In this episode, hosts Helen and Julie speak to Monica Murthy, FinTech Sales & Partnerships Lead at Alloy, and Jenny Johnston, Investor at Better Tomorrow Ventures, about Angel Investing!

We're excited to announce the fourth episode release of our new podcast, Beyond Two Percent!

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Beyond Two Percent: Episode Four - The Ins and Outs of Angel Investing

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Beyond Two Percent analyzes the critical questions, issues, and dynamics that affect people differently by gender - and the intersection of those dynamics with finance. This week's roundtable focuses on venture capital, and we're lucky to be joined by Monica Murthy, FinTech Sales & Partnerships Lead at Alloy, and Jenny Johnston Venture Partner at Better Tomorrow Ventures.

As always, our guests join our two fabulous hosts, Julie VerHage-Greenberg and Helen Femi Williams. We'll publish Beyond Two Percent monthly - if you'd be interested in joining an upcoming episode, let us know! Reach out to sponsor@thisweekinfintech.com.

SPEAKERS

• Monica Murthy FinTech Sales & Partnerships Lead at Alloy
• Jenny Johnston Venture Partner at Better Tomorrow Ventures
• Julie VerHage-Greenberg, Head of Content and Community at Orum
• Helen Femi Williams, Fintech Journalist

TRANSCRIPT

Helen 00:16
This is the beyond 2% podcast and I'm your host Helen, Femi Williams,

Julie 00:20

and I'm your second host, Julie Greenberg, this podcast is brought to you by this week in FinTech, which is the front page of global FinTech news, fostering the largest FinTech community through newsletters, thought leadership, and events.

Helen 00:33

And of course, podcasting. And you might have listened to our other podcast. Hey, FinTech friends. Well, this podcast series is all about women exploring everything from investing to motherhood, to intersectionality, and so much more.

Julie 00:47
And we encourage you to give us feedback on the topics you think we should be discussing

Julie 01:09

And if we were specifically talking about FinTech, the industry could benefit from more women at any level, because women in general have not typically been in the spotlight as a target audience for financial products and services. They're an underserved customer segment with a massive unmet need.

Julie 01:34
And that's why this podcast is called Beyond 2%.

Helen 01:37
There is a world of tech-driven financial products and services that is yet to be discovered

because of the lack of women leaders in this space

Julie 01:45
and through group discussions with leaders in these spaces. This is what we want to explore.

Helen 01:50
This episode is all about angel investors.

Julie 01:57

And thank you to our sponsors in New York City FinTech women, FinTech woman's mission is to connect, promote, empower women to advance their careers. They need help from everyone if we're going to make a real change, encouraging male allies to become members and come to our events. Membership is free. And you can sign up at NYC FinTech women.com and follow them on LinkedIn, Twitter and Instagram.

Jenny Johnston is an investor turned operator. She began her career at Goldman Sachs before traveling to emerging markets. Jenny then joined a bank partnerships team, and today she has a venture partner at Better Tomorrow ventures and serves as a venture partner when not figuring out how Twitter works, and mentoring early stage entrepreneurs Jenny can be found in the Bay Area improvising hiking and surfing but never waiting in the brunch line

Helen 03:02

And Monica, Monica Murthy manages FinTech sales and partnerships at alloy. Her prior experience includes being head of operations. Monica is an advisor and connector in the FinTech ecosystem. She sits on an advisory board of the village Capital Finance forward program and is also an angel investor. In 2019, Monica worked, with an inclusive grassroots community of women and their allies, entrepreneurs, executives, and professionals at all stages of their careers who are trailblazing in that industry. Hope you enjoy this episode.

Julie 03:54

you guys are both angel investors and or LPs. And it's something that I feel has a lot of mystery around it, especially as a woman, I didn't look too much into it until I was at fintech today. And then many people in our community wore either l LPS or angel investors. So I started to learn a little bit more about it, learn that it's actually a lot easier to do than what you would expect you think like there's so much paperwork you have to do and all this kind of stuff. And it's actually not that bad. You definitely want to have knowledge going into it and whatnot, because it's a lot different than investing in like Amazon stocks or something like that. But um, Jenny, let me start with you because you're someone I've actually co-invested in a couple of deals with as an angel investor. So I want to know more about like where you got started here because I know you've been doing this a lot longer than I have.

