July 4, 2020

Who are Pipeline angels and how to prepare your company for post-covid fundraising, by Kristina Francis.

Who are Pipeline angels and how to prepare your company for post-covid fundraising, by Kristina Francis.

In this episode of Fundraising Radio, Kristina Francis Principal at The Marathon Fund and a member of Pipeline angels explains how this angel group works and who should try working with it.

Kristina Francis' podcast: Get Found Get Funded https://getfoundgetfunded.com/

In this episode of Fundraising Radio, Kristina Francis Principal at The Marathon Fund and a member of Pipeline angels explains how this angel group works and who should try working with it.

Kristina Francis' podcast: Get Found Get Funded https://getfoundgetfunded.com/

 


Transcript

This is fundraising radio entity, the guest speaker of Christina France's principal at the marathon fund, and also a member of pipeline angels. And then this app is a, will mostly focused on the current situation in the covet. 

And we'll also talk about post covets situation. So, how you should prepare for fundraising once the current virus is over. So, Christina, Alaska caused by you giving us some background on yourself and on the marathon fund. Absolutely. 

Conferencing, thank you for having me on the show today. So I'm Christina. Francis, I'm based in Northern Virginia right outside of D. C. my background is a bit interesting is I've, I've had a different journey. I think the most into venture capital and angel investing. 

I spent twenty years as a management consultant, focused on software development, engineering, and cyber, particularly building enterprise applications for our department of defense about four years ago. 

I decided that I wanted to try something a little different embed on myself. So I started my own consulting company and in parallel, I actually became an angel investor with pipeline angels, which was a transformative experience for me. 

If you don't know pipeline angels is truly trying to change the face of angel investors and creating capital for women and non environment, binary, social entrepreneurs. 

We typically serve as the friends and family around for entrepreneurs who don't already have that support at that critical stage as, you know, that's one of the hardest stages to actually get funding. And so I joined pipeline angels. We had a cohort of women that I still talk to today. 

In fact, a few of them really Florez and I, who are pipeline angels and another individuals. Island started a podcast called, get down and get funded. 

That is supportive of all entrepreneurs, but we feature those on the show that are eligible for angel and VC funding. We know that that's a small amount of entrepreneurs. 

But our goal with that podcast is to actually help change the startup space, make it more inclusive into help paint the picture of VC and angel investing for those entrepreneurs. Sounds good. 

I'll definitely leave a link to that podcast by the way, and description of the episode. So someone's curious check it out for sure. So, let's first talk about pipeline angels. 

I have interviewed several people from Golden seeds and it feels like their mission is pretty similar to yours. So they're really focused on funding female founders as well. How how are you special? Can you, can you tell me something about that? 

You know, one of the things, I think about pipeline in fact many pipeline angels, go on to become angels at Golden seed. So I see pipeline as one of kind of the beginning part of the angel experience. 

Many of us are new to angel investing.
I think who is the founder of pipeline? Angels did a great job in that she creates cohorts of investors. 

So I was, for example, in the DC cohort, we had four people in my cohort, their cohorts in New York and Boston, Miami, Austin, Texas, Portland, Chicago, all across the United States. 

And so, what happens is you go through an angel investment boot camp, you learn about angel investing and then together either cohort actually does a pitch competition you select down select. 
In our case, we down selected three companies from a group of twelve, amazing women 
entrepreneurs and then we do the due diligence on those companies. So you get hands on experience actually going through due diligence. 

And then, as a group decide who with whom you will invest, oftentimes pipeline angels, take on board seats of these companies and then we create a partnership. You know, why we invest in the company. 

We also provide advisory support. One of the first companies I invested in about four years ago I still in contact with the with the entrepreneur, and I provide advice. She'll call me for advice. 

And so it's more of a that true friends and family round. And then again, you know, outside of the investment is creating a network of like, minded women who want to see other women succeed. So, I think that's why we are a bit different. 

We're creating that network effect. And that network effect going beyond the investment. 

Got it now, I'm actually interested in this cohort and this kind of school for angel investors. What exactly do learn there. So, where are they teaching you there? 

So what's unique about the training? I think that Natalia puts together. She also has an angle of bias right? And so we see a lot of bias right now in investing, you know, there are tons of reports. 

Deron Datsun and Illumina capital did a great report. I think about a year and a half ago on bias and investing itself and so, one of the things that Natalia doesn't that is critical to being a pipeline. 

Angel is to really try and understand yourself as an investor and take your bias out of investing. 

Oftentimes, you know, investing right now, particularly it's white male dominated and therefore we don't see a lot of women people of color getting at, as, you know, as many investments as they should. 

And so what pipeline does is is really intentional about investing in women and women of color, and particularly non binary investors as well. 

