Stephanie Hanbury-Brown is managing director of Golden Seeds, an angel investment network. Stephanie spent 20 years in financial services, primarily on Wall Street with J.P. Morgan, before leaving the corporate world to become an entrepreneur. She recently sat down with w2wlink.com to talk about angel investing, in general, and Golden Seeds, in particular.
w2wlink.com: Stephanie, what made you decide to leave the security of an established career in the corporate world to take on the challenge of entrepreneurship?
SHB: I always knew that I would have a second career and, in that career, I would do something to support women, though I didn’t always have a vision of what that would be.
w2wlink.com: What was your motivation to found an angel investment network?
SHB: I wanted to see more women owning and running their own companies or who have sustainable careers at the highest levels of other businesses. At the time I was considering this, in the late ‘90s, women had a difficult time cracking into the C Suites of the big companies. My vision was to take women who have already made it to the top and work with them to create a culture to help other women succeed.
w2wlink.com: For those of us who are not entrepreneurs, explain what exactly an angel investor is.
SHB: An angel investor is an individual who invests in fledgling companies. They are really professional investors, people who are looking for the best deals out there – companies that have the potential to bring a superior return on their investments. Angel investors are similar to venture capitalists. The difference is that angel investors work with companies in the early stages, and they usually invest fewer dollars in any one company, spreading their investments among more young businesses. Angel investors take big risks, so they need to invest in a portfolio of companies, several of which will probably need to go on to obtain venture capital further along the way.
w2wlink.com: What criteria does Golden Seeds use to determine which companies will benefit from their investment?
SHB: You really need to visit our Web site (
www.goldenseeds.com) for all that information. Our differentiating criteria are that the company must be led by a woman, and she must occupy a C-level position with significant equity in the company. Usually, she is the founder and CEO. Very few angel investors invest in women-owned companies.
Historically, it’s been very hard for women entrepreneurs to get funding. The truth is that not enough women entrepreneurs even ask.
w2wlink.com: Why is that?
SHB: There are various reasons. Some women want to build their business slowly and maintain full control. Her company may be in the service industry, which is not considered investable. It must have a product and it must have the potential of yielding 15 to 20 million in revenue in the next five years. These criteria eliminate a lot of women entrepreneurs. And then there are some who simply don’t think about funding outside of their personal investment and that of friends and family.
w2wlink.com: What kind of support does Golden Seeds offer?
SHB: We put one of our members on the board to help guide and build the company in any way they can. They bring with them the resources of the 115 other members of Golden Seeds. So the company gets the benefit of our network and our network’s network. These are high-powered people in the business world; they have experience and influential contacts.
w2wlink.com: What is the advantage of angel investors and venture capitalists over funds gained from personal fortune, friends and family?
SHB: These are all good sources of funding for the early stages of a company, and we encourage women to take advantage of all of her resources. Friends and family are investing in the person more than the business plan. They invest because they believe she has what it takes to succeed. Then we come in to fill the gap to get the company off the ground. It’s virtually impossible to get a bank loan to fund a start up. It’s just too risky. So you go to angel investors. Then when you’ve gotten it off the ground and shown some success, you can take it to venture capitalists for the funds to grow it.
w2wlink.com: What single piece of advice would you give a woman considering becoming an entrepreneur?
SHB: Make sure it’s something you’re really passionate about, because at times it will be really hard, and you will need that passion to drive you through.
Caren Elizabeth Austen,
brings more than 20 years' experience as both a writer and editor to w2wlink. With her company, Fit to Print, she has had opportunities to write and edit a variety of internal and external newsletters, including many for nationally recognized health care organizations. She has also written for and edited local and national magazines, including “Millionaire Blueprints” and Sam’s Club’s “Source” and worked with agencies on marketing and advertising copy.