Jenny 04:48

Thanks so much, Julie. And it is something that still feels like I'm demystifying for myself to be totally honest. And don't feel like I've been doing it for all that long. My first angel check was in March of 2021 and came together because a good friend of mine from banking days was raising a pre-seed round in Brazil. And it felt like a kind of natural evolution of the relationship we already had. And he reached out to me and said, Well, are you interested in putting an angel check in, And I remember pausing and saying, Well, I'm not I'm not an angel at the time. And I had been an investor before and it was this moment of pause, just say, well, actually, yeah, I could, I could do that. Why not? I can't put a tonne of money. And I don't have a tonne of money to be able to put in. But that was my first baby step, stumbling, stumbling into it. And since then, have probably made 20 other angel investments, both out of my own capital through Scout vehicles, and through many groups, and indications that exist out there. And yeah, it turns out that it's not actually that hard. You actually don't have to have all that much money to do it. Do it yourself.

Julie 06:03

Yeah. Remember, Monica, when we were catching up at FinTech, DEF CON a couple of months ago, you mentioned on the LP side, people think, Oh, you have to have like probably a million dollars to put in to be an LP into some VC fund. But you can actually have quite a bit less than that. Especially, there are some funds, like if you were a previous founder or operator or something, they might lower that minimum just to have you as an LP to be able to advise some of the companies they invest in. So tell me a little bit about your experience and how you got started there.

Monica 06:33

Yeah, absolutely. So actually very similar to Jenny, I wasn't, I knew I was interested in Angel investing, I knew I was interested in investing period. But it's not something I saw for myself as a career move, at least not in the short term. And it's the kind of thing where I did not think about how easy it would be. But I also didn't feel like there was a safe space to actually dig deeper. So both with Angel investing, which I've been doing since like the summer of 2020. And then with recently, like in the last six months coming on board as a smaller LP and a fund, both opportunities came up because someone reached out to me and said, Hey, I think you'd be really good for this, have you thought about it, and I immediately disqualified myself, I was like I don't, I don't really think I have that kind of money. I want to I don't know if I'm valuable enough for that. And in both cases, two really awesome women actually did an amazing job of like, walking me through the process, actually helping me understand how much money you need. So in the case of coming on board of fund as an LP, I did not know this at all, there are a lot of funds that allocate room specifically for useful operators connectors in the industry. And for those specific people, the requirements on cheque size are lowered. Just because I like to be transparent, I'm going to put numbers to it. You could consider 40 or $50,000 as your contribution to a fund. And something else super important. I did not know, you do not give somebody that money upfront. That's you get to pay it out over whatever set schedule they have for their capital calls. So in some cases, it's every six months over two years. In other cases, it's annually over four years. Whatever their disbursement schedule is, you can actually ask about that and get better information on it. But it does vary pretty wildly from fund to fund. So you don't need $50,000 on hand, you need probably like half or a quarter of that on hand.

Jenny 08:38

I was I was just gonna jump in there as well, because I think for fun that I first started syndicating deals three, which was rally cat ventures focused on precede FinTech in emerging markets. Our minimum check size was $10,000. So yeah, to think that you? Well, it's all obviously all relative. But for me, I thought that it was hundreds of 1000s of dollars to be able to be an LP in the fund, and was really pleasantly surprised to hear that the bar can be quite lower.

Monica 09:03
100% agree. I just assumed minimum check size was like $500,000. Yeah.

Helen 09:10

No, I was gonna say I'm so glad you kind of put numbers out there. Like personally, angel investment isn't something I've done. And it is interesting, you kind of talk about it being, you know, having that safe space where you can ask these questions because to be fair like I would have made those assumptions as well, I would have been like, what makes an angel investor so when he just has all this capital, and just seems to have it so we can just invest in things. And I think specifically when it comes to women there is we're even further away from that because I know for a lot of times women overthink things or do not necessarily overthink things. Still, we'll be like, I need to have everything in place before I dip my toes into one situation. Have you found that specifically like your gender and like maybe your upbringing or any of these things have found they've kind of been a factor in how you So, how you think about angel investing or like maybe your apprehensiveness? Or maybe your even your assertiveness towards angel investing.

