 3 years, we hope to be able to work with at least 30 startups. We have closed the round for Glow2Go and we are about to close our second co-investment within a few weeks. Besides transactions, we want to build a community of resources for angels and startups and to build a membership plan with educational workshops, networking events, and investment opportunities.

How did you select the founding members of Bravva Angels and how will they work with startup founders?

They are ladies whom I have known for a long time and whom I admire greatly for their business ethics, reputation, human qualities, and drive for helping others and generate impact. The process for a female founder applying for investment starts with 2-3 coaching meetings with 2 board members, for investment readiness, followed by gathering feedback from the rest of the board in a dedicated presentation. A unique element of our process is the fact that we invite other female founders and angels to participate as observers and learn from each presentation experience before entering the process themselves.

Are you looking to expand the investor base of Bravva Angels?

Of course. We need investors with a desire to contribute and the ability to dedicate time to founders. Smart money means more than just money. We invest at a very early stage, which brings high risk but also a good potential to nated jury. Multiple studies have shown that we prefer to do business with people like us, those we feel we understand and we can relate to. That’s why Bravva board members are all female angels: we believe we can serve them better as investors, that we can relate and help them through their journey. We believe that learning capacity should rank higher than ambition in the scoring model. At the same time, the capacity to form and lead a team should outweigh someone’s industry knowledge.

get back 3-5x the invested amount within 5 years. We would like to expand our investor base, as we believe we can help young entrepreneurs with more pockets and more brains, as well as obtain great profits, precisely because we boost their growth together.

Are there some core challenges that Bravva Angels will attempt to solve through its investment strategy?

I started this community of angel investors together with a core female angel group after working with 2 great young ladies from the

Glow2Go startup, as their first business angel. Then I helped them raise a pre-seed round of almost EUR 200,000. During the process I realised that their passion for the problem they were solving, their ability to learn and adapt to market responses, the fast implementation of advice, their tendency to “under-promise and over-deliver,” plus their ages (they were 22-23) would not pass the typical screening of the venture capital “boys’ club.” The typical VC describes a “strong founder” as “an industry expert” and most partners place a lot of value on an entrepreneur’s confidence and their very ambitious numbers. Ambition is indeed an important factor, but it doesn’t always lead to resilience; more often than not, it leads to aggressive, unbalanced, and even unethical conduct in business.

As a result, most female founders get discouraged, since this process better matches the profile of the male entrepreneur. Another indisputable factor that leads to them losing investment competitions is the male-domiCan EU policy help more startups with female or mixed founder teams get funding?

I’m not sure. I am not a policy expert.

And I am definitely not an activist, either.

I see this male domination as a temporary phase, which we have also seen in other industries, such as real estate.

Venture capital is a rather new industry in Romania and it is on a journey of refinement and market segmentation, one that all other mature industries have gone through. The concept of “productmarket fit” is valid for venture markets as well, which to me means that new and different players will build the financial infrastructure needed by female founders, and that existing ones will adapt, based on the evolution of the startup base. Female-led startups are good targets for the VC market, which will have to decide how to best serve them.

What are some of the strengths of female entrepreneurs and how can this influence companies’ overall profitability?

I’d put my money on their learning ability, their talent for building a great company culture, and their customer orientation—for sales and marketing success. Today, most businesses need to build an engaging community with their customers as part of their product or service journey. Women excel at that. A study done among US companies showed that sales performance in female-led startups was 65 percent higher than that of male-led startups. This all goes into performance indicators like revenue and profit—a happy customer is a loyal one that brings more followers. A good culture makes people perform for the company at lower costs.