Welcome to our #220 weekly newsletter.
“For women taking control of their financial future”
-Jana Hlistova
From The Purse
In this week’s newsletter, we focus on new legislation (UK) being introduced on 31 January which will negatively impact female investors in the startup ecosystem.
But there is an option for women to qualify as a ‘sophisticated investor’ if they do not meet the financial threshold as a high net worth investor. Read on!
And don’t forget to listen to The Purse Podcast interview with Vicky Pryce and Victoria Ross about closing the gender wealth gap. We decided to repost this interview from early 2023 as it is an important one.
Here’s to women continuing to build their personal wealth. Please enjoy!
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And you can review the news in brief so you stay on top of global financial, economic and investing trends.
I hope you enjoy this week’s newsletter.
Until next week,
Jana
New legislation (UK) negatively impacts female investors. But women can qualify as 'sophisticated investors' instead
From 31 January, the annual income and net assets thresholds for high net worth individuals will increase making it more difficult for women investors (UK).
On January 31, new legislation will be introduced which will negatively impact female investors.
As reported by The Times, the annual income and net assets threshold used to define what it means to be a high net-worth individual, will increase. The changes are as follows:
the annual income will increase from £100,000 to £170,000
and the net assets threshold, will also increase from £250,000 to £430,000 (excluding primary residences and pensions).
According to the Treasury, this is the first time in more than 20 years the threshold has been increased. And (this) is in line with inflation to:
“…ensure exemptions from the financial promotions regime apply only to those who are ‘high-net-worth’ or ‘sophisticated…’
In a Linkedin post, UK entrepreneur Emma Sinclair MBE shared the research carried out by Marla Shapiro from HERmesa Angel Syndicate and Roxane Sanguinetti from Alma Angels, which concluded that the changes to the Financial Promotion Exemptions will result in making early-stage investing in the UK more white, more male and more London-centric.
In the UK, only 14-17% are female angel investors, compared to 33% in the US.
Accredited high net worth individuals in the US need to earn $200,000 in annual income in the last two recent years (or $300,000 with a partner), which equates to approximately £157,000.
Or their individual net worth, or joint net worth with that person's spouse or partner, needs to exceed $1,000,000 (excluding the person's primary residence), which equates to approximately £787,000.
And as we know, it is not easy for women to raise capital for their startups…
…only 2% of VC funding goes to female founders. For this reason, women are more likely to rely on angel investors for funding.
Therefore raising the annual income and net assets threshold may not only deter women investors in the UK, but it will reduce the number of existing women investors who are allowed to invest.
The change comes into force nearly two years after…
… the Treasury ran a consultation into proposed changes to the Financial Promotion Order exemptions for high net worth individuals and so-called ‘sophisticated’ investors.
Whilst the UK Business Angels Association was consulted, it remains to be seen who else was involved in this ‘consultation’ process and to what extent female investors and their views were taken into account.
Women can qualify as ‘sophisticated investors’ instead
If a female investor does not meet this financial threshold, she can still qualify as a ‘sophisticated investor’, assuming she has been a member of a network of business angels for more than 6 months.
We interviewed Gillian Fleming, Co-founder and CEO of Mint Ventures to discuss this (back in July 2022).
By joining, female investors can take a 6 month (online) angel investing course, which will qualify them as a ‘sophisticated investor’.
This in turn will allow women to invest in the startup ecosystem.
So good advice for female investors: seek out angel networks or female angel networks which offer a 6 month angel investing training course.
News in Brief
Financial news
Davos: Argentina’s Javier Milei says west ‘in danger’ in fiery Davos speech. Libertarian leader accuses international organisations of embracing ‘collectivism’.
China’s economy spooks markets, and stocks sink. The CSI 300 has underperformed the S&P 500 by >40ppts over the year.
Wall Street returned to record heights to cap a punishing 2 year round trip dogged by high inflation and worries about a recession that seemed inevitable but hasn’t arrived.
The S&P 500 rallied 1.2% to 4,839.81. It erased the last of its losses since setting its prior record of 4,796.56 at the start of 2022.
The value of global bonds has dropped by almost $500bn this week as US 10-year yields have jumped 4%+ again.
The Red Sea's inflation threat: The disruptions in the Red Sea have roiled global supply chains and pushed up freight costs.
Use of Fed funding tool jumps most since April to fresh record: Banks borrowed record sum of $161.5bn from Fed's Bank Term Funding Program.
UK inflation unexpectedly rises as cost of tobacco and alcohol increases. Surprise uptick to 4.0% complicates forecasts of interest rate cut, while FTSE slumps 1.5%.
UK housing market sees ‘respite’ as mortgage rates ease. Royal Institution of Chartered Surveyors says falling inquiries from new buyers approaching a ‘flatter trend’
Oxfam warns of first trillionaire. The 5 richest men saw their fortunes rise by 114% between Mar 2020 and Nov 2023, Oxfam found. This elite group's net worth rose to $869bn from $405bn between 2020 and 2023, the organisation said - translating to $14m an hour.
Crypto: bitcoin, ethereum, DeFi & NFTs
Little over a week since the launch of spot Bitcoin exchange-traded funds (ETF), and the crypto markets are suffering.
Bitcoin has shed more then 10% since the ETF launch and continues to hover around $41,000 as Grayscale's fund dominates spot ETF volumes. (Last week, it closed at $49,000).
Bitcoin ETFs now hold nearly $4bn in assets, with Fidelity and BlackRock’s ETFs neck-and-neck for the top slot, according to preliminary data shared by Bloomberg analyst Eric Balchunas.
Meanwhile, Ethereum (ETH), has lost 8% of its value in the past week. It's now priced at $2,466.
Solana (SOL) has shed over 7% of its value in the past week and is priced at $92.38.
While Avalanche (AVAX) is down by more than 14%, trading hands for $32.82.
Wall Street's top regulator on Thursday pushed back its deadline for a decision on Fidelity's proposed spot Ethereum ETF to March 5, leading to a price dip in the asset.
Trump dips into bitcoin Ordinals as his NFT ambitions fizzle. The 2024 presidential hopeful’s latest project involves 200 NFTs inscribed on the Bitcoin blockchain.
The Purse Podcast
We cover the following in our conversation:
What is the gender wealth gap?
Why is closing the gender wealth gap important?
How do we close the gender wealth gap?
How can women manage their money to protect and grow their long term financial wealth?
How can women engage more in long-term investing?
What can the government and employers do to close the gender wealth gap?
What books, blogs or podcasts can inspire or educate women on how to invest?
Please enjoy! Listen on Apple Podcasts and Spotify+
Coffee Break? Read This
We’d love to hear from you. Get in touch with Jana via the The Purse website or tweet @jointhepurse and janicka.
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New legislation (UK) negatively impacts female investors. But women can qualify as 'sophisticated investors' instead