Jenny 10:08

So obviously hard to say if it's my gender specifically that has provided me with certain lenses going into angel investing. But I'd say I definitely had impostor syndrome. When I first started, which sounds like Monica, you did as well. And I'm still moving through that to some extent, to think that until look at my portfolio and say, I now have 20 plus companies that I've put a check into or syndicated a deal for, is not a part of my identity that I can readily accept. I'd say for me, one of the rabbit holes, I went down, and it felt like I really needed to understand exactly what the implications of this were, were taxed. And I got I don't know if that has to do with my gender. But I went down a deep rabbit hole of how exactly you have to do this, it's not just about me writing a check, and then going off into the ether, there might be implications that I'm not aware of, for Angel Investing, and found that there are actually a lot of platforms today love FinTech, for this reason, that help you do that.

So when I first got started, I look back at these email chains and laugh, but I asked every single question that came to mind I got on the phone with them. And that really helped essentially, handheld me through the initial check process. And feeling like I've I've covered all my bases. It also really helped the first fund that I was an LP in rally cap ventures, I was really close with the founders, and so felt like I had confident that I could ask dumb questions too. And it's one of the things now as we've continued to grow our LP base of female angels, I want to make sure that every female coming in like kind of has a roadmap, and still obviously a work in progress. But seeing someone that's come before you that you feel like you can ask those dumb questions do was incredibly important for me.

Monica 12:11

I have so many thoughts. I mean, absolutely seconding what Jenny said, I think it was really important for me, as I made my first angel investment. And as I did actually come on board if and as an LP to feel like it was the kind of environment that was actually going to set me up for success. So I know with the angel, Jack's, I was really upfront with my first investment. I said I've never done this before. Here's why I'm interested. And for me, it was that I'd actually been

involved in the mentorship space for a while through various accelerators, and things like that, I'd been on the board of the village capital programme. So I felt like I had a really good sense of like, assessing the potential of a company from a go to market and the commercial standpoint. And I said this is what I'm happy to offer you. But I'm doing this for the first time, and I need you to be comfortable with that.

And the founder she was like, honestly, this is why I do what I do. Like, this is why I allocation for angels. I'm really pumped to bring on board people who are going to be impactful to my business and my growth. And not just institutional investors who already know how this works. Very similarly, the first fund I came on board was Mendoza ventures. Senator who's one of the founders of fund did an amazing job. She didn't just walk through like the numbers and the key stats with me. She said, like, you know, do you want me to explain to you what Kerry is and how it works? Do you want me to kind of help you model out what you might see from this investment in 1015 20 years? Like we got pretty deep. And she was very candid with me, which made me feel a lot better about actually signing on. And I guess kind of like an aside, but I want to address something Jenny was saying about like impostor syndrome. I think about this a lot, because I actually I think I operate from like, masculine energy, like a lot at work, right? I'm pretty confident in myself. I, I'm generally pretty comfortable, like I'm a salesperson, I negotiate a lot. I'm, I'm comfortable being aggressive and combative. I am not risk averse. I, I have started asking myself, is this imposter syndrome? Do I really think I don't have a place here? Or that I don't deserve to be here? Or have I just gotten really tired of like forcing my way into rooms where I wasn't invited. Right. So I think a lot of times, like a lot of the friends I'm talking to that are interested in Angel investing or kind of thinking about startup investing deeper. Don't feel like they have invitations to actually come on board. So they're like it's not it's not that I'm not interested. And I see this with a lot of like my female peers or peers who are also people of colour. It's not that they're not interested. It's not that they're not informed. They just feel like they're not getting invited to the deals, or to the funds that are actually going to pay off for them

Julie 15:07

on that point to, from what I've seen so far. And from my personal experience, it seems almost like getting that first step in either becoming an LP or an angel is the hardest part. It's not necessarily, you know, once you have deals, it's not like, the founders don't want to take your money because you're a woman. I haven't I haven't experienced any of that. And it sounds like neither of you have experienced that either. It's just the whole imposter syndrome thing. That's the the main crux of what's holding us back. Does that sound accurate?

Monica 15:39

I think so. Yeah, I would agree. I've never, I've never experienced anyone saying they didn't want to take my money. It was more about actually finding a way in front of that founder or into that deal in the first place. I do actually think that's an inherently like, gender kind of closed circle issue, though, because I think a lot of people, most of my co workers who have invested in funds, said, oh, yeah, guy went to college with or guy went to grad school with was an early employee at this startup. And he started his own fund, and I wrote him a check for X amount of money. Those are just not circles that a lot of women and people of colour are invited to or participate in. So you're just missing out on the deals. But I would agree, I don't think I've ever had a founder or a fund say, we're not sure you're the right fit.

