Private Investments: Explore Private Debt, Private Equity, and Angel Investing

Private investing, particularly angel investing, can be exciting, a great way to build community, and just plain fun! When you make a private investment, you could be supporting a female entrepreneur, the coffee shop around the corner from your home, or an innovative start-up in the US or another country. Each investment is unique in terms of financial return and impact.

This chapter will introduce you to the world of early-stage private debt and private equity. Private investing provides opportunities for portfolio diversification and a very personal investment experience. Whether you're an experienced investor or not, you can learn how to assemble a private investment portfolio you love. You can access training, mentorship and collaboration with likeminded women and engage with amazing entrepreneurs along the way.

This chapter will get you started. We'll explain why you might want to invest this way, what you are buying, how these investments work, and point you to resources you can use to find opportunities that align with your values.

Entire books have been written on the concepts in this chapter, and we realize that we cannot do them justice in this introduction. Our intention is to spark your interest in an investment class in which women have been sorely underrepresented—both as investors and as entrepreneurs.

Private investing is, without a doubt, my favorite part of the investing journey, because I've met incredible entrepreneurs, made new friends, and become part of a community of amazing female co-investors. I love it! And so can you.

Anyone Can Invest in Private Companies

There are two primary approaches to private investing—debt and equity. But there are numerous ways these investments can be structured. In its simplest form, private debt is a loan made to a privately held company, while private equity is buying ownership in a privately held company. You can make these investments company-by-company or by investing in a private debt or private equity fund.

Private investing can be quite risky. As a result, these investments were rarely available to non-accredited investors until quite recently. With the passage of the 2012 JOBS Act, which went into effect in 2016, it became much easier for private companies to open up their investment offerings to non-accredited investors, who can now participate for as little as $100. To safeguard against potential financial ruin, the SEC placed limits on how much these investors can allocate to higher risk investments in any given year.*

Because of the risk, financial experts strongly advise that you invest no more than 10% of your total net worth excluding your primary residence in this asset class, unless you have deep pockets or have a larger appetite for risk. Regardless, you should only invest what you're willing—and able—to lose. It's also wise to only invest in businesses that you understand.

Given the Risks, Why Make Private Investments at All?

Women can make world-changing contributions through private investments. We can use our growing wealth to support the overlooked and underfunded female and minority-led businesses that we'd love to see thrive. We can also support innovative products and services that are designed from the ground up with our needs in mind, as opposed to having to make do with the feminization of male products. The more we invest in entrepreneurs and businesses that support our values, the more we signal that their products, services, and companies matter and that we do, too.

Women involved in private investing are addressing significant challenges such as climate change, healthcare, education, and other pressing social issues. They're supporting products and services that enhance the lives of women and children. And they're learning together, having fun, and meeting amazing entrepreneurs in the process.

Address Dramatic Gender and Minority Funding Imbalances

Private businesses, particularly small businesses, matter. They matter to the economy. They matter to our communities. And they matter to women. Small businesses* account for 44% of the US economy and create two-thirds of new jobs in the US.1 Although women and minorities run more than one-third of the small businesses in the country, they have a disproportionately difficult time raising money. This is true whether they're trying to get a loan from a bank or raising money through private structures. The reason they're having such a hard time is because investors in private companies tend to be white men. Whether intentional or not, this creates a bias against underrepresented entrepreneurs, including women and members of minority communities. As women we can correct this imbalance and change the conversation. Several of the women who contributed to this chapter are doing just that.

Invest in Companies That Excite You

Laura Oldanie, a self-proclaimed “reluctant blogger” in the Financially Independent, Retire Early (FIRE) movement, is on a mission to align all her money with her values, and she's using private investing to help her meet her goals. Laura is interested in resilient living and a regenerative future. Through WeFunder, a crowdfunding platform, Laura invested in four companies that resonate with her passions.

