One angel investor wants an investment portfolio full of women.
Jonathan Sposato, a Seattle-based entrepreneur and the CEO of photo editing software PicMonkey, made a bold announcement last week at the Seattle Angel Conference that he’d only fund companies with one or more female founders.
Women often have a more difficult time securing funding—numbers from CrunchBase show that companies with female founders only make up about 19% of seed and angel investments, and that number dwindles down as companies progress to each funding stage.
But the good news is the number of female founders are on the upswing. According to that CrunchBase data, the percentage of startups with at least one female founder rose from 9.5% in 2009 to 18% in 2014.
“Female entrepreneurs do have a harder time getting traction—whether that’s raising money, getting their concepts across, or even recruiting,” Sposato said in an interview with Mashable. “You can’t just take those issues and not do something about it. If you feel passionate about something, you have to be the catalyst.”
Sposato says part of the problem comes from investors’ tendency to pattern match, or support startups that resemble other successful companies they funded that got off the ground. And those successful companies are more often led by men.
“We need to pivot our brains to think differently about how we define what gets to a successful outcome,” he said.
Sposato has been vocal about his support of enhancing women in tech in the past, speaking at the Seattle Women’s Startup Weekend in 2012. And PicMonkey succeeded, in large part, because of its female users, who make up about 80% of its audience.
Despite Sposato’s declaration, his current investment profile isn’t stacked with female founders. He invested a $1.4 million seed round in and serves on the board of Vizify, which has three male founders, and was one of the angel investors for exercise app EveryMove, founded by two men.
“If I had been more intentional and more aware and more thoughtful, I think things could have been different,” Sposato said, adding that the male-driven companies he has a financial stake in have made an effort to onboard women in recent years. “I don’t think all male companies are bad—those aren’t bad products, bad companies, bad people…Moving forward, I’m taking a much clearer stance.”
But one woman he has supported from the get-go is Lisa Maki, the CEO and co-founder of Pokitdok, an e-commerce site for health care services. Sposato said that Maki came to him worried about getting her startup off the ground because she didn’t fit the mold of the typical Silicon Valley archetype—she wasn’t in her 20s, and she wasn’t a man.
“She has gone and tried to raise money in various investor pockets and wasn’t getting much traction,” Sposato said, adding that he then committed to be her lead investor. “PokitDok is doing incredibly well, and we have amazing investors.”
“She’s an example of where you persevere and you’re realistic about the challenges women face today and you’re hopeful, you can get there,” he said.
Maki applauded Sposato’s commitment to raising up women in the startup industry.
“Given his outstanding track record, he recognizes diversity in entrepreneurship is a good thing, not only because its the right thing to do, it’s the smart thing to do as the returns show,” Maki said in a statement. “Jonathan gets that women can bring inherent advantages – from thinking through an issue differently to recruiting top female talent.”
Sposato said he’s been overwhelmed with the responses flooding into his social media accounts, saying it’s been “99.99%” positive and ranges from support for the declaration as a sound investment strategy to more emotional responses. And a number of other male investors have also reached out to him to give kudos.
But he says he’s also been caught off guard by the few negative responses that have reached his inbox.
“I’m surprised that there’s still .01 percent of people who seem confused about the state of the industry and how tough it is for women or they’re confused about what I said,” he said.
Sposato says he’s even been called “sexist” for choosing to only back female-founded startups.
“But ultimately, I’m investing with my money,” he says. “And this is how I choose to invest.”