Originally Posted On: https://www.equities.com/impact-investing/women-of-impact-marcia-dawood-and-an-angel-investing-revolution/
Marcia Dawood’s rise from corporate executive to a leader of an angel-investing revolution provides a glimpse of the more equitable future that might be in store in this niche funding market if more women were to join its ranks.
After her 16-year career at Kaplan Education Corporation, through membership in several angel groups and then as head of the Angel Capital Association, Dawood has seen the ups and downs of angel funding directly. Her story represents a big change from traditional corporate jobs to more active and important roles in angel investing, where she fights hard for more funding for women-led startups.
She recently spoke with me to discuss her journey and her pioneering role in this financing arena.
Learning the ropes of angel investing
Dawood moved from working for a company to becoming a powerful angel investor because she saw the hidden promise in the local startup community. She says this about her job change: “I was invited to an angel investing meeting, knowing nothing about angel investing. And I started to see all this cool innovation that was happening right in my own backyard of Pittsburgh at the time.”
This experience hooked her on angel investing, and eventually she left her long-term corporate job to look for new chances that fit her growing desire to help new businesses.
Her main goal today is to help people learn more about angel investing. A common myth about angel investing is that only rich people can do it.
For example, Dawood says, “There’s a lot of people that really believe that the only people who do angel investing are very rich like Kevin O’Leary and Mark Cuban — ‘Shark Tank.’ The whole idea of demystifying this is important. So I ended up writing a book. It comes out in September.”
Opening angel access to more women
As it has become more well known in the last 20 years, angel investment has become an important way for start-ups to thrive. Although there have been some big changes in the angel investing landscape thanks to new laws and technological advances, women’s participation in the field remains limited, with just 22% being angel funders.
Dawood strongly believes that women and other underrepresented founders should have more chances to get funds. Citing a BCG study, she spotlighted women-led startups, which generate 11% more revenue than male-led teams, despite receiving 56% less funding.
This statement draws attention to the big difference in funding and the better success of women-led companies. This is the message we need to be sharing more so than the lack of funding. Women simply get strong results.
And she believes that more participation by women could change the way business is done, making the economy stronger and more diverse. It would also go against the norm. Projects run by women often struggle to get funding; as a result, many talented individuals do not see their business projects to fruition.
Integrating angel investing with your portfolio
When it comes to angel investing, financial advisers play a much more complicated role as they are typically not compensated on private investments. “For the most part, financial advisers have steered clients away from angel investing, however in the last several years clients have voiced their desire to participate in this asset class.,” Dawood says.
Financial advisers usually get paid based on the assets they manage. Angel investments fall into the category of assets under their management, so advisers might not have a reason to support or recommend them. Dawood’s own experiences back this up. She remembers how her financial adviser at first thought her interest in angel investing was just a “cute little hobby.”
However, Dawood says that a change might be happening and supports a broader view of financial advice in which angel investing is seen as an important part of a well-balanced portfolio.
Marcia Dawood
“But I think if more people start to say, ‘Well, wait a minute, I only want to use 3% or 5% of my investable assets to invest in angel investing and that’s what I choose to do,’ then financial advisers should be okay with that,” she says.
This method encourages investors to talk to their financial advisers about their specific interests and goals. It also tries to create a system where small, strategic investments in angels are seen as a normal and valuable part of investment portfolios. These kinds of changes are good for individual investors, but they’re also good for investing as a whole because they help new businesses and spread out investment risks, she said.
Takeaways
By backing and taking part in the angel-investing process, Dawood has made it clear that she wants to make it less mysterious and more open to more people. Most recently, she spoke at Woman of Color Connecting, a summit for entrepreneurs, where she discussed how to achieve free-flowing capital for historically excluded populations. The conference was hosted by the nonprofit organization, the Institute for Entrepreneurial Leadership.
Dawood’s goal is to demonstrate how angel funding can change the economy and bring about new ideas. Her in-depth look at the systemic issues minority groups face when they try to get funding brings to light a key area that the investment community needs to change. To shift investor focus from not purely financial gains to also promoting equity, she emphasizes the impact they can have in fostering sustainable and socially responsible businesses.
She is setting an example for a new group of investors and companies by being open, friendly and helpful to leaders who are often ignored. And success won’t just be measured by how much money is made, but also by how much people’s lives are changed for the better.