Her first investment was a loan to a real estate company that is developing commercial properties to address the needs of underserved communities. Then she made two equity investments. One investee is helping companies buy, sell, or broker recyclable materials. The other focuses on workforce management in the agriculture and food industries. Laura's fourth investment is in a natural food products business. Laura is excited by the regular updates she receives from her investments, which are keeping her engaged and aware of the progress each business is making toward achieving the outcomes she wants to see in the world.

Leverage Your Experience to Help Other Women Succeed

Many women have found that supporting female entrepreneurs can be a lot of fun, particularly when they invest together. Babbie Jacobs is part of Next Wave Impact, a group of women who co-invest in female-led businesses. Babbie realized that, in addition to her financial support, she can also help her investees through mentoring, making critical introductions, and serving as a sounding board. Babbie is delighted to be part of other women's dreams. For Babbie and the women with whom she co-invests there's nothing quite like the excitement and thrill of watching one of their entrepreneurs succeed.

Watch Your Money Grow

Although there are risks, women engaging in private investing can obtain positive market rate financial returns. Financial loss can be mitigated by starting small and risking only what you can afford to lose, learning alongside more seasoned investors, doing your research, and investing in businesses that you understand.

The women who contributed to this chapter have made private investing a hobby, a sideline business, or even their career, because they're excited about the potential impact of the companies they invest in, inspired by the entrepreneurs, and engaged in working together to help these small businesses grow and succeed.

What Are You Buying?

Private investing is a common way that investors support early-stage companies. Although not everyone agrees on the labels, capital requirements, and stages of a company's life cycle, Table 9.1 provides one view of the phases a company might experience if it's planning for growth and scale. As you can see, characteristics and requirements change at each stage. Where you participate as an investor depends on the amount of money you have to invest, your risk appetite, and other criteria.

TABLE 9.1 Company Life Cycle

Company Value Investors
Idea Stage Business concept in development < $500,000 $1 – $3million Bootstrap, crowdfunding, angel investors
Pre-Revenue Business build out, market entry $500,000 to $3 million $3 – $10million Crowdfunding, angels, early venture capital, debt
Revenue Growing traction and proof points $3 – 12million $10 – $30million Super angels, venture capital, debt funds
Growth Business growth, profitability $10+ million $30+million Venture capital, debt funds
Scale Business and market expansion $50+ million > $100million Late-stage venture, institutional investors

Most new businesses will not move through this entire life cycle. In fact, many will reach profitability much earlier than this table suggests. It's not uncommon for a small business to be successful with revenues that are well below $1 million. As long as the company's costs are less than its revenues, the company can make a profit and thrive. However, every new business needs money to get started and to grow to the point of profitability. The amount required depends on the business and the ambitions of the entrepreneur.

Investors have a role to play at every stage of a company's development, regardless of whether the company only needs money during earliest stages or whether they need capital across a longer trajectory. When their capital requirements are relatively small, entrepreneurs turn to family and friends, people in their community, or angel investors. As the need for capital grows, most founders approach venture capitalists, private debt funds, institutional investors, or other well-endowed capital sources.

As an individual investor—unless you have very deep pockets—most likely you'll be financing businesses that are in the idea or pre-revenue stages. Access to later-stage companies is usually only available to accredited investors and is often achieved through participating in a fund. However, this is starting to change, as the 2012 JOBS Act made it possible to use crowdfunding to raise up to $50 million.

Both debt and equity can support a company's growth. Decisions about the type of investment used at each stage have implications for entrepreneurs and investors. The important thing to understand is that an investment in a private company can be structured in an infinite number of ways. We are going to focus on conventional debt, the venture capital equity model, and revenue-based investing. Other options include venture debt, factoring, and recoverable grants.

Private Debt

When you invest in private debt, you're making a loan to a company. In a standard debt structure, a lender provides a borrower with a defined amount of money for a specific period of time. The borrower pays back the loan plus interest in predetermined amounts and intervals. Debt payments are usually made on a quarterly, semiannual, or annual basis. Each loan is governed by a contract between the lender and the borrower that specifies the interest rate, payment schedule, and maturity date (term) of the loan.

