Crowdfunding

BOOKS

Crowdfund Investing for Dummies by Jason Best, Zak Cassady-Dorion, and Sherwood Neiss. The authors are also the co-founders of Crowdfund Capital Advisors, a market research and education firm dedicated to the crowdfunding movement. They were also instrumental in designing the framework for the 2012 JOBS Act that paved the way for crowdfunding platforms to emerge.

CHAPTER REFERENCES

Peer-to-Peer Lending. Prosper and Lending Club are well known examples of peer-to-peer lending platforms. There are a number of articles, “best of” lists, and other resources online that help navigate this world. As always, perform due diligence before investing. In the case of lending platforms, it is advisable to research both the company and individuals behind the platform as well as the individuals to whom you would lend.

Private Equity Funding Platforms. There are a growing number of websites that allow investors to make equity investments in companies through the crowdfunding model. Examples include Crowdfund Mainstreet, Investibule, Wefunder, and Republic.

Both Crowdfund Mainstreet and Investibule focus on companies that are local and/or have social impact. The other sites do not have this filter. Before you make any investment, determine whether the company fits your values and investment goals. Investibule provides a wealth of information about crowdfunding on their website.

Crowdfund Capital Advisors. The co-founders of this research and advisory firm played an important role in the design and development of what became the 2012 JOBS Act. Their website is a treasure trove of information about crowdfunding: its growth potential, emerging regulations, and recent research. The site includes videos, webinars, podcast links, and a comprehensive list of active crowdsourcing sites.

Rich & Resilient Living. Laura Oldanie, a contributor to Activate Your Money, is using crowdfunding to invest in the types of businesses she cares about. She talks about her approach and her journey on this blog site.

Angel Investing

BOOKS

How I Became an Active Angel Investor by Mounir Laggoune. Although written with a European perspective, this short Medium article hits the most important points to consider before diving into angel investing.

Angel: How to Invest in Technology Startups – Timeless Advice form an Angel Investor who turned $100,000 int $100,000,000 by Jason Calacanis. Even if you are not planning to invest in technology startups, this book covers all the topics needed to understand angel investing and provides an actionable strategy you can use to get started.

Angel Investing: The GUST Guide to Making Money & Having Fun Investing in Startups by David Rose. This is another solid, comprehensive guide to angel investing. It provides insight into why you might want to invest this way, the financials behind angel investing, what to look for in a potential investment, steps in due diligence, understanding valuation, and investment rounds.

PODCASTS

Money for the Rest of Us, Episode 301: Use Caution with Alternative Investments. In this episode of the podcast, David Stein describes the five factors that he believes are most important for success with alternative investments like private investing. He offers both encouragement and caution to those considering investing in this asset class.

CHAPTER REFERENCES

Women-Led Angel Groups

The level of expertise and investment commitments vary from group to group. Some are more exclusive, while others (such as Golden Seeds) are more accessible. The number of funds, angel groups, and other women-focused networks in support of women entrepreneurs and investors is growing. A number of opportunities are included here.

Astia Angels. Astia Angels is a network of angel investors that support women-led, high-growth companies. All members are involved in the screening and due diligence processes.

Broadway Angels. Broadway Angels is an exclusive angel investment group that is made up of female business leaders and world-class investors. All the members are either General Partners in venture firms or Senior Executives in leading technology firms.

Golden Seeds. Golden Seeds is one of the largest angel networks in the country. They have chapters in Arizona, California. Georgia, Massachusetts, New Jersey, New York, and Texas. Contact them for their membership details.

Plum Alley. Plum Alley invests in advanced technology and healthcare companies. Investors can join as members and participate in syndicates. However, membership requires a fee of $2,500 per year and the ability to invest $100,000 per year to build a portfolio. Plum Alley is run by women, but the group invests in both female and male entrepreneurs.

An exhaustive list of the global support ecosystem for female investors and entrepreneurs can be found in this updated Medium article. The amount of information it provides is truly amazing! The article lists female-focused start-up accelerators, co-working hubs, angel networks, angel training programs, and more.

Learn by Doing Models

37 Angels. 37 Angels offers participants a training bootcamp and the opportunity to invest in one company at the end of the process.  

Next Wave Impact. Next Wave Impact was the founded by Alicia Robb, one of the contributors to Activate Your Money. The organization brought together 99 women as investors. Each woman contributed a minimum of $10,000 per year over a three-year period. Together they sourced and invested in approximately 15 socially minded businesses run primarily by women. Although the initial fund is closed, more opportunities to participate will become available in the future.