Jenny 16:28

I completely agree with what Monica said, if anything, once you have access, I feel like I've actually gotten into deals because I am a woman, again, don't know can't confirm, but it does feel like people are seeking out diverse voices on the cap table and the vast majority of other angels, they're going to look exactly like them. And oftentimes, they are male founders, even though the majority of my angel portfolio is women, and then people from underrepresented backgrounds, I find that actually, once you get into those really exclusive circles, as Monica mentioned, people are looking for diverse angels, and you can actually have a leg up in winning some of those deals.

Helen 17:03

Yeah, I think you both make a really good point in there about kind of like the diversity element. Because yeah, this might sound like a stupid question. But obviously, in a lot of ways people want your money, they see that you know what you're talking about you you have experience, and they want your money. But I guess the question I have is like, as an angel investor like Monica and Jenny, you're not just giving your money, right? Or maybe you are, there are other things that are involved, like, you know, so I guess my question is kind of what is the responsibility of angel investing? That is that outside of, you know, the money? Monica, John AnswerFirst? What has it been like for you?

Monica 17:44

Yeah, I think there are actually two two kinds of layers to it. So I think you can either be an angel where you gave someone money, and you're getting equity in that company in return. And you can also be an advisor where you're not giving them money, but you are getting equity for your expertise. And I think the burden of entry from a personal time and effort perspective varies. As an angel, I feel like it's my responsibility to help you kind of with internal conversations around how to structure deals, how to structure your go-to-market plan. That's, that's what I do. And that's what I bring to the table. And if you ask me a question, I think it is my job to answer and set aside time to go through that with you. As an advisor. On the flip side, I think it's my job to proactively work for you. So anytime I've come on board as an advisor, I'm pretty clear that this is what I'm going to offer you on some sort of recurring basis in exchange for the equity. So I do think about it a little differently. I think that when you come on board, as an angel, you're on the founders radar is someone they can reach out to as a resource, slightly less so than like an advisor who I think is almost like part employee.

Julie 18:51

No, I think that makes a lot of sense to just have all those expectations up front kind of clears all the air for that, stepping back, just because we talked about the stock market a few episodes ago. And I want to dive into, you know, in that episode, when women are growing up, we talked about how like, you're not talking to your mom about investing in McDonald's, or like, oh, did you see people's earnings yesterday or something like that? That's more like a guy to Dad type of thing, especially when you're in high school, college, etc. What about what can we do here to better educate women and make them feel less of that hurdle to start doing something like this like they actually are capable? They actually do have enough money, they actually do qualify? They actually are smart enough. I feel like the answers to whether it be a private company or a public company can be similar in some ways, but very different in other ways as well. Jenny, do you want to take this one first?

Jenny 19:50

So I think first and foremost, it's things like this that can be really helpful. The more that we talk about it and create circles where people see representation Unlike them in these conversations, the better. So kudos to both of you for bringing us together and having these conversations. I think really it is that access point like you have, you can't know that there's a world unless you know that that world exists. And that was a big challenge. \ I didn't even know really what angel investing was, even though I had been an investor for five years before. And obviously, I knew what it was, but I didn't know that it was somebody like me could step into it. And that there were communities that were gateways into a much deeper engagement as an angel, or, as Monica mentioned, also as an advisor. And it's really just nope, like, knowing that it exists. And putting as much information out there. So I also say, I'm happy to talk to anybody who's listening to this podcast about angel investing, I would love to talk to you about it, regardless of your background, where you're from who you are, how you represent yourself. Because I it's opened so many doors for me, it's helped me stay even more engaged in the entrepreneur community. And I find it just so incredibly rewarding. To be able to work so

closely with entrepreneurs and have their trust. So I think it really is just about getting it out there letting people know that this exists. And this is for them.

Monica 21:15

Yeah, I think building off of something Jenny said, every woman or person of colour that I know who's an angel investor, or, or even is investing in the stock market, or is investing in different funds are the most enthusiastic about it. They are really openly excited to talk to people about it. However, I think something I found when I started angel investing, and I was talking to my friends about it, people who were telling me they were interested, something was keeping them from pulling the trigger. So I had a lot of friends who said yeah, I've been thinking about angel investing for a while. Can you like send the deck my way? Like, can you bring me into it? And I did that a lot. And none of those people came on board. And it really, really frustrated me. Because I was sitting here like you told me you wanted this, you made it sound like you didn't feel like you had the opportunity I have just given it to you.

