Troy Knauss speaking to a group of entrepreneurs and investors in Florida.
Troy Knauss concludes an Angel Resource Institute workshop in Greensboro, North Carolina to an audience of local investors and entrepreneurs.
As an accredited investor, Troy Knauss has built a diverse portfolio of angel-only backed deals with some successes, a few failures, and a whole lot of opportunities. In addition to these deals, Knauss has spent time growing companies and volunteering on boards that benefit the entrepreneurial ecosystem. His recent boards include Vice Chairman of the Angel Resource Institute, a spinout of the Kauffman Foundation, the Greensboro Partnership’s Entrepreneurship Connection, The Launch Place, and Wake Forest University’s Advisory Council for the Center of Entrepreneurship. According to Knauss, “There is no greater reward than helping a fellow entrepreneur realize his/her dream. It doesn’t matter if that dream is to simply start a company to build an income or to grow a high-value business with the ability to create major wealth creation when it is sold.” Knauss expects to continue to invest in 4-5 deals per year.
One of his latest ventures is E&I Risk, an insurance company that offers affordable and complete policies to early-stage and startup companies. According to Knauss, “Most insurance agencies don’t understand the inherent risks of a startup and, given that many startups don’t have significant revenue, many insurance agents aren’t willing to put in the time and effort for a low-priced policy. That’s where E&I Risk enters the field. E&I can provide very competitive quotes that include comprehensive coverage needed to protect entrepreneurs and their investors.” Check out E&I Risk. Click here for a quick quote on a Directors & Officers insurance (D&O) policy.
If you are interested in meeting with Troy to discuss your current business or opportunity, visit www.troyknauss.com.
This week, the Department of Commerce reported that theU.S. economy grew at its slowest pace in two yearsin the first quarter of 2016.
Our gross domestic product only grew by a 0.5 percent rate – an anemic level that will not generate and sustain the type of job and wage growth we so desperately need. This comes on the heels of a newGeorge Mason University study on the cumulative burden of regulations on our economy, which found that this they impose costs of over $4 trillion on the nation.
At a time when our economy is struggling, Congress must do everything possible to help small businesses achieve success, including startup companies and entrepreneurs. These entities are our nation’s most dynamic job creators, and their success is essential to bringing new and better-paying jobs to our communities. Facilitating capital formation is one vital component of the strategy to invigorate small business growth.
Earlier this year, Charlottesville was recognized as one of the nation’s fastest growing markets for venture capital investment as the amount of capital invested inCharlottesville has grown 157percentin the last five years. This type of investment can have a profound impact on a community, making it more attractive to other start-up companies and ultimately producing greater job growth.
In 2014 alone,angel investors deployed over $24 billion to over 73,000 startupsacross the country, withmany of these investments going to companies in their communities and states. Beyond capital, angels provide advice and guidance to help these companies succeed and create jobs.
We need policies that encourage, not discourage, this type of economic activity. I was pleased to see the House of Representatives take a step this past week to alleviate burdens placed on these dynamic job creators inapproving the HALOS Act– a bill I was proud to help author.
This bill is a simple, bipartisan, bicameral solution that will ensure that investors and companies can continue their interaction and work toward new projects, investments, and jobs. The HALOS Act amends and clarifies securities laws relating to angel investing written within the JOBS ACT of 2012 so that startup enterprises are able to continue to promote their business at certain events, where there is no direct investment offering.
Startup companies rely on “demo days” and similar events to build relationships with angels and other investors and generate interest in their company. But the SEC has put forth rules that make it much harder to conduct these events, discouraging the potential economic activity that comes with them.
At a time when Virginia’s Fifth District continues to face unacceptably high unemployment rates, I remain committed to removing overregulation of small businesses as a barrier to job creation.
We need more pro-growth policies like the HALOS Act if we want to end the economic stagnation we are facing and bring more dynamic job growth to our communities. I look forward to working with our colleagues across the Capitol to get the bill through the Senate and on to President Barrack Obama’s desk.