Pipeline Angels. Pipeline Angels trains women to become angel investors and focuses on early-stage, social-impact companies founded by women. Members pay $4,500 for a multi-month training and mentorship program. At the end of the training, members contribute an additional $5,000 each and co-invest in a start-up they have identified and researched together.

Portfolia. Portfolia launches small funds focused on topics that are of interest to women. Examples include FemTech and Active Aging. Minimum investment amounts for each fund are $10,000. Investees receive training and mentorship and can actively participate in due diligence and other aspects of the investment process.

Syndicates

If you are interested in joining a syndicate, you can search on AngelList or ask local angel groups if they provide syndication opportunities. A group of friends or colleagues interested in investing together can even set up their own syndicate. However, costs are associated with creating a legal structure, reporting, and ensuring regulatory compliance, so seeking legal advice is strongly advised.

500 Women’s Syndicate. As an example, 500 Women is a syndicate on AngelList. Members of AngelList who follow 500 Women are invited to participate in investment opportunities offered by the group. Individuals invest in only the deals that interest them and meet their investment criteria.

ADDITIONAL RESOURCES

Angel Associations

Angel Capital Association (ACA). The ACA is one of the best known and most respected membership organizations for angel investors. Membership is available to accredited investors for only $250 per year. The organization hosts an annual conference that attracts hundreds of angels. But what is most valuable – and freely available to non-members – is a treasure trove of research and information about angel investing. You can read educational materials, access virtual workshops, and even get answers to questions.

Training and Research

Seraf Compass. Seraf Compass is another amazing resource for both aspiring and experienced angel investors. The site provides tools, templates, and deep content on core topics related to private investing, including carrying out due diligence, understanding deal terms and exits, managing your portfolio, and so much more.

Impact Terms. Another extremely valuable free website, Impact Terms provides a curated library of terminology and information related to private investing. One of the most valuable parts of the site are the sample term sheets that can be found under the “Terms and Cases” tab.

Finding Deal Flow

There are a number of different sources that help find private investment opportunities (deal flow). A few are listed below. To really understand what deal flow is and how it works, we suggest reading one of the books mentioned earlier in this section.

Female Funders, which has an angel academy, provides a short write-up about angel investing, include a bit about finding deal flow.

AngelList. AngelList is one of the best-known networks for angel investors and start-up enterprises seeking money. Investors can identify areas of interest and be pinged about companies meeting these criteria. It also helps find like-minded angels, follow high-profile investors, and join syndicates. The site is free to join, but it is for accredited investors only.

InvestorFlow. InvestorFlow is another matchmaking site seeking to link social ventures with investors who are looking to make positive impact through their investments. While much smaller than AngelList, free sign up lets you browse through the investors and deals.

InvestorFlow requires investors to be accredited.

Activating your personal network is another great way to find private investment opportunities. By listing yourself as an angel investor on LinkedIn or other social media, you encourage enterprising start-ups to come directly to you.

Alternative Investment Structures

BOOKS

The Next Step for Investors: Revenue-Based Financing by Luni Libes. Luni is the founder of Fledge, InvestorFlow, and an angel accelerator. He has written a series of short, concise books for start-up founders. He also has this excellent, 90-page book on revenue-based financing, which is a fantastic resource for understanding this type of investing.

Raise Capital On Your Own Terms: How to Fund Your Business Without Selling Your Soul by Jenny Kassan. Although the book was written for female entrepreneurs trying to finance their business without venture capital, it is an interesting read for any investor who wants to support these types of companies. It offers a perspective on how investors think, as well as a range of alternative financing strategies. As a lawyer who helps female entrepreneurs structure the legal documents they need for these types of investments, Jenny knows this topic well. She is passionate about helping female founders achieve success. And she also is committed to helping investors (including those who are non-accredited) invest in businesses in their communities.

ADDITIONAL RESOURCES

Revenue-Based Lending Examples

Fledge. Fledge is a global network of conscious company accelerators and seed funds. It helps entrepreneurs create impactful companies and co-ops at scale through short, intense programs filled with education, guidance, and a massive amount of mentorship. The associated investment opportunities utilize revenue-based lending models.

Founder’s First Capital. Founder’s First Capital provides revenue-based financing to businesses founded and led by minorities, military veterans, or women that are generating between $250,000 and $5 million in annual revenues.