And I think what I realised is, I had the benefit of a lot of people who helped me kind of form an investment thesis, right? So I talked to coworkers, I got I got into my first angel deal because Laura who's like one of the co-founders of Alloy brought me in, right, so people who gave me confidence in the business model of the company, as well as how I was thinking about investing. So what I'm actually doing now a lot with friends who are interested is saying, How can you de-risk this for yourself? And that's across the board, like even friends who I was probably one of the first friends in my group to actually start investing in stocks and things. And it was the same concept. I was like, I'm I'm going to de-risk this for myself in these ways. So I know personally, for me, like the best advice I got was to decide ahead of time on a pool of money over a certain amount of time. He said, You know, like pick an amount of money that you're comfortable never seen again like that's how you got to approach this. Anything that you make off of it is like an upside, if you break even also an upside, you have to be able to justify to yourself that if you only breakeven on this, and you don't make anything out of it, that you supported founders that you want it to want it to elevate, that you are supporting technology you are passionate about, there needs to be something there other than just trying to make money off of it. But at the end of the day, decide on an amount of money that you're comfortable parting with, and decide what your kind of schedule for dispersing it is going to be. So for me, I decided on $10,000 over the course of two years, that's like a very, very conservative approach. Like I am just a regular person who works at a startup that was to me the amount of money I could justify on what I saw as like a very long-term bet. And I basically decided I'm not writing a cheque larger than $2,500. So all my checks have been anywhere from 1000, which I think is the lowest I've really seen to 2500. And I said I'm going to invest in companies that are in this space. And for me, it's retail products that I would feasibly use like this is filling a gap in my life, or b2b FinTech infrastructure, because that's something that professionally I know a lot about and feel comfortable evaluating. So that was like how I do de-risked that for myself, like very similarly, I had a friend that I got into stock investing recently, and we kind of went through the same exercise. I said, you know, what's the amount of money that you think you can part with, like, whether it's a small $500 direct deposit at some frequent interval like you're not going to notice that it's gone and so it's Monopoly money now, and it helps you kind of separate from feeling like this is a really high stakes decision that you're making.

Jenny 24:57

I love that and I'm gonna jump in because I use this a similar heuristic, which is similar to this is money that you can part with, I think about it as a membership fee, as a essentially a membership fee into a organisation and into a company into a founder that I want to be close to that I want to learn from that I want to be on the journey with, and thinking about amortising, that membership fee that the $10,000 that you're deploying over two years, over 10 years, and then think about like, would I pay for a membership fee to that club 100%. But if I, I have to kind of think about it as a sunk cost to begin with. And so yeah, I think Monica you're so spot on. And that is a mental hurdle that helped me move through my first check, too.

Monica 25:40

I love that framing so much. Because I actually had a coworker who talked about like how much money he pays on his country club every year, like you're probably spending less cutting a few Angel checks a year. And to your point, it does actually, this is not the reason to do it. But it gets you into certain circles that you probably weren't in before. Like, I find that navigating my way into certain startups, talking to certain founders, because I'm an investor, like helps me get my foot in the door. So yeah, like if that's how you have to think about it to feel like you've added extra value to this choice that you're making. Like there's a bigger upside here like great think about it that way.

Julie 26:21

I love the way that that kind of balances out something that I wanted to draw in and we talked about, again in the stocks episode is how women tend to be more risk averse. And I feel like that's one of the things that often holds women back from wanting to invest in private that's one of the things that often holds women back from wanting to invest in private companies, because inherently you hear all these stats about how many private companies fail. And it's true. That's why any angel check, I've done any angel check you guys have done, we've all assumed like, yeah, it'd be great if we get that money back or more, but we have to assume that that money is never coming back to us. And it's just a sunk cost. So I love the framing of thinking of it as like this membership fee or organisational fee, or just learning fee in a certain aspect as well, both from the founder as well as just different areas that you're super interested in are super passionate about.

