'Gold Star'
Jim Estill, who started a technology distribution business from the trunk of his car that had sales of $350 million before he sold it, has been a Golden Seeds member for 18 months and is part of the group's 15% male contingent. Estill, who's made more than 100 angel investments, said he was attracted to the group because it allowed him to diversify beyond technology investments since he felt comfortable with the group's due diligence process.
"Golden Seeds is a filter, I know if they make it through the process, they have a gold star," said Jacki Zehner, a former partner and managing director of Goldman Sachs and co- chair of Women Moving Millions, a group of women who have made $1 million gifts to nongovernmental organizations. Zehner has invested in both Golden Seeds funds.
Potential investors in startups should be aware that it's risky and early-stage companies can fail, said Estill, who was on the board of Research In Motion Ltd., maker of the BlackBerry smartphone, from 1998 to 2011. Bankruptcies accounted for 27% of the exits from the angel investment market in 2010, according to the Center for Venture Research.
Personal Returns
Hanbury-Brown said her personal return on investing in women-led companies since 2005 is 28% in realized and unrealized gains. The Standard & Poor's 500 Index has returned 24% from 2005 through the end of March. Annual returns for angel investors whose companies were either part of a merger, acquisition or IPO range from 24% to 36%, the Center for Venture Research said.
Cognition Therapeutics Inc., a Pittsburgh-based Alzheimer's disease research company that began in 2007, received part of its $2.5 million in the second round of funding from Golden Seeds, said Susan Catalano, chief science officer and founder. In addition to the money, Golden Seeds connected Catalano to other angel investor groups as well as a Golden Seeds member, Nada Jain, who's on the board and whose background as a scientist and patent attorney helped the firm.
"We're trying to support women entrepreneurs by expanding the pool of resources," said Zehner of Women Moving Millions. "We're trying to level the playing field, and one playing field is access to capital."