Female Angel Investing: Advice From 3 Industry Leaders

In a world teetering on the edge of economic and cultural upheaval, one interesting trend gives reason for hope. That is the number of women starting businesses in unprecedented numbers. In April, Forbes reported on findings from a Gusto report which showed that 49% of all new businesses in the U.S. in 2024 were female founded- a 69% increase since 2019 and the highest share recorded in the report’s five-year history. Yet a funny contradiction also exists in the parallel gap in venture capital allocations. Data shows that sole female founders received an average of just 2.4% of global VC funding over that same period, a figure that has not budged above a single percentage point in the industry’s history.

So if women are starting businesses at record rates, with little movement in venture dollars, the key question is who is writing them checks?

A potential answer lies in the rise of female angel investors. While total U.S. angel investment dropped from $22.3 billion in 2022 to $18.6 billion in 2023, the share of women in angel investing surged to 46.7%, representing a 39% increase in two years. It marks a remarkable shift in a space long dominated by men, signaling a new era where women are shifting norms and vying for a more inclusive and sustainable startup ecosystem.

I spoke to three prominent female angel investors and community leaders: Marcia Dawood, Loretta McCarthy, and Marion Siboni. Each of them stepped into the world of investing without a roadmap and are now on a mission to redraw it for others. Together they shared six key lessons from their experiences in the female angel investment ecosystem, what to look for and what to avoid in a shifting landscape.

1. Angel Investing: Start Small and Learn as You Go

“I didn’t even know what angel investing was when I walked into that first meeting,” says Marcia Dawood, former chair of the Angel Capital Association. “But I knew right away this was something powerful, and I looked around and thought, wow, too few women are part of this.” Today, Dawood is determined to do what she can to change that. She sits on the SEC’s Small Business Capital Formation Advisory Committee, has invested in dozens of early-stage companies, hosts The Angel Next Door podcast, and recently published a book “Do Good While Doing Well,” which she describes as a 101 for women who want to turn purpose into portfolio power.

“There’s an intimidation factor,” she says. “You feel like you have to know everything before you begin. But men don’t wait to be experts; they jump in.” So, what’s her advice to women who are curious but over-cautious? It’s straightforward – ask! “Start small, ask questions, and learn as you go. There’s no shame in not knowing,” she adds. “There’s only risk in never asking.”

2. Angel Investing: Back What You Believe In

Dawood is also determined to bust the myth that investing in causes you care about do not equate to smart financial decisions. “Some people hear ‘impact’ and assume they won’t see a return. That’s simply not true,” she says; you also don’t have to be ultra-wealthy or a financial guru to become an investor.” She wants more women to know that there are smart, savvy ways to back companies doing good and still generate solid returns. “You can do this anonymously. Quietly. Strategically,” she says. “It doesn’t have to be a personality shift. It just has to be a mindset shift.”

The mission to make angel investing more accessible to a broader and more diverse group of people is key for Dawood, which champions the inclusion of non-accredited investors via debt crowdfunding platforms like Honeycomb Credit and donor-advised funds that support mission-driven startups. By funding diverse founders and bringing more women into cap tables, Dawood says, “you break the cycle of exclusion, but creating businesses that represent diverse needs, go on to hire inclusively and grow sustainably.”

3. Angel Investing: Look Beyond Pattern Recognition

It was that same cycle of exclusion that motivated Loretta McCarthy to leave her career on Wall Street for Golden Seeds, one of longest-standing angel networks in the country, focused on women-led companies, where she is now Co-CEO and Managing Partner. For McCarthy, it was a simple observation she couldn’t ignore: mentorship alone wasn’t enough to move the needle. “There were all these groups mentoring women entrepreneurs,” she explains, “but almost none writing checks. We said, ‘We can mentor all day, but if nobody funds them, we’ll never know what they can do.”

Since then, Golden Seeds has invested over $180 million in female-led companies and has 300 members. Yet McCarthy shares they don’t just back women founders; they cultivate a new wave of female investors. “We bring in new angels all the time,” says McCarthy. “People who want to learn, collaborate, and see their capital make a difference.”

4. Bet on the market. Back the Edge. Believe in the Team

I asked McCarthy what advice she has fort these new angel investors in spotting the right investment. She shares her experience has taught her to prioritize three key factors: a big market, a unique solution, and a team that can execute. “We ask, is it a large enough opportunity? Is the product or service differentiated or protectable? And do these founders have the grit and leadership to build something lasting?” she says. And when it comes to repeat mistakes? She shares that capital often misses the mark, not just on women founders, but on entire markets by looking for the same thing over and over again. “Pattern recognition can be a trap,” she says. “You keep backing the same kind of founder because they remind you of the last guy who made you money.” That mindset favors pedigree over potential. “We’ve seen Harvard and McKinsey types and others with scrappier paths,” she says. “What matters is: do they know their market, their numbers, and what it’ll take to win?”

4. Great Investments Start with Prepared Founders

Even the most innovative ideas can fall flat if founders are not ready. Marion Siboni, CEO of Le Creme de la STEM, a global network that connects early-stage female founders with investors and operators, like Dawood and McCarthy, sees it all the time. “One of the most common mistakes I see,” she says, “is people pitching too early.” For angel investors, that means looking beyond the pitch deck to assess how deeply a founder understands their market, has validated their customer base, and can back it up with numbers. As Siboni puts it: “The best funding is still revenue.” That includes obsessing over user feedback, nailing a go-to-market strategy, and showing traction beyond hype. Siboni urges investors to value substance over sheen. “Customer discovery isn’t a one-time exercise,” she says. “It’s a constant cycle. If a founder isn’t living in that feedback loop, they’re not ready.”

6: Angel Investing Starts Closer Than You Think

Siboni also shares that there needs to be an element of realism around where many women founders get their first check. “Not everyone can afford to bootstrap. But a lot more people qualify as accredited investors than they realize,” she says. “I have seen friends, family, and close community members often make the first, crucial bet.” She shares that this approach can lower the financial and psychological pressure for founders and investors alike. “It doesn’t have to start with a terrifying pitch competition,” she adds, “sometimes it can be as simple as a conversation.”

While they may come from different corners of the angel investing ecosystem, Dawood, McCarthy, and Siboni share one key takeaway: by expanding the scope of who gets funded, demystifying the fundraising process, and equipping women with tactical tools, the opportunity is far greater than any one startup or investment. It creates a flywheel to keep pulling more women in and building a more inclusive, sustainable future for early-stage investing. As Dawood explains “You’re not behind. you’ve just never been invited in. But once women understand how angel investing works, they realize they absolutely belong at the table.”