Monica 27:11

Yeah. And I think I would actually add on to that, like, I think there's a lot of this is a personal opinion, like I'm just taking a guess. But I think we say a lot we talk a lot about how like women are less risk averse. I actually think women are just more interested in model validation. Like, I think we want to understand how this could or could not pay out for us. Right? So even when we talk about like investing in stocks, like, I think we want to quantify the upside. So we understand, like the different levers at play, or at least that's how I approach things, even in my day to day job. Like as a salesperson, I think about like, what is the potential downside? And what is the potential upside, and I need to quantify those things in order to feel like I can make an informed decision. So like part part of it is like risk aversion, but part of it, I think, is also just understanding what's actually at play. Whereas I think most of the men in my network are operating from a place of really high trust in people that they see as successful. Right? Like, I think men are happy to make more aspirational choices like so. And so he's doing really well he invested in this fun like I'm in it's this amount of money, we'll figure it out. Whereas I think women are like, that's cool. But like I don't, I don't really trust it that much. I want to understand, like how this could pay off for me, I want to understand what all the potential downsides are. So I almost think like quantifying it in some way, is a way to like lean into the risk and be more comfortable.

Helen 28:39

Or even yesterday, I went to this. I think you make a really good point, Monica, about that kind of wanting to kind of understand everything and, and have this kind of now I know where can I go. But I went to this talk yesterday was like this kind of Google I'm remarkable talk. And the lady asked the question, how many people here if they were in a room? Potentially, they wanted to know the answer to this question, or they had a question. But rather than ask it, they would go home and spend three hours googling the answer, rather than just ask the question in a room. And everybody put their hand up, because I've definitely been there. Because I think to your point, we want to know the answer. And we want to we want to get to the end. But sometimes I do think there is this lack of confidence that does come into play where we're like, I'm the only person who knows the answer. Then again, you might have someone else of a different gender come in the same room and just ask the question, and someone's like, good question, because a lot of people were thinking that but I think it does speak sometimes to like women and like you said Monica trying to understand stuff, but I think I guess it I'm thinking it doesn't have to be a loan situation. We don't have to find out the answer to these things by ourselves. And I think that's where what you're saying Jenny comes into a really good place with the kind of de risking and making and thinking about it more as a membership because if you aren't a member Yep, you you would lean on other people, you would ask those questions. And that's the kind of point of it. So, have a question. And it might be quite obvious.

Or I say this because I'm in that same space that I was just talking about with the Google thing. But you know, you guys have now invested, you know, in loads of different things. So, if someone was just starting, you know, they listen to this podcast, and they were like, where I want to become an angel investor like you've de-risked it for me, you definitely de-risked it for me. Where do you start? Like so in the sense of like, where do you find these deals? Where do you start talking to co-founder? Do you just email them? Do you tweet them? Like, like, what is the situation?

Monica 30:37

Yeah. So I think my first like note is one of caution, think about why you're qualified to be an angel investor because that's probably your answer on like, how to find deals, right? So for me, I think that I am qualified because I evaluate business models on a daily basis, like professionally, like, it's something I get paid to do. So I feel pretty confident evaluating the business models of startups that I want to invest in. So the way I approached it was let me talk to the people I know who are in the same space as me, their go to market thought leaders, their revenue, focus people figure out who's angel investing, and I'm going to speak this into existence. I just told people that I was angel investing. I hadn't even written a check yet. I was like, Yeah, I'm Angel investing now. And eventually, someone will send a deal your way. And especially if one of those people that you're talking to is like someone you trust, let them know, let them know that you're open to it, because I think most angel investors are pumped about the companies that they're investing in. And I feel this way, I am very excited to share. Once I've decided I've, I'm going to invest in a company, I'm sending it to all my friends, I'm saying it to people who aren't even angel investors, saying, Hey, I think you'd be pretty pumped about what they're building, do you want to come on board. So definitely, like there's an element of like actually putting it out there and telling people and that's how things come to you. Let's say you don't actually have any inroads in the startup industry. So I actually have a friend like this, he is in the private equity space, very similarly feels qualified to evaluate businesses, but doesn't have a lot of startup friends, I might be his only one. And the way he's approaching this is he's just going to events that are for investors. He's like, I understand the frameworks at play, I feel like I can have an intelligent conversation with the people at this event. And I'm going to show up and say I'm sourcing Angel deals for myself. And again, kind of speaking it into existence, seeing what comes out of it. Worst case scenario, you've met some cool investors at this event. And that's like, already some upside. But for the most part, like that's that approach has been successful for him where he's going to these events and saying like, these are the things I'm interested in, this is the value I think I can add. And it's a little bit of a slower process, when you approach it that way, when you don't have as much of a foothold in the industry. But it is pretty, it is pretty like democratic like you can just insert yourself in that industry and things will come your way.

