This article first appeared in Personal Wealth, The Edge Malaysia Weekly on October 14, 2019 - October 20, 2019
With the number of successful high-growth start-ups in the region, more angel investors are looking to put their money in what they hope will be the next technology unicorn. In the light of this, a growing number of corporate executives can be seen entering the angel investing space, especially those who have spent years in their respective fields and are able to advise entrepreneurs and emerging start-ups.
While this is encouraging, there is still a stark difference between the number of male and female angel investors. According to a report by the University of New Hampshire’s Center for Venture Research, women only represented 29.5% of the angel investor community last year, up 19.5% from 2017.
Realising this gap, Singapore and New York-based angel investor Christina Teo launched she1K — the world’s first invitation-only network of female executives. The global network connects corporate women from all industries to invest and participate in the growth of viable start-ups with the traction to scale.
“There is so much industry experience and market insights that these women can bring to the table. However, investing — or specifically angel investing — is not something corporate women are exposed to or would prioritise pursuing. she1K wants to facilitate that,” she says.
Teo, who has worked at companies such as technology giant IBM, hardware provider Acer, digital electronics manufacturer 3Com, web services provider Yahoo! and UK carrier O2, decided to launch the network after returning to Singapore and learning more about its growing start-up landscape. She notes that back then (in 2016), the programmes for start-ups, venture capitalists and angel networks were less developed.
The following year, Teo launched Startup Asia Women, a community aimed at fostering education and connections for women aspiring to launch or have launched start-ups. She subsequently created a series called WomenChangemakers, which profiles strong corporate women or corporate women turned entrepreneurs as role models, to inspire women entrepreneurs who are developing their careers or are in transition.
she1K is Teo’s latest project. It has been active for eight months and its members listen to 10 start-up pitches every two months.
Teo explains that the network is by invitation-only because it wants to connect people who are of similar calibre, even if their backgrounds, industries, functions and markets are diverse. The aim is to rally 1,000 women executives globally, hence the name.
There are benefits for women executives who get involved in the start-up ecosystem as it could help them in their day jobs, says Teo. Corporates are increasingly working with start-ups, venture capital funds and other programmes to incubate start-ups and help them solve problems that would otherwise be put on hold. So, engaging with start-ups is one of the more effective ways to keep abreast of innovation as well as disruptive business models.
“Many corporate executives are empowered by their corporate identity and the nice rolodexes they have accumulated. However, they do not get much opportunity to use those connections or build their personal profile. By angel investing, they are motivated to learn and help connect the start-ups with useful business leads. There is skin in the game, so there is a higher commitment to help and nurture,” says Teo.
she1K consolidates a lot of the effort from scouting startups, screening them, facilitating their pitches and validating deep dives, among others. This saves the start-ups the hassle of dealing with investors on a one-on-one basis and saves investors the hassle of having to go through the entire process.
Corporate women can join one of two tiers of membership at she1K — professional or executive. The minimum requirement for professional membership is 15 years of corporate experience with a fair level of industry consistency with established companies and brands (that are not small and medium enterprises).
Meanwhile, the minimum requirement for executive membership is 20 years of corporate experience and credentials in a regional function or country leadership role in well-known companies and brands.
Those who do not meet these requirements can join she1K as a regular angel investor. This is open to both aspiring and seasoned male and female angel investors.
To get involved with the she1K community, members can contribute US$1,000 (valid for one year) or US$2,000 (valid for four years). The pooled contributions will be used to invest in start-ups via a special purpose vehicle (10% of the pool will be used to pay related fees). The contributions provide members with access to opportunities such as investing, sitting on boards, networking and attending workshops and events that enhance knowledge and connections.
As the contributions are pooled, there will be no direct returns to any individual. Any gains from potential exits will go back into the pool to support more start-ups.
However, members do have the option of investing directly in a start-up, either individually or as a syndicate, which is structured as a special purpose vehicle. she1K will review and facilitate all arrangements for free.
“The pool allows us to have some leverage or to be able to supplement a syndicated round. In this round, we ask each member if they are interested to invest in a start-up that has already been shortlisted. If they are interested, they can invest varying amounts. The minimum investment amount is S$10,000 per start-up,” says Teo.
“Because we understand corporate women, we want to create a low barrier of entry. But if the amount is too low, start-ups will not want to deal with them individually. Hence, the syndicate makes so much sense.”
Teo says it is gratifying to be able to help young companies by making a small initial investment along with other corporate executives. By tapping the entire she1k network and extended connections, the assistance given to the start-ups is not limited to the angels investing in them.
“As a syndicate, I am not going in alone and I get to learn from my peers. Men already do this a lot — there is a stronger Bro Code and fewer-questions-asked paradigm. Women tend to ask a lot more questions and want greater assurance about even minute details,” she says.
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