Depending on the conditions of the loan, payments can be interest only, or they can include repayment of a portion of the principal. When only interest is paid over the life of the loan, there is a balloon payment at the end of the term in which the principal is due. There are also debt agreements in which no payments are due, even though interest accrues. Known as a grace period, this stretch of time allows the borrower an interval to use the loan capital to build their business and generate revenue before regular loan payments are required. This is extremely helpful from the perspective of many new businesses or businesses that are caught in a difficult situation.

Another twist on debt is whether it is secured or unsecured. Debt that is secured is tied to a real or tangible asset that can be sold if the borrower defaults or their business fails. In these cases, there's an opportunity to recover some of the principal and interest due. Debt can also be unsecured, which means it isn't tied to anything tangible. Since there are no assets to recoup the investment, it's more difficult to be paid back when a borrower defaults on unsecured debt.

Returns from private debt vary widely, depending on the loan structure and level of risk. Aggregated data is difficult to find and usually proprietary. A reasonable range can be anything from 3% to 12%. To meet their impact goals, some investors are willing to accept lower below-market rates or even extend interest-free loans.

Private Equity

When you make an equity investment in a privately held company, you're buying an ownership interest in that company. This is the same thing you're doing when you buy stock in a company through the public equities market. The primary difference between private and public equity is that in the public markets it's relatively easy to find a buyer when you're ready to sell your stock. This is not the case with private equity. Buyers are often difficult, or impossible, to find. What's more, there are legal limitations as to when and how a private sale of equity can be carried out. As a result, money invested in private equity can be tied up for a long time, making it unavailable for other purposes.

The venture capital model is one of the most recognized forms of private equity investing. In this model, investors make money by investing at an early stage with the hope that the company will grow very fast and then be sold or go public by transitioning its private shares into public shares that are traded on the NYSE or NASDAQ. In the venture capital model, the first investors are usually individuals known as angels. Active angel investors often form angel groups to consider and evaluate potential investments. Venture capitalists come in at later stages. Any situation that returns the investor's money (usually a sale or initial public offering) is referred to as a liquidity event or exit. Moving from an early-stage investment to an exit usually takes 5 to 10 years, or more. Anything faster is considered a quick exit.

If the investment was successful, the investor should realize a considerable profit as an outcome of a liquidity event. On average, angel investors seek an annualized return of 12% to 20% or more. In the simplest case, the profit is based on the difference between the value of the company when the investment was made and the value on exit. However, there are a number of variables that can negatively affect the final payback. Since the success of venture capital style private equity investing depends on understanding these details and their implications, prudent angels learn alongside more seasoned investors.

To achieve their return expectations, successful angels invest in a number of companies, because they know many will fail before they reach an exit. In those cases, the investor will lose all, or most, of their money. A standard rule of thumb among angel investors is that 50% of their investments will fail, another two to three will return the original capital plus a bit more, and only a few will provide a significant positive return.2 In other words, investors expect one or two companies to provide the bulk of their return. For this reason, seasoned angel and venture investors diversify their money across 10 to 15, and oftentimes many more, companies to mitigate their risk.

Although venture capital is a common model for private equity investing, it isn't the only one. Just as there are many ways to structure a private debt investment, there are multiple options within private equity. These alternatives offer shorter periods of illiquidity, regular disbursements, and varying risk-return profiles.

Revenue-Based Investments

Venture capital supports less than 1% of new businesses in the US each year, while loans from financial institutions underwrite only another 17%.3 That leaves 82% of new companies unfunded. While the amount of companies that receive private debt is unknown, that type of investment is often not a good fit for companies that need capital to build their businesses. This leaves a funding gap that hits women and minority-led businesses hardest.4 They are often overlooked by conventional investors and have less capital to self-finance their businesses.

