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SPREAD THE WEALTH
It may come as a surprise that money can engender connection. But whether it’s talking about money (hello, vulnerability) or putting your dollars where your passions are, even the tricky territory of giving, receiving, or talking about money, when used skillfully, can pave the way to greater closeness. First, by financially supporting businesses you care about, you can build meaningful connections. Whether it’s a small contribution to a crowdfunding site or a larger investment in a business, putting your money behind the organizations and people you want to support is a great way to build relationships in a truly meaningful way. You truly don’t need to have a large savings account to do this. Just 10 dollars to a crowdsourced campaign could connect you to an organization you may care about for life, and that can introduce you to fascinating people. Similarly, every frank and open conversation you’re willing to have about money is another way to engender depth, openness, and transparency in your business relationships, too. When we can have tough conversations about hard things, a feeling of closeness emerges, and talking about tricky subjects like money can facilitate deep connections. Whether you’re asking for money or offering to provide it, discussing how much you earn or how much you charge for your services, even the most skilled negotiators can trip up during conversations around money.
INVEST IN PEOPLE
Ten years ago, after the loss of both of my parents, I realized that I had some disposable income on my hands due to a modest inheritance as well as the class action lawsuit that occurred after the tragic death of my mother. Without kids to put through college, I realized that I could use this money to support the great work of women, elevate their voices, and help other organizations hoping to do the same. And as I’ve said all along: if you take action to support organizations that you care about, the relationships will happen organically. When you are surrounded by people with a common purpose and a shared set of values, those sparks will ignite. I spent many years, and still do, donating to nonprofit organizations and volunteering my time. But I soon realized that investing in female-founded businesses was another way to champion and support women, and to further advance the causes I cared about.
According to the Center for Venture Research, in 2016, only 26 percent of US angel investors were women, and only 5 percent were minorities.1 But in my research, I came across organizations like Golden Seeds, which is one of the largest and most active angel networks that focuses on women-led businesses and has invested over 120 million dollars in over 170 companies across a diverse range of industries. 37 Angels is also a community of female investors. Pipeline Angels is changing the face of angel investing and creating capital for women and nonbinary femme social entrepreneurs. I realized in my research that becoming an angel investor not only was a way to support causes that I passionately cared about, but would also create more jobs for women—a social good that I have always valued. When I spoke to Fran Hauser about her established career as an investor, she said that as a funder, it gave her a means through which to share her wisdom and expertise as a long-time media executive. When I started out investing, I set my criteria to fund only women entrepreneurs who have created an innovative product or service, and to focus on those who could benefit from the support of my network or advice in addition to my financial contribution.
In this way, the power of connecting continues. Over the years, I have been able to connect people in a synergistic way that helps these burgeoning businesses grow. Rather than just waiting for a check, I enjoy having a seat at the table to share my business knowledge, my community, and my experience. Even if I don’t earn a return on these investments—though that’s certainly one of the goals—these investments have provided returns to me in enormous ways by introducing me to people and allowing me to learn a great deal about a wide range of growing businesses. All have proven to be extraordinary opportunities. On paper, what I have given these female founders may have gone to fund hiring, technology platforms, or expansion into new markets. But if you were to ask any of the women that I’ve supported, my guess is that they would tell you that what they valued most about my involvement wasn’t the money, but the relationships that they developed through our connection.
HOW INVESTING WORKS
Angel investing is giving seed funding to early-stage startups before they are ready to raise venture capital money. It used to be a practice that was restricted to high-net-worth individuals, but since the passage of the Jumpstart Our Business Startups Act in 2012, it is now more accessible for investors wanting to make a smaller investment.2 The Jumpstart Our Business Startups Act was a law passed with the intention of encouraging funding for small businesses, by easing some of the security regulations in the United States. In 2015, the Securities and Exchange Commission also adopted the final rules allowing equity crowdfunding, known as the Crowdfund Act.3 Essentially, this law made it legal for startups to raise money in small chunks from a large number (i.e., the crowd) of nonaccredited investors. Since Pipeline Angels launched in April 2011, close to 400 members have graduated from their angel investing program and have invested more than $6 million in over 70 companies via their pitch summit process.
With such a low percentage of female angel investors, companies are missing out on benefiting from the unique skills that women bring to the table, such as inspiring collaboration between disparate groups and targeting the female consumer market. After all, women make 75 to 85 percent of all purchasing decisions, and their impact on the global economy is growing exponentially.4 It only makes sense that more female investors as well as investors of color need to be brought to the table and into the conversation to facilitate change.
