Across media, academia, and in the workplace, there are glaring gender inequalities that are impossible to ignore — and the repercussions deal women a poor hand in countless ways. When it comes to money, women earn less than men, get less funding than men when they start companies, and even when it comes to generating capital by investing are less exuberant than men (Survey results, 2022)
Why are women lagging behind in investment decisions?
The key reasons behind gender disparity in investment dollars are widespread, nuanced, and not always evident in data reporting. Let’s explore some of those reasons:
● Limited investment potential
In most societies, women valiantly take on the explicit burden of being the “default parent,” responsible for creating and raising a family which reduces their lifetime earning potential — and eventually, their investment capability. Over their career life cycle, women step back more than men, for having children. There is biology behind this decision, as also social pressure. This pushes back THAT promotion, THAT pay raise in their mid-30s, which sets the foundation for higher pay and position in their 40s. Even worse, they self-select themselves into lower paying jobs from the very beginning due to the notion that a less demanding job offers future flexibility to raise children. A lowered earnings stream implies limited investment potential volume in/for the future.
● Saving behavior dominates investment behavior
Survey data reports that overall women save less than men, partly for the above-mentioned reasons, and when they do, they tend to save more than invest. Women’s attitudes to risk, some of which are learnt over time from family and society in general, impact their investment decisions. Their increased longevity as compared to men, implies that they are less likely to invest in high risk-high reward ventures, and rather build a long-term steady return portfolio. Survey data also seems to indicate that investing in sustainability is a theme for female investors, so investment behavior is calculated and potentially slow.
● Investment behavior: cautious sans exuberance
Women do better research when they invest and use stop losses more when they trade. The mantra seems to be “Tread linearly and carefully in investment,” a correlation echoed by women’s behaviors in their professional careers.
When reviewing the behaviors of single men vs. women, these metrics seem to be tilted against single women. Empirically, single women are less likely to participate in the stock market, and if they do, they are less likely to park their portfolio in risky assets. The fraction of risky assets in women’s portfolios increases after their marriage, while it declines after divorce ( Love, DA)
Surging forward: Trailblazers
Whether you are already investing or just beginning to explore investments, do not be disheartened. Women trailblazers abound, and here are just a few names who have gained respect and credibility trailblazing investors.
● Geraldine Weiss (1926–2022) is one of the trailblazers in a male-dominated field, and is known for her value-based, dividend-oriented stock-pricing strategy. Born in San Francisco, she learned about investing through conversations, reading and studying business and finance in University of California-Berkeley. Because she was a woman, no investment firm would hire her for talents, and she ended up starting a newsletter in 1966 at the age of 40. She published her newsletter, Investment Quality Trends for 36 years till she retired in 2002, where she handed it to Ke lley Wright.
● Then there is Deborah Farrington, t he co-founder and Managing Partner of StarVest Partners, a New York City based VC firm, founded in 1998. She is one of the pioneer investors in Software as a Service (SaaS).
● Ophelia Brown is the founder and Managing Partner of Blossom Capital, one of the few female- founded funds back in 2018. Blossom Capital invests in Series A startups in finance, design, marketplaces, travel, API-first companies. In 2022, Blossom Capital raised a fund for $432 million for European based Series A startups, making it the largest of its kind in Europe.
● The waves of change are also evident in Asia, the largest female-only angel investor network in the Asia Region. Maaike Doyer is the founder of Epic Engels, an Angel investor network that invests in Asian early-stage startups across all verticals.
Call to Action
Lifelong learning and community both empower women to advance their own interests. Here are some recommended resources to help you overcome disparity and thrive in your career.
https://www.linkedin.com/company/thefemalefundersclub/about/
https://www.hbsangels.com/bootcamp-advanced
https://www.sictic.ch/academy/masterclasses/
https://www.sginnovate.com/event/angelcentral-master-class-angel-investing-workshop
https://www.shoosmiths.com/our-responsibility/sphere
https://catalystimpactinvestmentclub.com/where-you-can-find-us/
Angel groups
https://www.westcoastangels.net/
https://www.ecoastangels.net/about-us
https://www.newyorkangels.com/
https://www.businessangelseurope.com/
Conclusion
“Ambition is infectious,” as trailblazer Ophelia Brown once said.
Be prolific with your capital. You never know who you are inspiring with your own trailblazing behavior!