To solve this problem, values-aligned investors have begun using innovative financial structures to meet the needs of underfunded start-ups and small businesses. Revenue-based investing, which includes debt and equity options, is one example. It's gaining traction due to the flexibility and benefits this approach provides to entrepreneurs and investors.

Revenue-Based Debt

Revenue-based lending can achieve double-digit annualized returns, causing some investors to view it as an alternative to venture capital. As with most debt, investors receive payments during the term of the loan, which has an expected termination date.

This form of debt is attractive to entrepreneurs who do not want to give up ownership of their companies but do want to provide returns to investors that increase with the success of the business. Because payments are structured as a percentage of revenue, entrepreneurs have a repayment schedule that is not overly burdensome to their businesses. Many revenue-based debt structures have a grace period of 6 to 24 months, which provides even more value and flexibility to founders, particularly in the early stages of their companies' life cycle.

Here's how the most common type of revenue-based debt works: In exchange for capital, a company promises to pay investors a predetermined percentage of revenue on a regular basis, until the original capital and an agreed-upon return is paid.

For example, assume you invest $100,000 in a company that agrees to pay you 5% of gross revenues* each year until you've doubled your money. While structuring the investment, you and the entrepreneur would estimate projected revenue over a period of several years, as shown in Table 9.2. You would use these forecasts to establish repayment expectations. In our example, the company is expected to generate a total of $4 million in revenues over seven years.

TABLE 9.2 Revenue-Based Debt

Year Annual Revenues Annual Payments
1 $200,000 $10,000
2 $400,000 $20,000
3 $480,000 $24,000
4 $640,000 $32,000
5 $720,000 $36,000
6 $760,000 $38,000
7 $800,000 $40,000
Total $4,000,000 $200,000

As the investor, you'd be paid 5% of gross revenues each year. Assuming the company hits its revenue projections, at the end of seven years you'll have received $200,000. You invested $100,000 and received two times your money in return. This is considered a 2× return on your investment. That's great! But how can you compare that to the performance of your other investments? How can you translate the doubling of your money into an annual return?

To do that, you need to calculate something called the internal rate of return, or IRR. Getting to this number requires a somewhat complicated calculation. Fortunately, there are online calculators that can do this for you. In our example the IRR is 17%, a very attractive rate and one that is consistent with many venture capital expectations.

Since things do not always go according to plan, you cannot count on a 17% IRR. Your actual return depends on how long it takes your loan to be repaid. Let's say, your investee did really well and was able to repay you $200,000 in four years instead of seven. In that case, your IRR would be 27%. On the other hand, if the company didn't do as well as expected and took 10 years to pay you back, your IRR would be about 11%.

Details of a revenue-based debt agreement are negotiable. Repayment rates of 3% to 9% of gross revenues are typical, as is an ROI of 2× to 4× for investments in earlier stages and 1.5× to 2× for growth-stage companies. Although the example used annual repayments for simplicity, actual repayments can be set monthly, quarterly, or according to other mutually agreed intervals. Grace periods of 6 to 24 months are not uncommon. The investor and company could agree to suspend payments at the start of the funding term, or at some point during the funding term, to allow for reduced revenues or other business challenges.

Revenue-Based Equity

The structure of revenue-based equity is similar to that of revenue-based debt. In fact, Table 9.2 could also be applied to a revenue-based equity investment. In both cases, the investor and the entrepreneur project revenues over a period of years. As long as the company continues to earn revenues, the entrepreneur pays the investor a percentage at regular intervals until an agreed-upon return is achieved.

The primary difference between the two is that with revenue-based debt, the investor is providing a loan to the entrepreneur. As the entrepreneur makes payments, she's paying off the loan. In revenue-based equity, the investor purchases shares in the company. When the business owner makes payments, she's repurchasing equity from the investor. If all goes according to plan, the shares are eventually repurchased in full, investors achieve their expected return, and ownership of the company reverts to the founders.