Funding is an essential part of starting and growing a business. The lack of it can stop an idea from becoming a product or service dead in its tracks. Even companies that have raised $1.3 million have failed before their second year, according to the most recent analysis by CB Insights. The fact that venture capital funding got even more scarce at the end of 2015, is a challenge to startups, particularly to those owned by women.
The National Women’s Business Council (NWBC) found that male founders start with twice as much capital on average as their female counterparts, and women-owned business are much less likely to get loans from banks or the Small Business Association. Snagging venture funding is equally difficult, in part because only 6% of VCs are women, according to Babson College’s Diana Report. Only 0.2% of black female founders, for example, received VC funding between 2012 to 2014, according to a study by digitalundivided.
One organization is attempting to equalize those numbers on a global scale. Angel Labs a San Francisco-based investor accelerator for individuals and executives worldwide is particularly focused on diversity and inclusiveness in tech investing. Getting more women investors can make meaningful change for women-owned businesses all over the world.
As a female investment banker, Angel Labs executive director Tugce Erul understands the problem inherent in this firsthand. She tells Fast Company that one major stumbling block is that there are usually two ways to break into venture capital: Either have a background in investment banking or financial consulting or have a successful exit as an entrepreneur.
“Both of these pools have very few women to begin with,” she says, “There are fewer female-founded companies, which means fewer women have the money to recycle back into startups.” Ergul also notes that dealmaking is common among friends. “These circles have traditionally been male,” she explains, “so it can be a little harder for women to break into deals as they’re happening.”
Ergul says that as a U.S.-based organization, it is easier for Angel Labs to make a difference in the States. However, she reports that as the programs have gained traction, they’ve added 68 cities in 41 countries and amassed a community of 6,000 people globally. Over 4,000 have become angel investors, VCs, or limited partners. What’s more striking is that the overall community is 47% female and 44% of the people who went through the programs are women. Of the 41 chapter managers, 18 are women, 11 of whom are Latina. However Ergul reports that black investors only make up 8% of the total number.
She notes that Angel Labs isn’t currently tracking LGBT numbers, in part because of cultural pressures in some of the countries the organization operates in. Ergul does say that its diaspora programs and “Diversity and Inclusion Breakfast/Dinner Series” are some of the most successful ways to recruit investors of diverse backgrounds.
Last year, Ergul says that Angel Labs was aiming for at least 30% female representation at its events in emerging markets where women were not traditionally involved in entrepreneurship or investing. She was surprised when the audience at an event in Qatar was at least half women.
She’s confident that the exposure to opportunities will set more women on the path toward becoming investors. Ergul points out that successful angel investing is a great way to prove yourself. “You have your own deal flow and you can show the results of how you make decisions,” she explains. Once others can see an investor’s thought process and how they structure these deals it gives them a leg up. “We don’t want anyone to ask permission [to become an investor], just do it and prove you are good at it,” she maintains.
Tania Marinich is currently making this happen for herself and her country. As Angel Labs chapter lead in Belarus as well as the founder and CEO of Imaguru, the country’s first startup hub and coding academy in Minsk, Marinich tells Fast Company that she’s also building the first Business Angels Network and facilitating access to capital for startups.
“It is absolutely a hands-on experience coming from a reputable, global network which is truly hard to get when you just start building the ecosystem,” Marinich says, adding that she hopes the work with Angel Labs will lead to building capacity for the creation of the first venture fund in Belarus.
Marinich and her female cohort face similar challenges as most investors in the country have private equity and banking investment background and are predominately men. “I am very familiar with it having worked for eight years for International Finance Corporation,” she says.
Women’s entrepreneurship is still less widespread than men’s in Belarus, she reports, as only a quarter of companies have a female executive. Still, she’s optimistic that despite women’s under-representation in angel groups globally, things can change quickly, at least in Belarus. “As investors and board advisors, women bring a different set of experiences and business connections to the table which help diversify resources available to entrepreneurs,” she says.
