Next Act Fund is an organization that was founded by women in Pittsburgh to invest in female led companies. The goals of the Next Act Fund are 1) increase the personal wealth of members 2) support/invest in women entrepreneurs and 3) educate women in this asset class. To that end in addition to investing, we also provide educational seminars about angel investing aimed at younger women.
As members of the Angel Capital Association (ACA), a team of Next Act Fund’s investors go to their summitt every year. This year’s summit, however, was notable for its theme centering around diversity and inclusion in both angel investors and entrepreneurs. Last year, women were featured only once in a breakout session discussing women-focused funds. This year, the first presentation was titled “The Things I’ve Learned about Investing in Women,” and sessions included “How Women Are Changing the Angel Field,” “The New Breed of Seed VCs” and “How Can We Continue to Fund Diversity”.
Women represented about a quarter of the attendees – a slightly larger proportion than last year – but the new focus on women was energizing . There were many more women speakers than last year, including multiple keynote speakers. In a much more emphatic way than in 2017, women were on the podium, pitching for dollars, speaking on panels and being recognized as power players. In the short span of just one year, women were recognized for showing up and playing well in the traditionally male dominated VC and angel world.
As you may know, women-owned startups are shown to have a 35 percent higher ROI than their male-led counterparts. Women control 51% of the wealth, but account for just 20% of the funds invested in startups. Women are often over-mentored and under sponsored, and less than a quarter of funded startups are led by women.
Identifying good investment opportunities was also a major focus of the conference, and a major part of what the Next Act Fund does daily. Angel investing is in large part about picking the right entrepreneurs to back, and because nearly ⅔ of the companies receiving angel funding are pre-revenue, what you are really investing in is the team. Most companies looking for seed funding have 2-6 people on the team, and it is critical that each member be evaluated – not just the CEO. Almost a quarter of startups that fail, do so because they have the wrong team in place, so angel investors should devote both time and resources into understanding the team.
There is a benefit to investing in an experienced CEO, as an ACA presenter calculated that experienced CEOs get 5x the return of first-time CEOs. Over 60% of funded companies have first-time CEOs, however Next Act Fund has also found with its founders thata GSD (Get Sh!# Done) type of person is far preferable to one who has lots of credentials but takes little action.
To date, Next Act Fund has made three investments and is consistently looking for others that meet our criteria. We are thrilled to be a member of the Pittsburgh Technology Council, because it gives us such an excellent entre into the start-up community, but also to the corporate community where so many of our investors still work. If you are interested in learning more about what we do, we have screening meetings and informational sessions that are held at the Tech Council’s offices! We’d love to have you.
Related Article: Read about these women who are also rising in success in the Pittsburgh area.