Got it so how exactly do search for deals so pipeline angels do you mostly get inbound to get references from other angel groups? Or where do most of your deals actually come from? 

It's a combination we get tons of inbound, you know, again, with the training and boot camps. It happens twice a year right now and across multiple cities. 

So there's advertisement that goes out to apply to be part of the pitch. 

And entrepreneurs can apply to be part of one city they can apply, for example, in DC but then they can also apply to pitch to the New York cohort, or the Boston cohort. 

In addition, we do have, you know, again partnerships with other angel groups across across the nation. Golden seeds is one partner. 

And so we do get referrals from other angel investment groups that will refer pipeline. 

To an entrepreneur, we also get referrals from entrepreneurs who have gone through the pipeline program who've gotten invested, who had a great experience and they will refer their friends to this process. 

I think one of the things that I've heard with entrepreneurs that have gone through the pipeline pitch competition. It's pretty unique in that. We actually allow the entrepreneurs to hear the pitches of other of the others pitching in that cohort. 
And those entrepreneurs, 
when they go through the experience, 

I've seen them forge bonds together, 

learn from each other in terms of pitching, 

learn from the questions that are asked during the pitching experience, 

you know, 

and then, 

and then they might refer friends or others that are looking for pitch competition that is more comfortable, 

you know, 

or providing that feedback that they may not get by pitching just to another angel investment group or to MBC. 

Right so, speaking of pitching, what are the major mistakes that you see during the during the actual verbal pitch? So, maybe the founder speaks too fast. 

Maybe they speak too slow or maybe they focus too much in the presentation that really drives you way. Doesn't makes you not like the founder basically. 

Yeah and there's there's very rarely any scenario where I haven't liked the founder what me what captures me is when an entrepreneur is able to tell the story of their business. 

I like to understand the origin of why a business has started. I'd like to hear from the entrepreneur, their perspective, or their experience within the industry. 

And what I mean, by that is, you know, really understanding the competitive landscape, understanding their numbers and numbers. Not just in terms of their business model, but numbers in terms of, you know, the customer customer acquisition. 

What types of customers are they selling to? Particularly now how the customer acquisition process is changing with coded. 

I've seen a lot of a recent pitch pitch pitch decks and folks that are pitching that are that. Don't understand how cobit is impacting their business. The ones that are sending out to me right now are the ones who know by the number. 

How cobit is impacting their business and have a plan for pivoting. 

And then the other part is really I, I think a lot of founders missed the opportunity to talk about their team and how, you know, special or different. 

Their team is compared to their competitors or, you know, moving in the market. 

Got it, so now let's talk about current virus, so not about itself. Of course. I don't really care about. Let's talk about fundraising on the fires. How how have pipeline angels reacted to this? How are they doing now? Are they actively investing? 
Were they actively investing when depends I mean, 
just hits, 
how did they react basically and I think, 

you know, 

we saw different reactions so I think there are more angels that saw opportunity within this covet timeframe. 

You know,
some of the previous investments that pipeline angels have made in companies, 

some folks are doubling down on those investments that they've made and making sure that those founders have follow on funding or enough funding to continue through this pandemic. 

We saw that there are some companies that Pre covet may not have been doing as well, 

but post covet because they have a technology or a product that people are buying now during covet that we've seen, 

you know,
their need for fundraising increase. 

So, I think we've seen just again kind of a multiple approaches to fundraising. I would say, for entrepreneurs, it is to find out who is investing and target those individuals reach out. 

Share what the company is again, give that pitch around. Here's my company. Here's here's how I'm doing. In terms of numbers. 

Here's what covet is has told us about our, about our about our audience and here's how we're pivoting. And here's what we need from an investor. 

Whether it's a new investor, 

or potentially going back to the investors that they've had, 

you know, 

covet has has definitely shaken up the environment across the board as an investor, 

particularly excited about some of the companies that I'm seeing particularly in the healthcare Ed tech fintech. 

And Gov, tech spaces. 

Right. That's pretty interesting. And we'll actually come back to a golf tech later on because that's a really fun topic. And we'll definitely discuss it. But first I want to ask you how, how should founders identify those people who are still actively investing. 

So, basically, everyone's saying, hey, yeah, we're business as usual, but in fact, most of them are not. So, how should founders figure out who is actually business as usual? And who is not really. So, you know, I think they're different ways to do. 
It is funny, because I was actually talking to a colleague the other day who is now gotten extremely 
vocal on Twitter and he's mentioned that just in the last two weeks. He's gotten a lot of inbound from entrepreneur. 

So, one, I would leverage and utilize social media as much as possible. Twitter seems if you are looking for funding or want to share more about your business, put it out there and see who reaches back out to you, there's lots of inbound coming that way. 