An advantage of revenue-based equity over revenue-based debt is ownership. If the company is acquired before all the shares are repurchased, the investor can be repaid either at the value that was originally agreed to or at the value placed on the shares by the sale, whichever is higher. This enables revenue-based investors to participate in additional unexpected, but hoped for, financial gain—often referred to as the “upside” of the deal. A revenue-based debt holder, in contrast, would only receive any sums due under the original terms.

Summing Up Private Debt and Private Equity

Although standard debt and venture capital equity models are the most common private investment models you're likely to encounter as an investor, a number of alternatives are emerging that benefit both investors and entrepreneurs (see Table 9.3). Companies such as Zebras Unite, Founders First, and Village Capital are helping drive this change. Fortunately, they're not alone.

In her book Raise Capital on Your Own Terms, Jenny Kassan describes a range of different private investment structures. Although written for entrepreneurs, her examples shed light on how investors can benefit from these alternatives.

TABLE 9.3 Private Investment Model Comparisons

Benefits Challenges
Standard debt model
  • Lower risk than equity
  • Can be secured
  • Clear termination date
  • Often repaid before other liabilities
  • Lower expected returns
  • Assets at risk from default or business failure
Venture equity model
  • Potential for double-digit returns
  • Entire subculture exists to support new investors
  • Easy to co-invest with others
  • Only a fraction of companies are suitable for this type of capital
  • Success often requires multiple rounds of investment and a liquidity event
Revenue-based debt and equity models
  • Can meet the needs of a wide range of currently underserved businesses
  • Offers a breadth of risk-return options to investors and founders
  • Relatively new investment approaches
  • Harder to find opportunities, with fewer funds focused on alternatives available

Getting Started as a Private Investor

You don't have to know every detail about how to structure a deal when you're getting started as a private investor. In fact, most of us don't know much when we begin. Fortunately, there are lots of ways you can learn. At some point, though, you'll just have to dive in and experiment. When you do, it's highly recommended that you collaborate with others and start with small amounts of money that you're comfortable losing.

Crowdfunding platforms are the easiest and least expensive way to get started. Many are available to non-accredited investors. You can choose companies, make your investments, and watch their progress—all through the platform.

Angel groups are a wonderful entry point for accredited investors who want more interaction with entrepreneurs and other investors. These groups make it much easier to find high-quality investment opportunities, which are also known as deals. Since there has been a strong bias against female CEOs in the venture world, women are stepping up to invest in other women through female-focused angel groups.

Private debt and private equity funds can require deeper pockets than crowdfunding or angel investing. For the most part, they're only available to accredited investors, and in some cases, only to qualified investors. A broad range of positive impact and socially responsible private investment funds are available, including a growing number that use revenue-based investing. Table 9.4 compares and contrasts the pros and cons, investment levels, and investor criteria required for crowdfunding, angel groups, and private investment funds.

TABLE 9.4 Private Investment Approaches

Crowdfunding Female-Focused Angel Groups Investment Funds
Description Online platform, usually early stage Deal-by-deal, usually early stage Professionally managed, multiple stages
Benefits Low entry point Opportunities for collaboration Immediate diversification
Investment level $100 can get you started $10,000+ $25,000–$100,000+
Challenges Limited engagement, variable reporting Engagement options, more time required Limited engagement, less directed impact
Investor types Non-accredited and accredited Primarily accredited Primarily accredited
Examples Investibule
Golden Seeds
Next Wave Impact
Pipeline Angels
Elevar Equity

Regardless of your approach, it's wise to invest only in companies that have strong business models, financials, and teams. Ensuring that the fundamentals of the business are in place will help mitigate your risk and maximize your potential return. Also, it's a good practice to diversify your private investment portfolio. Whether you're a non-accredited or accredited investor, you should spread your money across a number of individual investments or funds to reduce risk.