Although she says it’s hard to say how many businesses have started in Belarus and how many of those have been either funded or started by women, Marinich says is that the pre-accelerator TechMinsk based at Imaguru’s Startup Hub produced 170 startups in the last three years. Twenty-nine percent of these were founded by women, she says, and of the estimated 3,000 founders who participated at all Imaguru activities including training programs, study tours, and conferences, 26% are women.
Ergul says the biggest problem Angel Labs is hoping to solve isn’t just that they want to be a source of amazing investors, but to get more women and minorities in the game. “We want to focus on pipeline problem,” she says, “And make sure women feel like they can have access.”
This is taking hold in Belarus and reverberating across Eastern Europe. Says Marinich: “I and my cofounder Anastasiya, in cooperation with Angel Labs, are leading the game in the country.”
(From left) MDV chairman Tan Sri Zarinah Anwar, Treasury Secretary-General Tan Sri Dr Mohd Irwan Serigar Abdullah, MDV managing director and CEO Datuk Zubir Ansori Yahaya and MDV non-executive director Datuk Noripah Kamso at the launch of ‘Elevate’ in Kuala Lumpur yesterday. Pic by Surianie Mohd Hanif/ NST
Wholly-owned subsidiary of the Ministry of Finance, Malaysia Debt Ventures (MDV), has launched a 12-month nurturing program, “ELEVATE”, that will observe MDV mentoring and coaching 20 companies with the objectives of strengthening financial and project management capabilities as part of its Corporate Entrepreneurship Responsibility exercise.
The programme was officiated by Treasury Secretary-General Tan Sri Dr. Mohd Irwan Serigar Abdullah together with MDV Chairman Tan Sri Zarinah Anwar and Managing Director/ Chief Executive Officer Datuk Zubir Ansori Yahaya.
Through Elevate, 20 companies will be selected from around 8000 existing technology-based young companies to be groomed, mentored and coached in the current entrepreneurship community in Malaysia within a 12-month timeframe with the goal to increase their ability to secure financing either from MDV or other financial institutions through improving their financial and project management capabilities.
Selected companies are expected to enjoy benefits from MDV’s extensive resources by gaining experienced skillsets, market access and links to key industry participants and partners in community as well as seeing the widening coverage and accessibility to MDV and its partner agencies through exchange of documents and resources.
“The Elevate Programme is not meant to compete with other existing nurturing and coaching programmes, but rather to complement the entire entrepreneur funding ecosystem,” Tan Sri Zarinah Anwar spoke during the launch today.
“Our unique value proposition is that we will apply our credit infrastructure to access candidates, identify gaps and develop measures to strengthen key areas of credit management and financial capabilities. We will use our own combined years of experience in the business to elevate the credit quality of the selected companies.”
Financial assistance in the form of subsidised legal and documentation fees will also be provided through this program.
“In addition, Elevate will also provide a pre-approved financing facility up to RM2 million to the top graduates of the programmed. This funding will enable these promising technopreneurs to implement their business plans and achieve their corporate objectives and goals,” she further added.
Eligible and interested companies that wish to enrol in this programme will have to go through two levels of assessments by MDV: a desktop assessment based on MDV’s proprietary credit scoring framework and a pitching session to MDV’s senior management.
MDV, through Elevate also intends to extend its assistance to other applicants by providing them with advisory services and access to MDV’s ecosystem or partners and industry players.
This week, the Department of Commerce reported that the U.S. economy grew at its slowest pace in two years in the first quarter of 2016. Our gross domestic product only grew by a 0.5 percent rate – an anemic level that will not generate and sustain the type of job and wage growth we so desperately need. This comes on the heels of a new George Mason University study on the cumulative burden of regulations on our economy, which found that this they impose costs of over $4 trillion on the nation.
At a time when our economy is struggling, congress must do everything possible to help small businesses achieve success, including startup companies and entrepreneurs. These entities are our nation’s most dynamic job creators, and their success is essential to bringing new and better-paying jobs to our communities. Facilitating capital formation is one vital component of the strategy to invigorate small business growth.
