Pipeline Fellowship hosted its signature conference last week at Goodwin Procter‘s midtown Manhattan offices. The conference’s focus was on angel investing, featuring speakers and panelists who ranged from serial entrepreneurs to seasoned angel investors and VCs.
Founded in 2011 by Natalia Oberti Noguera, Pipeline Fellowship aims to decrease the disparities in the entrepreneurial community through their bootcamp program, which has three major components: education, mentoring and practice. Since April 2011, Pipeline has trained over 70 women, who have committed more than $350,000 in investments. Pipeline has expanded from New York to Boston, Chicago, Los Angeles, San Francisco and Washington, D.C.
“Women often shy away from pitching a project because they believe they aren’t ready yet or fear they won’t receive the funding,” said Oberti Noguera, who stressed that you must put yourself out there and meet people; you have to build networks if you ever want to receive funding. According to Oberti Noguera, the goal of Pipeline is to give women the opportunity “to form actual questions and meet people who are doing it in ‘live in action.’”
According to the Center for Venture Research, out of all the startups that pitched to U.S. angels in 2012, only 16 percent were women-led, and of that 16 percent, 25 percent secured funding; only 6 percent were minority-led, and of that 6 percent, only 18 percent secured funding.
Oberti Noguera also noted that, in 2012, only 22 percent of U.S. angel investors were women, and only 5 percent were minorities. It seems the lack of diversity exits on both sides of the equation.
This year’s lead instructor at the conference was Catherine Mott, founder and CEO of BlueTree Capital Group and BlueTree Allied Angels, a network of private equity investors. Mott laid out the basics, explaining the difference between angel investors and venture capitalists. While both deal with due diligence, are sophisticated and understand deal terms, the key difference is that angels are investing their own personal money, whereas VCs invest other people’s money (pensions, etc.)
The first panel, titled “Angel Investing in Action,” featured Albert Wenger, Carol Curley, Anil Dash and moderator Vanessa Pestritto. The panelists were first asked how they got started as angel investors and what advice they would have given themselves.
Wenger, who is currently a partner at Union Square Ventures and has invested in successful companies such as Etsy and Tumblr, said that he first started out as an entrepreneur. He noted that, as a white male, he “started out on third base” and soon co-founded a venture that “tanked significantly.”
Wenger didn’t start angel investing until he made a successful exit. He realized he wasn’t a very good operator, but wanted to stay in the entrepreneurial world, so he decided to invest.
He also pointed out that the number one mistake among angel investors is they don’t see enough deals before they start investing. He offered this advice to the women present: try first to invest in things you know something about.
Moderator Pestritto, the program director of New York Angels, encouraged the angels to see lots of deals—as many as you can. “I tell my members [that] all the time…I push [them] to go to pitch events,” she said.
Collaboration is also important—you must learn to utilize your network. There is a social obligation of the network, Pestritto added, and “I have so much respect for investors who say no to good friends who ask for an investment [without a business model]…Stay who you are.”
The panelists were also asked how many deals they invest in per year.
Curley, currently a managing director with Golden Seeds, said she invests in three major deals per year, as well as multiple smaller, less-involved deals. On average, she deals with 10 to 15 active investments (seed and series D).
She urged the women not to “fall in love” with a startup and wind up over-investing, but rather to keep the investment proportionate to the deal size (i.e. earlier stage, smaller investment amount).
Throughout Lead Instructor Mott’s intermittent presentations, she often stressed the importance of management, saying that it’s all about execution. You need to choose to invest in a company with good management, with a founder who is coachable and has an ability to build and lead a team.
Mott compared this to the famous real estate saying: “Location, location, location.” For angel investing, though, the key is: “Management, management, management.”
Image credit: Photos 1 and 3 by Erica Torres. All others by Megan Maneval.