While still small relative to other investment approaches, crowdfunding is projected to grow at a rapid rate. By May 2020, more than 525,000 Americans had invested close to $400 million in start-ups and small businesses through these platforms. More than 80% were non-accredited investors, and the average investment size on a per-deal basis was just over $700.5

The number of crowdfunding platforms is also growing, but they're not all created equal. Years in business, motivations, and depth of offerings vary, as do the level of vetting that platforms perform on businesses they promote. Since there are a number of options, it's prudent to perform diligence on the platforms and not just on the companies they promote. Some crowdfunding platforms are structured as benefit corporations, B-Corps, or have socially driven missions.

  • Crowdfund Mainstreet started in 2018 as a benefit corporation. The site services mission-driven entrepreneurs—particularly women and underserved populations.
  • Republic, which launched in 2016, encourages start-up teams with a diverse mix of race, gender, and geography. You can invest in a Republic company for as little as $10.
  • WeFunder was founded in 2011 as a benefit corporation. The company is committed to helping keep the American dream of enterprise alive. The firm donates 5% of its annual profits to provide grants, training, and mentorship to start-up founders.

There are a number of articles, “best of” lists, and other online resources that will help you navigate crowdfunding. Investibule, for example, has a wealth of information on its website. As with all investments, there is risk with any of these strategies. Please do your homework, test the waters before jumping in, and be sure you mitigate your risk by not investing more than you can afford to lose.

Female-Focused Angel Groups

As women become angel investors, we are backing different kinds of entrepreneurs and different kinds of companies than men. Women are funding women! And we are funding businesses that make a difference in our lives. More of us are becoming angels, and that influx appears to be correlated to a nearly 60% rise in the number of female founders who received angel funding between 2011 and 2016.6

We're investing through traditional angel models, new learn-by-doing approaches, and by joining—or starting—syndicates. Some groups encourage women to participate by ensuring there are low barriers to entry, opportunities for portfolio diversification, and structured mechanisms to learn. As an investor through one of these options, you can be as involved or hands-off as you choose.

Traditional Angel Group Model

The most typical model for an angel group is a club. Members pay dues that can range from a couple of hundred to several thousand dollars. They meet regularly to listen to entrepreneurs who are seeking capital explain—or pitch—their businesses. If members are interested in a particular company, they can band together to research the company, a process known as due diligence. Members then decide whether they want to invest in the company or not. Individual check sizes are often in the $10,000 to $25,000 range. Depending on the group and the wealth of the members, investments can be even higher.

Some groups that are focused on women have memberships that are exclusively female while others include men. Virtually all of them support female entrepreneurs and a growing number are also targeting minority founders. When you join one of these angel groups, you can learn from other members, many of whom will be more experienced than you. You get to choose where your money goes by investing in only those deals that really excite you. And because you invest alongside other women, your money goes even further.

Astia Angels, Broadway Angels, Golden Seeds, and Plum Alley are among the best-known female-focused angel groups. You can find additional networks through a simple online search for “angel groups for women.” The Angel Capital Association also maintains a list of angel groups across the country.

Learn-by-Doing Models

The learn-by-doing model is a relatively new entrant in the angel investment landscape. Pioneered by women like Natalia Oberti Noguera of Pipeline Angels and Alicia Robb of Next Wave Impact, learn-by-doing angel groups function less like clubs and more like funds, although to varying degrees.

PIPELINE ANGELS   Pipeline Angels trains women to become angel investors and focuses on early-stage, social-impact companies founded by women. In this model, a small group comes together as a cohort that learns together. Members of the cohort pay $4,500 for a multi-month training and mentorship program. At the end of the training, the members contribute an additional $5,000 each and co-invest in a start-up they identified and researched during their training. Cohort members can become very close during this process. One group even went on to form a company and write a book to awaken other women to the opportunity of angel investing.

37 ANGELS   Like Pipeline Angels, 37 Angels offers participants a training bootcamp and the opportunity to invest in one company at the end of the process.

THE RISING TIDE PILOT   The Rising Tide pilot used an innovative learn-by-doing model that was so successful, it spawned a number of similar funds over the next few years. In the pilot, 99 women joined together in an investment fund. Each invested $10,000, resulting in a $1 million fund. Ten experienced female angels participated as “lead investors.” They did all the hard work: sourcing investment opportunities, leading due diligence, and making investment decisions. The remaining 89 women were limited partners (LPs).