Jenny 33:06

So I think Monica got that exactly right. And there are things that you can do to help with that. Like one of the things that helped me when I first got into investing in general was reading the why we invested blogs or posts from other funds to try to get a sense of what their investment thesis was how they thought about the deal. That was one piece. The second piece is taking a step back and seeing where can I add value in the industry. And I think this is also a point of getting over the imposter syndrome is if you are a female operator, within any industry, you have expertise. And the first piece is to recognise that and own that and say, what companies out there am I excited about that, I feel like I actually have some form of edge to be able to support them through. A lot of angel investing feels like therapy, honestly, most of the time. And so if you're just a good friend and a good listener, and I think generally women are exceptional at that, that you're already ahead, like that's already a value add that you can bring to entrepreneurs just being there and being an ear to listen to and to ask questions and not show up with the answer. I think that's actually a superpower that many women can bring to the angel investing space is coming with a question as opposed to the answer. And then there's the ownership of you actually have operational expertise, like for myself for my time and money and Treasury. I talk banks all the time bank partnerships, back end b2b payments, every now and again, my angel investments stray out of that space and I'm very upfront with the founders to say like, I'm gonna actually extract I think a lot of learnings from you in this relationship, but I'm here for you in all of these other ways. But being very crisp with yourself on what can you add value, getting that confidence, even if just writing it down for yourself, and then understanding how to evaluate deals once you have those two pieces in place? It's going to be About that access and just starting to own, I am an angel investor, I could be an angel investor and to Monaco's point, the more you start saying that and put it out into the ether, it will manifest itself. And these circles are ones that once you're inside of it, things are gonna come your way. And then you just gotta rip the band aid. At some point, it might like I rip the band aid with a $1,000 Check. And suddenly, I was an angel investor. That's all it took.

Monica 35:24

And I actually to add to that, there are some really awesome groups that you can join to kind of get a sense of how the deals work. So I know one is the RU V. Alliance, they send out a lot of information on deals, even if you just kind of want to lurk and hear about the deal details to get a sense of like how deals differ from one another like that's a great place to start. And the leadership of that group does an awesome job like creating allocation and sourcing it for the members in really exciting deals. Another Amanda cowboy actually has her own group for underrepresented investors. So it's a great space to kind of talk to each other learn, ask questions, a lot of first time angels in that group. And kind of Jenny's point, like actually just talk to a lot of the founders that you're running into. I've now that I think on it. I hadn't quite thought about it like this until this moment. I've never had a founder asked me for like stats on my investing history. Like never has anyone said, how many startups have you invested in? Like, let me think about if I want you on board. For the most part, most of my angel deals have been me hearing about someone's business, being super pumped about it asking lots of questions, and then saying, hey, look, this is super forward, because I met you 10 minutes ago, but are you raising? Because like, I would like to give you money? And the answer is always yes. So just talk to the founders. Yeah, figure out what you're pumped about.

Julie 36:51

We we've focused a lot on the angel side of things. So I have a two part question to kind of close this out. Since we're coming up on time. One, you know, how do your answers differ between the angel investment and becoming an LP because it's obviously a very different process where if you're an LP, you're not actually deciding which companies they invest in, you're moreso backing the investors themselves and believe in their expertise in the areas that they're looking into? And to which you think is the better one to start with Angel investing or becoming an LP? Monica?

Monica 37:25

Yeah, I, I think starting out as an angel is the better call, the checks are lower, it's a much smaller commitment. As an angel, you're not really doing a lot of like diligence to to be really honest, like unless you're writing really large Angel checks. If I'm giving somebody $1,000, I
can ask, but I'm not really running like full due diligence on them. Like I think it's a lower barrier to entry. I do actually think joining a fund as an LP is a lot harder. I think that's an area where deal flow and like opportunities are not abundant, I think you have to push pretty hard and like it's a bit of a process to feel like those opportunities are open to you. And you know, part of this is kind of what we talked about people who run in similar social circles and networks tend to work with each other. But part of it is also just that funds have a limit on the number of people they can bring on board. So they do have to be a little bit pickier. And it's not as open of a call as individual startups raising their own rounds. That being said, I would if you're planning to join a fund as an LP, it's a long-term saving goal like you want to feel comfortable with the amount of money you're committing because it is just like a lot higher than any individual angel investment. This is a personal view, I also just think you have to feel really bought into the like mission and ethos of those fund managers. So I know for me personally, I kind of I looked at both the business model. So I talked to a lot of different funds. And where I landed was, I'd like to, I'd like to invest with the kind of fund that's thinking about like the short term and long term. So I think there's like a few different methodologies out there. There are some funds that write small checks to you know, like hundreds of companies, there are other funds that write really big checks to five islanded. Somewhere in the middle. I felt like early-stage companies that have good metrics and good growth. Those are the companies I want the funds to be investing in. For me, those are deals that I can't get myself as an angel, but it's also an early enough entry point that the equity will pay off. It was also on the flip side really important to me to work with a fund that emphasised diversity, not just in the founder base, but actually at the company. So something I really appreciated about Mendoza was the managers essentially said, you know, we'll actually talk to founders over the lifecycle of their growth, to help them track towards creating the best representation they can at all levels of the company. And I liked that they were willing to kind of intervene and like actively insert themselves, that was important to me, because it's a lot of why invest, I want to support companies that support people who look like me, Jenny, I'd