I think the other is, you do research pitch book, other resources tech crunch have lots of great articles that are coming out. 

Now, that are listing, not just angel groups, but also early stage investors that are actively looking for investments and they'll talk about the areas that they're looking for. 

So, one is do your as an entrepreneur to do your do your due diligence in that aspect. You know, the other, and I've had this conversation just yesterday. 

With a group of early stage investors is typically early stage. Investors are really interested in companies and kind of perk up on companies. Don't necessarily need the funding right now, but are are doing their kind of shopping around. 

Right? You don't want to approach approaching an investor with the desperation of I need this money right now or else. And the company's going to fail is not the best approach. And I actually have seen that unfortunately, the last couple of weeks as well. 

What you wanna do is really take a concerted effort, be strategic and look for funding before you actually need it. That's that's a great advice. That's true. 

So, let's talk about your personal investment pieces. So you are doing angel investments with pipeline angels. How did you personally react to recurrent of ours? 

How did you did you just decide to wait for us to sell down or do you try to watch how others react and just hold them? How did you personally react? So I will have that question. 

So, for me, so I'm, I love data and numbers. 

My my thesis in general is focusing on women own women led businesses, particularly businesses led by women of color. I think corona and coded. 

One of the areas that I'm adding to this is businesses that are family businesses and or led by women who have children and I'll tell you why ninety percent of women reinvest their salary or their income 

into their family. 

And what we've seen with coven. Forty one percent a black owned businesses that exists today will not exist tomorrow. 

And when you put those two numbers together, and you think about the impact of businesses closing and particularly women and investing in their families, I fear for this next generation. 

And so one of the things that I want to do is to make sure that women, particularly women who have children who have businesses,
I want to make sure that their businesses are sustaining during this time, 

have a path for growth and then have a path to scale and so I'm doubling down on those businesses particularly and again, 
those areas of Gov,
tech healthcare ad tech and finntech got it. 

So, any particular advice to founders right now who are playing jewelry sometime soon within three months. So, maybe current buyers will not be over at that point. What's your advice of those people? 

My advice is to think in terms of milestones. 

You know, I think Pre coded folks may set, you may have approached angels and or early stage funds and they would say, you know, I'm raising one point, five million or raising two million for. 

I would ask that entrepreneurs. Now, look at what they need and break it down into milestones and be able to answer the question of what is your next milestone. And how much do you need to actually meet that milestone rather than looking? 

Or in addition to, I should say not rather than in addition to looking at that long term investment goal of one point, five or two million or whatever. 

It is, valuations are definitely being challenged and changing, depending on where you are a nation, depending on, you know, what investment group that you're working with. 

So, I would say for entrepreneurs be, you know, really doubled down on your numbers understand what milestones are working towards and put a milestone fundraising plan together milestone fundraising plan. 

Can you give an example of that? Yeah, so I recently spoke to a young woman who has a tech tech business, and in order to to really maximize. 

The types of individual she wants on the platform, she has to add additional functionality. So she could ask she was asking for one point two million but as we broke down really what? 

She needed to get to five thousand downloads. There was one part of the application or the, the app that she needed to add functionality and that was gonna cost two hundred and fifty thousand. 

So, what I advised hers to really double down on getting that two hundred and fifty thousand, making sure that two hundred fifty thousand trend translated into the five thousand downloads that she needed. 

So, then that she can look at the next chunk of money, which was five hundred thousand, and, you know, growing that into the amount of money that she actually needed, which again was around two million. So, again, focused on. What do you need from that first milestone? 

So that you can show growth, whether that's in customer acquisition, whether that's in revenue growth, whether that's in finalizing a platform. In this case, if you're working with technology, and then continue to show that growth over time. 

That's actually a good good advice. Sometimes founders just try to raise a whole lump sum and they do not consider breaking it down. So that's that's great advice. 

And on that great advice, for probably moving on to the last question of today's app, which is a call to action. What's the one thing that you would like the listener to do? As soon as the episode is over? 

So I would invite listeners if they want to follow me, or Lincoln with me on LinkedIn, that is one of the best places to get in touch with me. I would offer two things. One is reach out. 
I'm happy to set, you know, thirty minute conversations with folks who are in the fundraising process and provide my thoughts on that. I think the first ten people who do that, I will make sure that I prioritize them. 

The second call to action,
I would say is to take a step back for an hour of the day, 

and to really reposition the thought process around investing or approaching your fundraising and what investment you need to write down your top, 

three goals and then to crush those goals in the next two weeks. 

Right I think writing down goals, specific goals and reaching those milestones us that's really good. That's great advice. That makes you focused, so thanks for that Christina, we'll wrap it up here. 

Thanks a lot for coming up and for sharing your thoughts on this process and stay safe during current of ours to constantly.