Over the course of a year, the fund invested in 10 companies—most of which were women-led. The lead investors held training sessions and mentored the LPs, who could be involved in as much of the deal flow and diligence process as they wanted. If an LP didn't have the time or interest, that was fine, too. She would still benefit from the financial return on the investment, and she would still be supporting female entrepreneurs. At the end of the year, each investor had a diversified portfolio of private equity investments, many learned to be better angel investors, and some went on to become lead investors in subsequent funds.

NEXT WAVE IMPACT   Alicia Robb, one of the leaders behind The Rising Tide pilot, realized she wanted to do more than support female founders. She also wanted to invest in companies that were having a positive social impact. The fund she spun out of The Rising Tide was called the Next Wave Impact Fund. It followed a similar model. It consisted of 99 female investors (25 of them women of color), nine lead investors, and educational activities. They focused on investing in companies with female founders that were solving real societal problems.

Alicia also shifted the original model to a multi-year investment period with a minimum of $30,000 and a maximum of $300,000. One-third of the total commitment was requested annually over a three-year period. Thus, a woman making a $30,000 commitment to the fund invested $10,000 per year for three years. Next Wave Impact raised $4.5 million this way. Over the next 2.5 years, the fund invested in 16 pre-revenue start-ups. About half of the capital was set aside to reinvest in the portfolio companies that showed the greatest chance of success. These reinvestments are common in private equity and used to maximize an angel investor's return potential.

PORTFOLIA    Portfolia is another series of funds that emerged from The Rising Tide. Trish Costello, Portfolia's founder, was involved in the pilot. With Portfolia, Trish decided to adhere more closely to the original model. Minimum investment amounts for each fund are still $10,000, although you can invest more now. Each fund makes all its investments in a one-year period and provides mentoring and support to the LPs during that time.

At the time of this writing, Portfolia had launched eight funds that focus on women's values and concerns. Fund themes include female-focused consumer products, women's health, active aging, and diversity. So far, Portfolia funds have invested in approximately 40 companies, most of which are female-led. Portfolia plans to continue to open new funds.


Women can invest in private equity through syndicates, which are legal entities that aggregate, or “pool,” funds from a group of investors. An advantage of some syndicates is that you can invest as little as $1,000 in a single deal. This creates a lower point of entry than investing alone, allowing an investor into 10 deals for the same amount she would pay to participate in one deal through most angel groups. Whoever manages the relationships, finances, and tax documents for the syndicate takes a fee for performing these services. This is the downside of syndicates, as higher fees can eat into returns.

AngelList, a platform for accredited investors, is one way to find syndication opportunities. 500 Women's Syndicate and Next Wave Impact offer syndicated deals through this platform. Profits from a syndication deal on AngelList are currently split between AngelList (5%), the syndicate manager (15%), and the investors who split the remaining 80% in proportion to their investment in the deal. Profits are calculated after the original investment amount has been returned to investors.

If you want to join a syndicate, you can research the many syndicates available on AngelList, or you can ask a local angel group if they provide syndication opportunities. If you have a group of friends or colleagues interested in investing together, you can even set up a syndicate on your own. There are legal expenses, along with reporting and other regulatory and compliance issues, though. However, these requirements don't have to be onerous. Nonetheless, we suggest you get input and support from experts.

Private Investment Funds

Accredited investors can also invest through private debt and private equity funds. In these structures, investment professionals identify the companies that will receive capital. They perform due diligence and manage the assets on behalf of the investors in the fund. Although specifics vary, in general, debt funds make regular interest payments to investors. Principal is often available after a tie-up period of a few months to several years. Conversely, money invested in equity funds remains illiquid until the fund exits all its investments, which can be 10 years or more.

