I first met Elizabeth Crowell when we were both invited to speak at an entrepreneurship series hosted by the Brooklyn Public Library. As a lead member of Astia Angels, a network of men and women who invest in women-led ventures, Elizabeth was speaking about raising angel funding. Then I found out she was also the owner of a charmingly curated antique and gift shop in my neighborhood, and co-chair of the local Business Improvement District to boot! It’s rare, to say the least, to find an angel investor that comfortably straddles the different worlds—and worldviews—of Main Street and high-growth startups. Now she has a new role to add to her resume: CEO of Bpeace, a nonprofit network of business volunteers who work with entrepreneurs in conflict-affected communities to scale their businesses, create significant employment for all and expand the economic power of women. It was my immense pleasure to talk to Elizabeth recently about angel investing.
Amy Cortese: How did you become an angel investor? You went through the Pipeline Fellowship, right?
Elizabeth Crowell: Yes. My own experience of being an entrepreneur was transformative. I saw the impact that I could have not only on my own life, but also in my community by creating jobs and a beloved local business. This motivated me to help others realized their dream of business ownership. Quite quickly, it became obvious that funding was a major roadblock to starting a business, so this is why I decided to focus on angel investing.
AC: What’s the typical deal profile for you?
EC: My first criteria is whether or not the business is women-led. By that I mean, I want to see at least one woman at the C-suite level with decision-making power and equity.
After that, I’m intrigued by all sorts of industries and ideas, so it really comes down to if I think the founders have what it takes to start and successfully grow their business.
Some industries where I have more than one investment include: organics, medical devices and big data/business technology and services. I make small, five-figure investments so that I can continue to invest in the follow-on rounds of my portfolio companies.
AC: What do you look for in an investment and in an entrepreneur?
EC: In terms of investment, I’m looking for an idea that capitalizes on an existing behavior, but tweaks it slightly into something better and more compelling. I look for a Total Addressable Market of $1 billion for consumer businesses and the potential to have thousands of customers for b-to-b businesses.
“The entrepreneur always trumps the idea.”
Entrepreneurs need to be results-driven leaders who know their strengths and know where they need support. I want to see fire and passion and a determination to make it work. The entrepreneur always trumps the idea. Savvy investors know that the business idea, model and/or strategy will most likely change. I look for entrepreneurs who can pivot and problem-solve.
AC: What are the unique challenges facing women entrepreneurs, and how can we address them?
EC: Women entrepreneurs face all the same hurdles as men—and then some. I know women entrepreneurs who have been hit on by potential investors and even asked questions such as their marital status or whether or not they have children. Men are not asked these questions.
We need more women investors and we also need more men to invest and women and convince their male friends why it makes good business sense. Astia is full of men like this who, by example, show that investing in women is not for charity but for results.
“Ask for money and you’ll get advice. Ask for advice and you’ll get money.”
AC: Any advice for entrepreneurs? Do’s or Don’ts?
EC: Ask for money and you’ll get advice. Ask for advice and you’ll get money. The truth is that investors want to invest in coachable founders. Obviously you can’t take everyone’s advice all the time, but listen for the patterns and try to proactively address concerns.
Regular reporting to your investors is the number one best way to keep investors in your corner and prime them for follow-on rounds. I am more interested in why you are achieving or not achieving your goals and numbers than the numbers themselves. Investors want to see your thinking – show it to them.
AC: What about for aspiring angel investors?
EC: Get training! Angel investing is a sport and you need to understand the rules and how the game is played. Seriously consider the Pipeline Fellowship since it combines classroom theory with the practice of making an investment, all within a supportive cohort format.
AC: You’re also the owner, with your husband, of what might be called a “lifestyle” business. What is the best source of funding for lifestyle businesses that don’t necessarily meet the criteria or target profile of angel investors?
EC: Bootstrapping and personal funds are the way most lifestyle businesses get launched. I recommend you develop an in-person relationship with your banker since bank credit and loans are the next best source for lifestyle businesses. A great resource is TheFundWell.com, a site that can help you determine your business’s financial health and direct you to appropriate funding and financing sources.
AC: And Fundwell is founded and run by a woman, right?
You can follow Elizabeth on Twitter at @egcrowell
Related: Read more about raising capital from Angels in our education section.