The Angel Capital Association 2021 Summit—is there any hope?

The Angel Capital Association 2021 Summit—is there any hope?

 

Have you ever attended a conference and felt so at home—like the attendees are really your people?  When I go to the Angel Capital Association conference, I feel exactly the opposite!  Most of the people I meet there don’t understand why anyone would be concerned about the impact of their investments beyond the impact of making the angel investors rich.  Most of the talk is bragging about that 47x exit that they got (i.e. they got a return of 47 times their original investment).  

I went ahead and applied to speak at the conference about “alternative” investment models because it is my mission to spread the word about non-extractive, sustainable ways to invest.  I was shocked when my proposal was accepted!  I decided not only to attend the panel I was on, but to attend the whole conference and try to keep an open mind.  Maybe the world of angel investing was starting to evolve?

When I looked at the agenda, I noticed that almost 20% of the sessions had the word “exit” in the title.  This, and the content of most of the sessions, confirmed that most active angel investors continue to rely on “exits” (via acquisition or IPO) to get paid.

The session I was invited to speak at was called “The Art of the Deal: Alternative Deal Structures.”  I decided to be honest about my opinion of the sacred cows of angel investing. 

Here are some excerpts of what I said:

“When we talk to angel investors about ‘alternative structures,’ there is an assumption that alternative structures are debt and that equity has to be structured using the typical angel/VC style term sheet. . .There are many ways to structure equity.”

“I wonder about the wisdom of relying on a big exit as the only way to get paid.”

“The model where you push for an exit is not appropriate for 99.9% of businesses in our country.  And that doesn’t mean those businesses are “lifestyle businesses” or not investable.  They could go huge.  Only 6% of fortune 500 are venture backed.”

“Women are less likely to found companies that are on the high growth path.  If you want to diversify your portfolio, focusing on that one structure may not be consistent with that.”

As you can imagine, my comments did not go over well.  Here is what some of the attendees said:  

“We need to keep deal structures pretty standard, especially if future institutional funding is expected.  Using the standard terms on the National Venture Capital Association’s website has been very helpful.”

“I believe the great majority of angel investors want to help grow companies to a successful exit.”

“Most angel investors want to invest in companies that will have an exit.”

“In MOST cases exit is the right path.”

“A lot of complex “creative” deal structures don’t really help . . . the reason the VC route happens over and over is because so many lawyers have a basic understanding.”

“I would argue that if the entrepreneur doesn’t want to drive to an exit, we shouldn’t have invested in the business in the first place.”

 

We did get a few supportive comments acknowledging that there is, in fact, a category of business that can be successful and grow big without having an exit.  Unfortunately, this seemed to be very much a minority view among the attendees of the conference.  My hope is that I might have planted some seeds that will bear fruit some day as more investors become increasingly open minded about investment structures that support a livable, prosperous, and sustainable world for all.

5-Day Challenge:  Create a Golden Opportunity for Investors

5-Day Challenge: Create a Golden Opportunity for Investors

We just wrapped up a LIVE 5-day challenge—Create a Golden Opportunity for Investors: How to Design a Win-Win Investment Offering.

It was awesome! Hundreds of people joined the challenge where we taught how to design a customized investment offering.  Here’s what they learned:

Day 1—We talked about why it’s so important to design your own offering and how to lay the groundwork to ensure you design the right offering for you.

Day 2—We went over the three basic types of investment offering and how to choose which one you want to offer.

Day 3—We explored how your investors can get paid—spoiler alert: you don’t have to grow fast and hustle for a fast exit!

Day 4—We reviewed the pros and cons of giving investors any control and what that can look like. We also talked about tools to motivate faster and larger investments.

Day 5—We pulled it all together and talked about how designing your offering fits into the larger strategy for raising the right money from the right investors—in a way that lets you stay true to your mission and goals.

It’s not too late to check out the training! The videos and worksheets are still available for FREE for a limited time. Get immediate access to the challenge—start today by signing up here.

Fundraising Tips from Dan Fireside, Capital Coordinator at Equal Exchange

Fundraising Tips from Dan Fireside, Capital Coordinator at Equal Exchange

Equal Exchange is a worker-cooperative that sells Fair Trade coffee, chocolate, and other staples.  They created a revolutionary way of raising money from investors.  Investors receive non-voting preferred stock, and if the co-op is ever sold, any excess revenues would go to another Fair Trade organization.  Investors make money via annual dividends, and Equal Exchange actually has to turn investors away.  They currently have about 550 investors and have sold over $17M in preferred stock.  