BENEFITS OF ANGELS
As I dug in, I learned that females and minorities are drastically underrepresented in funding. Not only are there few female and minority investors, but only a small amount of the funding goes to them as well. Only about 2 percent of venture capital goes to women.5 And if you even peel that back more, far less goes to women of color. I started thinking: Wait, I could do both, right? Investing gets you a seat at the table and gives you an opportunity to learn about a new industry that maybe you weren’t familiar with.
IFundWomen is a startup funding platform providing access to capital through crowdfunding and grants, as well as offering a network for support and expert business coaching. Women are starting new businesses at a rate of almost five times greater than the national average. However, females struggle to land funding capital without going into debt. Only 1 percent of all startup businesses will receive funding—regardless of founder’s gender or race. So it’s a daunting challenge to begin with that is made only more challenging for women and founders of color. What differentiates IFundWomen is its proprietary coaching program, the IFundwomen method, which supports women by offering capital, connections, and coaching—three key elements in startup launch that are needed today.
DISPEL AWKWARDNESS AROUND MONEY
Another important element in the conversation about money and relationships is this idea that what we earn defines our identity. We need to drop some of the stories about self-worth that surround money and instead—we need to start sharing what we are paid in our communities with friends and colleagues to ensure transparency and support across industries. As much as you can, proactively bring people together in your network to have conversations around money. Linda Davis Taylor is the former CEO and chairman of Clifford Swan Investment Counselors in Pasadena, California. She currently writes for Worth magazine, and a longtime advocate for women’s financial independence and frequently speaks on the topics of wealth and philanthropy. As one of our clients at McPherson Strategies we helped Linda create Money Talks, which is like a sewing circle or book club gathering to talk about money, and most recently a podcast called Money Stories with LDT, which expands on this idea. Instead of playing mahjong or bridge, Money Talks bring people together to talk about what you’re paid and how to advocate for more, which is helping bring transparency to an area often defined by secrets. Hosting a Money Talk is an opportunity to convene the knowledge and experience of your network. It can also create a system of accountability as we individually set out to reach our own personal finance goals. Bring the power of connection into our financial lives and build our confidence and competence as a community—it can be as small as two people.
Here are some jumping-off points for kickstarting a conversation about money. Like the relationship-deepening questions we discussed earlier, these are also great questions to add to your conversational toolkit to spark deeper and more meaningful discussions in your daily life:
• How did you learn about money growing up?
• What do you think society tells women (or doesn’t tell women) about financial planning?
• When did you start to feel confident in managing your own personal finances?
• What was the most valuable money lesson you learned from a parent or guardian?
• When you envision having “enough” money to live, what is that vision?
• What is your personal reaction to the concept of wealth and growing your money?
• What is your approach to savings?
• What is your perspective on charitable giving? Your perspective on investing?
• Do you have a “rainy-day” fund? Emergency fund?
• What is your approach to debt?
• What are your feelings toward “splurging”?
HOW TO ASK FOR IT
Let’s say you’re getting a new business off the ground. How do you ask for funding? Let’s first ask why you need the funding. Now there are these great vehicles, whether it’s Kickstarter or iFundWomen.com where you can raise that first 20, or 30, or 40,000 dollars. Yes, it’s hard work. Don’t get me wrong. But that could get you to a place where you would have some cushion to bring on a programmer or a consultant to create your websites and your collateral. When you have deep, meaningful relationships, it’s a lot easier to generate support if you’ve already built the types of relationships you will need to fund your company. Any kind of campaign on a platform like iFundWomen could be so much more successful if you have already put the time and energy into building meaningful relationships.
BEYOND INVESTING
While writing her book The Myth of the Nice Girl, Fran Hauser created what she calls the Nice Girl Army. This is a group of women Hauser had previously mentored and she gathered them together to amplify the message of her book. These gatherings grew into mentoring, networking sessions, parties, and workshops. This is a great example of how what can start as an investment relationship can turn into something much more—these women came to the groups to meet Fran, but they ended up meeting each other and developing relationships in a more streamlined but also incredibly effective way, in groups of six to eight people rather than one-on-one. In that way, the investor and investee or even mentor and mentee relationship can expand, grow, and evolve outside the bounds of what you “expected” the form of that relationship might take. It’s also a great example of how what seems like the best scenario for a relationship (one-on-one) might not actually be the best. Stay open to all of the possibilities of what can happen when you invest in and with people and causes you care about.