Video interview with Stephanie Hanbury-Brown, Managing Director Golden Seeds. Stephanie has been the Managing Director of Golden Seeds LLC, which provides investment capital to early stage, high growth companies, since its founding in 2004. Prior to that, she spent 20 years working in the financial services industry in Sydney, London and New York. The majority of her career was with J.P. Morgan, where she headed several global businesses including Global Head of Futures and Options, Head of International Private Banking, Chief Operating Officer of Global Equities and Head of eCommerce.
Could you tell me about Golden Seeds & how this network of angel investors support women entrepreneurs?
Golden Seeds is first & foremost a group of investors. We support women entrepreneurs by giving them capital that’s number one. It’s very tough for women entrepreneurs to get capital. I guess it’s tough for all entrepreneurs to get capital but definitely women entrepreneurs are an under served segment. They really only get between 0 & 6% of venture capital in any one year. But capital is best when it comes value added & ours comes with a lot of advice, mentoring, coaches to the entrepreneurs. Because we have a network of 160 members we can use that network to open doors for the companies whether it’s for partnerships, potential acquirers, customers. All of us are really interested in helping these companies grow.Stephanie Hanbury-Brown
Wow thank you! How do you become an angel investor with Golden Seeds?
First of all you have to be sponsored by another member. You have to be an accredited investor per the SEC definition. After that you just have to have a passion for entrepreneurs. There’s a lot of learning involved & you have to be willing to roll up your sleeves & do real work around due diligence & sitting on boards of companies. But most of our members are successful business people themselves in their own right either entrepreneurs or corporate people or marketing or financial people. So it’s the full range & all of that is extremely valuable because all of it can help companies.Stephanie Hanbury-Brown
And how many have you got in your community of angel investors?
We have 160 members altogether & most of them are women. We do have some men as well & we love men. They’re concentrated in New York, San Francisco & Boston. We also have a small group in Philadephia. Then we have several elsewhere in the country that come into one of those centers.Stephanie Hanbury-Brown
What is the process for a female entrepreneur to obtain funding with Golden Seeds?
For an entrepreneur to obtain funding from us, first of all she fills in an online application from our website. This is viewed within one or 2 days by our screening director. Then forum leaders in the locations in which we hold forums. So it could be Boston, New York, San Francisco is where we do our screenings. So then those people review the application & choose a subset from the application to come into screening. Then the entrepreneur is in front of any number of us from our group as she gets screened. Those who make it through the screening will then be invited to a forum. So then you pitch to all the members at the forums. If you get enough investor interest at the forum, then we hold a 2 hour meeting immediately following the forum so we can dig into key issues. If things go well from that meeting then we form a due diligence team. We do about 2 to 3 months of due diligence. At the end of the process if all continues well then hopefully we make an investment, put someone on the board & then start working with the company alongside the entrepreneur.Stephanie Hanbury-Brown
Fantastic. Is it like with venture capital, a lot of venture capitalists say they like to invest in people locally, close to them? So would you get entrepreneurs from the Mid West, Florida or other parts of the country?
We invest in entrepreneurs all over the US. In fact we have a company in Canada that we made an investment in last year. One reason why traditionally both angel groups & venture capitalists like to invest locally is they like to be able to be close so they don’t have to go too far to board meetings. So they feel that the entrepreneur can easily get to them. But we’re quite comfortable working remotely. Our members do of course fly to board meetings. We feel a lot can be accomplished without having to be in people’s back yard.Stephanie Hanbury-Brown
Fantastic. That’s reassuring for some of the uncovered areas particularly the MidWest. I’ve had inquiries from people in that area. What do you look for in women entrepreneurs & startups that indicate interest to you in investing in their businesses?
When we’re looking to invest in an entrepreneur, the first thing we look for is passion for her idea. This is very easy to detect. Most entrepreneurs are actually very passionate about what they’re doing. So the why they’re doing the business is a really important thing for us to ascertain. Secondly how much experience does she have in the arena in which she’s established her business? Even if she doesn’t have all the experience that’s required, has she been able to demonstrate the ability to build a team that complements her skills & experience. And put other people around the company such as advisory board members who can really help her with introductions & advice, counsel all of that. So they’re the critical things such as advisory board members who can really help her with introductions. We do focus on 3 sectors: consumer goods, life sciences & internet businesses. But we’ll look at anything outside of that but that’s where our core expertise is.Stephanie Hanbury-Brown
Brilliant, brilliant. What can women entrepreneurs/startups do to increase their chances in sourcing angel investment, generally rather than specifically Golden Seeds?
When an entrepreneur is looking for investment, there are lots of places to go. You have to get out & about & go to venture capital fairs & forums & meet & mingle with investors. Don’t be shy about promoting your cause. So that’s number one. But you have to build a relationship, because people don’t (or at least very rarely) just write a check after one meeting. So this is a relationship building exercise that can take a while. I think that’s a really important thing to establish. Even going through a few months of due diligence is about developing a relationship. So it’s not just about fact checking. It’s great to get some individual introductions when you go to a venture capitalist or an angel investor group as having an advocate there for you makes a huge difference. You can find angel groups in particular if you go to 2 sources: the Angel Capital Association website lists angel groups around the country. In addition AngelSoft which is a deal management system many of us use also. It helps you find groups. Venture capital firms, you can find them through the the National Venture Capital Association website. Then look at who are the partners. Use Linkedin & be creative about getting personal introductions.Stephanie Hanbury-Brown
Great, great good idea. What sort of challenges do women face if they become an angel investor? Obviously you’d have lots of experience with the challenges?
Yes, becoming an angel investor is really a fun thing to do. I think it’s a great second career, especially for people that want to stay involved in the business world but don’t necessarily want to be fully employed or have a boss. But it’s a lot of work because you really have to do a lot more than just write a check. You really have to be willing to support the companies & you really have to go through tough times with the entrepreneurs. It’s really important that you’re communicating with the entrepreneur & have them communicate regularly with you because it’s hard to help the company if you don’t really know what the challenges are.Stephanie Hanbury-Brown
So really building the relationship between the entrepreneur & the investor?
Yes like all business this is a relationship business.Stephanie Hanbury-Brown
Yes of course because we’re people, we’re humans! Great! What qualities & experience are necessary to be a female angel investor?
To be an angel investor it’s extremely valuable if you’ve got some business background yourself & actively engaged in the world. Because your connections can really help these companies. Your advice can, your experience, your particular expertise can too. But it’s your connections that are going to help them mostly because getting access to big companies for partnerships, for clients, that’s the toughest thing that entrepreneurs face. Any help that we can give them in that respect is extremely valuable.Stephanie Hanbury-Brown
Thank you again for your time today. I really appreciate it, I know you’re very busy.
It’s great to meet you.Stephanie Hanbury-Brown