Minimum investment amounts are often required to access private funds, which can put them out of reach for many investors. Minimums tend to get larger as the size of the fund increases. For example, a private equity fund that is raising $10 million could have minimums in the range of $10,000 to $25,0000. Funds raising $25 million to $50 million might have minimums of $100,000 to $250,000, while funds raising over $200 million could require minimums of $1 million or more. Debt funds often have lower minimums, but these can still be in the range of $25,000 or more.

For those who can opt into these investments, private funds offer the advantage of diversification with minimal effort. As with syndicates, investors pay fees for this benefit. Fund managers are generally paid an annual management fee that is a percentage of the total assets under management and an incentive fee the management team earns when the fund is successful. A 2% annual management fee and a 20% incentive fee are quite common.

While you have discretion over the type of fund you invest in, you don't decide which companies are included. That's the job of the manager. Fortunately, there are many private debt and private equity funds that seek market rate financial return and positive social impact.

Finding Private Investment Funds

Some funds are evergreen, which means they will continually accept capital. The majority, however, go through a capital raise. Once the fund managers have raised the money they plan to invest, the fund is closed to new investors. However, there is always a pipeline of new opportunities.

A good place to start looking for private fund opportunities is with your financial advisor. While not all investment advisors source and perform due diligence on private debt and private equity funds, some do. You can also perform your own research through lists that are available online. Some are curated, which can make your job easier, while others aren't.

ImpactAssets offers the ImpactAssets50. This is an annually updated list of 50 private debt and private equity managers that offer funds with impact themes. Each year, ImpactAssets selects 50 top funds from a wide range of geographies, sectors, and asset classes. Access to this list is free.

Impact Investor Landscape is a search tool for investors who want to back impact companies. It's possible to search for details on almost 80 values-aligned angel groups and impact funds. You can search by sector, geography, life-cycle stage, investment size, and other criteria. The site explains how each fund works as well as the kinds of companies they back.

Once you find a fund that interests you, you can speak to your financial advisor or reach out directly to the staff of the fund. Some funds have investor relations managers on their teams who can field your questions. This way you can learn more about their strategies and get a firsthand sense of their focus, impact goals, and expected financial returns.

Take Action

Entire books have been written on the concepts in this chapter, and we realize we did not fully do them justice. Our intention was to spark your interest in an investment class so you'd be driven to learn more.

To help you on your way, please check out the information and resources we've placed for you on our companion website. We've vetted the content to simplify your process and to point you to some of the most helpful information, regardless of the amount of money you want to invest. So start where you feel comfortable and return to the site whenever you're ready to learn more.


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  3. 3   Hwang, V., Desai, S., and Baird, R. (2019). “Access to Capital for Entrepreneurs: Removing Barriers,” Ewing Marion Kauffman Foundation: Kansas City.
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  5. 5   Crowdfund Capital Advisors. Industry Review: Regulation Crowdfunding Finishes Its Fourth Fiscal Year with Some Impressive Results. 2020.
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  1. *   As of May 2017, those with annual income or net worth below $107,000 are limited to investing no more than $2,200, or up to 5% of the lesser of their net worth or annual income. Those making at least $107,000 can invest up to 10% or the lesser of either their net worth or annual income.
  2. *   The Small Business Administration (SBA) defines a small business by number of employees and/or annual revenue. These figures change depending on the type of business.
  3.    Hwang, V., Desai, S., and Baird, R. (2019). “Access to Capital for Entrepreneurs: Removing Barriers,” Ewing Marion Kauffman Foundation: Kansas City.
  4. *   Revenues can be calculated as gross revenues, which are total revenues before any deductions, or net revenues, which are total revenues less expenses. Many investors prefer to use gross revenues, because there can be disagreements about what expenses should be included in the net revenue calculation.
  5.    Return on investment, or ROI, is calculated by dividing the total return by your original investment, then multiplying by 100%. In this case, the ROI is 200%, which is more commonly referred to as a 2× return.
  6.    The IRR in this example was calculated using an online IRR calculator.
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