Kachuwa Impact Fund. Kachuwa is an unusual investment cooperative and public benefit corporation that is focused on owning and operating “impact real estate” and investing in privately held impact companies. Its funding models are as innovative as the overall business model. Learn more on their website.

Village Capital. Village Capital launched in 2009 to democratize entrepreneurship. Since that time, they have supported more than 3,000 entrepreneurs through very unconventional financing and assistance models.  

Zebras Unite. Zebras Unite is a movement that was started by four female social entrepreneurs as a result of the overwhelming response to their article Zebras Fix What Unicorns Break, a Medium post that criticized their inability to get venture capital funding for their enterprises. Now with more than 5,000 members, Zebras Unite is addressing the capital structures, community, and culture that social ventures need to succeed. They bring together fund managers who are using alternative investment strategies to support companies – often those started by women, people of color, and other underrepresented groups – that do not match the traditional private equity or venture capital models.

Private Investment Funds

CHAPTER REFERENCES

Private Debt Fund Examples

In addition to making loans directly to private companies, accredited investors also have the opportunity to invest in private debt through funds. These investments are often focused on lending to small businesses domestically and abroad. It is also possible to find debt funds that have a specific theme, such as affordable housing, solar power, or community development. Many of these opportunities require participation through a financial advisor. The following are a few examples that are appropriate for accredited investors who have financial advisors and who wish to diversify their portfolios beyond publicly available debt and equity options.

Community Investment Management (CIM). CIM is a “fund of funds,” which means the company borrows money from investors to on-lend to platforms that are funding small businesses in the United States. CIM partners with innovative lenders who demonstrate strong financial performance and a commitment to responsible, transparent, and borrower-centric lending practices. Many of the businesses funded by CIM’s partners are owned by women, minorities, or military veterans. Minimums are in the range of $100,000 or more.

TriLinc Global. TriLinc provides senior, secured debt to operating companies in Latin America, Southeast Asia, Sub Saharan Africa, and Emerging Europe. The small and medium-sized businesses (SMEs) that TriLinc supports are, for the most part, underserved or overlooked by traditional finance institutions. It is estimated that there is a $4.5 trillion funding gap for these types of businesses. TriLinc Global has provided more than $1.25 billion in loans to SMEs since 2013.

Private Equity Fund Examples

Accredited investors can also invest in private equity or venture capital funds. There are a wide range of socially responsible private equity investment opportunities that span across the Sustainable Development Goals. Below are two examples with women in leadership positions.

Elevar Equity. Two women and two men started Elevar in 2008. They came from four different countries and cultures: the Philippines, Mexico, India, and the United States. Elevar has launched four impact funds, the first of which invested in microfinance institutions providing loans to the underserved poor. Over time, their investment thesis has expanded to include companies that offered underserved communities access to other core financial products, such as small and medium enterprise loans, housing loans and payments, and services that help people live more fulfilling lives.

Urban Innovation Fund. The Urban Innovation Fund is a venture capital firm that invests in urban startups. Founded in 2016 by Clara Brenner and Julie Lein, the firm has the goal of providing pre-seed and seed funding to startups shaping the future of cities. About 70% of the startups in the Urban Innovation Fund have a woman or person of color on the founding team, and close to 80% have a woman or person of color on the board. The Urban Innovation Fund aims to be the largest deployer of capital for urban innovation startups, investing $250M+ over the next decade.

ADDITIONAL RESOURCES

Finding Private Debt and Private Equity Funds

ImpactAssets 50. ImpactAssets, a Donor Advised Fund that is described in Chapter 11, provides this annually updated list of 50 private debt and private equity managers that offer funds with impact themes. The list is selected to demonstrate a wide range of opportunities across geographies, sectors, and asset classes. Accessing the ImpactAssets50 is free and it is available to anyone.

Impact Investor Landscape. The Impact Investor Landscape is a search tool for investors who want to back impact companies. Get details on almost 80 values-aligned angel groups and impact funds. Search by sector, geography, lifecycle stage, SDG, investment size, and other criteria. The site explains how each fund works as well as the kinds of companies they back. The information on the site is useful both for impact investors looking for groups to join and for entrepreneurs looking for funding.

Project SAGE. Project SAGE was a massive undertaking designed to chronicle socially aligned private debt and private equity funds incorporating a gender lens. Now housed within the Social Impact Initiative at the Wharton School of Business, Project SAGE provides a wealth of information about gender-lens investing and highlights many investment opportunities.