Dan’s job is to raise capital and manage investor relations.  Dan says that now is a great time to raise capital because, based on his experience, when Wall Street crashes, investors become more aware of the importance of investing in alignment with their values.

Dan has learned from experience that the most important way to cultivate investment is by building relationships with values-aligned people.  When talking to potential investors, remind them that all investment is risky, but at the end of the day, whether you make money on your investment or lose it all, it’s nice to feel good about what your money is doing in the world.  

When Wall Street crashes, investors become more aware of the importance of investing in alignment with their values.

Once you have investors, you have to communicate with them and not just send them a check each year.  Help them see why they should be excited about their investment.  Tell stories about your impact—be as specific as possible.  Click here for an example of what Equal Exchange sends to their investors.

Keep building relationships with your investors.  If you’re ever in trouble, they will be the first ones to support you.

If you’d like to learn more about raising capital using the same principles as Equal Exchange, click here for information on our upcoming online book study of Raise Capital on Your Own Terms: How to Fund Your Business without Selling Your Soul.

Angels of Main Street is one year old and growing fast!

Angels of Main Street is one year old and growing fast!

A little over a year ago, Crowdfund Mainstreet CEO Michelle Thimesch and I had a crazy idea—create an angel group for EVERYBODY!

The traditional definition of an angel investor is a wealthy person who invests their own money in startups. There are groups all over the country where angels gather to support each other with finding and making investments. To join these groups a person must meet the definition under federal law of an accredited investor (minimum of $200,000 in annual income or $1 million in net worth, excluding their primary residence).

Angels of Main Street was formed so that EVERYONE could be part of an angel group—there is no minimum wealth or income requirement. AMS currently has almost 70 members who collectively invested over $500,000 in small businesses in 2019. Investment amounts ranged from $500 to $25,000.

It’s easy to join Angels of Main Street. Just pay the one-time membership fee, commit to investing at least $500 per year in businesses you care about, and join us for our calls, events, and learning opportunities.

For details, visit https://www.angelsofmainstreet.com, or feel free to email info@jennykassan.com if you have any questions.

Major changes for maximum impact

Major changes for maximum impact

Dear Community,

This is my last blog post for 2019, and I want to thank you for all your support this year. As we work to change the face of investment in our country, your outpouring of love for our amazing entrepreneur clients, and of course your investments in them, mean everything to us!

2019 was a year of major change for Jenny Kassan Consulting. For the first time we didn’t do our signature training event, Fund and Fuel Your Dreams, because it felt like we were being called to serve in a different way.

It was time to acknowledge that raising significant investment dollars, for many entrepreneurs, is an undertaking that requires an extremely high level of support—coaching, legal services, support with communications, and help with connecting to the right investors. While a three-day training is a great start, it barely scratches the surface of what is needed to meaningfully support an entrepreneur with fundraising. Plus, now that my book is published, everything we taught at the event is easily accessible without the need to attend a three-day live event.

So, in 2019 we focused our efforts on one-on-one client services, allowing us to address each individual client’s unique goals and challenges and to bring the right resources to the table.

We also put more energy than ever into cultivating the investor side of the equation. With such amazing entrepreneur clients, the obvious next step was to leverage the relationships we already have with “outside-the-box” investors and to encourage connections between investors and our clients. We do this through our WeCapital Community—where we connect our current and former female clients with investors—and also through Angels of Main Street—a community of angel investors that is open to people anywhere in the US regardless of wealth or income.

In its first year, the Angels of Main Street have already moved several hundred thousand dollars into direct investments in mission-driven companies.

In 2020, we will continue 1) to focus on providing highly customized services for entrepreneurs who want to raise investment capital on their own terms and 2) to grow the movement of investors wanting to learn how to move their money into ventures they love.

We hope you’ll stay involved—here’s what you can do:

· Follow us on social media

· Join Angels of Main Street

· Invest on Crowdfund Mainstreet

· Buy and gift my book here

· Refer entrepreneurs to us here

· Continue to read our newsletter and encourage friends to join our mailing list by going to our website

Thank you again for your support and encouragement!

~ Jenny

Go Ahead, Get Invested! The power of community investing

Go Ahead, Get Invested! The power of community investing

Local businesses are the touchstone of our communities. And in the last decade, social entrepreneurship and community investing have moved from fringe experiments to mainstream ideas. Together, there’s more opportunity than ever for community members to support, participate, and potentially share the benefit of the success of main street businesses. 

In case you missed it, you can watch the video replay from an event we recently attended in Los Angeles called Go Ahead, Get Invested!—an engaging evening of conversation and ideas for action around the power of community investing.  Click here to watch the video replay.