Before the Startup: Angel Investors and Women-Owned Businesses

• In Event: Organizations, Occupations, and Work Section Roundtables
  In Refereed Roundtable (90 minute): Table 21: Gender Inequality

Abstract

Angel investment plays an important role in the fundraising journey of a startup. Angel investors are wealthy individuals who provide entrepreneurs with capital and mentorship to build their early-stage businesses. They are a bridge to securing future venture capital funding. Although most sociological attention has focused on venture capitalists, angels have a better track record of investing in women-owned businesses. This paper examines how angels decide how to invest their money, paying particular attention to their decisions to fund women-owned businesses. Drawing on extensive participant observation combined with in-depth interviews with 13 investors and entrepreneurs, I find that angels share many of the same sexist attitudes and practices that characterize venture capitalists, including (1) blatant discrimination against mothers; (2) persistent gender stereotypes and (3) networking events that are inconvenient and/or unwelcoming to women. However, I also identify three structural features of angel investments that advantage women in business: (1) Self-funding; (2) Hands-on mentorship; (3) Accelerator programs. This research reveals specific mechanisms that promote gender equality in the funding of startups.

Author

• Victoria Dominguez-Edington, University of Texas-Austin