Julie 40:17

love your thoughts here too, and is adding on one other aspect of that as well, when we make Angel checks, we've established that, we assume we're not going to get the money back, I would assume when you invest in a fund, I would be really surprised if you don't get that money back, you might not make a crazy return, because not every single fund does, but you're not going to lose all your money either. So there is that shift in mindset as well,

Jenny 40:42
for sure. And the only other angle I'll throw in is there are sometimes hybrid solutions here. So for sure. And the only other angle I'll throw in is there are sometimes hybrid solutions here. So two of the funds that I am a part of what I would call a syndication community.. But that was a way to get in an LP check into a fund structure. So I actually had the upside returns of the fund. But as part of the fund, you could syndicate your own deals and other LPs, essentially, we're LP angels that have the ability to bring deals forward to the community, which for me, when I was stepping in, I got to benefit from all of the diligence that was actively happening in the Slack channels. So from the point of feeling comfortable having conviction around deals at the earliest stages, you can start to learn from people in these communities. So that's almost a hybrid is around, there are a few that exists out there, FinTech angels, and rally cap being two of them, that allows you to toe the line. And that was the first time that I started to not only Angel invest, but also syndicate deals, which then continued to grow my confidence to say not only do I have unmatched conviction in this deal, but I'm gonna bring in other people around me and was a perfect opportunity for me to knock on the virtual slack doors of the other female LPs and these communities and say, Hey, I think this one is super interesting, would love to bring you in, and essentially guide them through that process.

Monica 42:15

when I wanted to start angel investing, I, thought there was like paperwork to fill out, like in my mind, and an accredited investor is some sort of form I have to fill out to like, verify my eligibility. So I'm just gonna throw it out there now because I didn't want to ask anyone I was like googling it. I have, I have a friend who actually knows an angel investor whose accountant charged her money to come up with some like fake ass form. There's no paperwork. Yeah, I know, I know. It's wild. There's no paperwork. Yeah, you look at the eligibility criteria, and you decide if you fit that criteria or not. But like there's no process to become an accredited investor. So I just wanted to throw that out there because I think a lot of I have wondered about it for the longest time. And I'm like, really embarrassed that I didn't just ask someone sooner. So I'm going to save everyone else listening to that embarrassment, there's no paperwork, there's no process. Go do the thing. Yeah.

Jenny 43:18

That was a big part for me, too. Which isn't like there are tools out there that also help you set things up and like figure out a tax-advantaged way to do it. Sending a wire still a pain in the butt. And that is probably the most annoying logistical piece about being an angel investor. But yeah, as long as you said beyond that, there's it's literally just sending money.

Helen 43:39

All right, I think that's a good place to leave it. Go do the thing. I feel like work. Yeah, don't worry about the paperwork. Just give someone money and hope that something Oh, actually, no, you said you shouldn't expect to get the money back. So just go around giving people money, I guess. See what happens. If you take away one thing. Take away one thing so good. Good boss, guys. Thank you so much for coming on. Beyond 2%. Beyond 2% Okay, so I really enjoyed that episode. I think it's quite clear. We obviously need more women in the space.

On the next episode, we're going to be discussing intersectionality this is a topic I proposed and something I'm really passionate about. A lot of my work outside the FinTech space is actually around consulting with companies on how they can bring a more inclusive, intersectional environment to their organisations. To me, honestly, that just means people being able to bring their whole selves to work, not having to hide an aspect of their identity. And I do feel like it's something that should be celebrated. So yeah, I'm excited to see what our panel thinks and what they think about the topic. So yeah, tune in next month.