Earlier this year, Charlottesville was recognized as one of the nation’s fastest growing markets for venture capital investment as the amount of capital invested in Charlottesville has grown 157% in the last five years. This type of investment can have a profound impact on a community, making it more attractive to other start-up companies and ultimately producing greater job growth. In 2014 alone, angel investors deployed over $24 billion to over 73,000 startups across the country, with many of these investments going to companies in their communities and states. Beyond capital, angels provide advice and guidance to help these companies succeed and create jobs.
We need policies that encourage, not discourage, this type of economic activity. I was pleased to see the House of Representatives take a step this past week to alleviate burdens placed on these dynamic job creators in approving the HALOS Act – a bill I was proud to help author. This bill is a simple, bipartisan, bicameral solution that will ensure that investors and companies can continue their interaction and work toward new projects, investments, and jobs. The HALOS Act amends and clarifies securities laws relating to angel investing written within the JOBS ACT of 2012 so that startup enterprises are able to continue to promote their business at certain events, where there is no direct investment offering. Startup companies rely on “demo days” and similar events to build relationships with angels and other investors and generate interest in their company. But the SEC has put forth rules that make it much harder to conduct these events, discouraging the potential economic activity that comes with them.
At a time when Virginia’s Fifth District continues to face unacceptably high unemployment rates, I remain committed to removing overregulation of small businesses as a barrier to job creation. We need more pro-growth policies like the HALOS Act if we want to end the economic stagnation we are facing and bring more dynamic job growth to our communities. I look forward to working with our colleagues across the capitol to get the bill through the senate and on to the president’s desk.
If you need any additional information or if we may be of assistance to you, please visit my website at hurt.house.gov or call my Washington office: 202-225-4711, Charlottesville office: 434-973-9631, Danville office: 434-791-2596, or Farmville office: 434-395-0120.
Shortly thereafter, they invested in the FM Angel Investment Fund, and I was excited to see UND and North Dakota State University alumni working together to make North Dakota better.
That excitement sometimes has waned as it has been a difficult journey for angel funds in North Dakota. Granted, these are high-risk investments. About a month ago, I was asked to testify at our state Capitol regarding angel funds, and at my own expense, I did so.
What a disappointing day. They told us they want “transparency,” yet they have not asked for anything until now. They are also leaning toward following Minnesota on an incentive plan; why would we follow anyone?
We can provide a great deal of information; all they need to do is ask. I was told before I testified that that the situation was political; I wondered to myself how that could be.
After all, the angel funds have attracted out-of-state investment, helped many in-state and out-of-state companies and raised millions. I hope and believe there will be some successes, and the state will be able to tax the individuals on the income side of the successes.
I learned after testifying that it was indeed political. In fact, a member of the Legislature’s interim Political Subdivisions Taxation Committee (key word: “interim”) was shut out of the committee’s main discussions.
We have a great state—but I am not impressed with our leadership over the past few years. It is time for North Dakota to be a lean, mean economic machine.
Thank you, Doug Burgum, Republican candidate for governor, for risking your own money in many North Dakota endeavors.
Kenville is an entrepreneur and chairs the Valley Angel Fund.
The Entrepreneur Insiders network is an online community where the most thoughtful and influential people in America’s startup scene contribute answers to timely questions about entrepreneurship and careers. Today’s answer to the question “What’s the best way for young startup owners to develop relationships with angel investors?” is written by Jodi Goldstein, managing director of Harvard Innovation Labs.
The ever-growing number of AngelList done deals can make it look like getting funded is about as easy as applying for a job on LinkedIn: Post your startup’s profile, do some research on the best angel investors for a particular industry, send a few personalized notes to the right investors, and let the money come pouring in.
Securing an early-stage investment is rarely this straightforward. While young founders looking for initial funds should certainly have a presence on sites like AngelList, this is by no means a silver bullet for getting to know angel investors.
The entrepreneurs who are most successful in developing angel connections complement their robust online presence with a series of in-person actions that are focused on not only expanding professional networks, but getting their networks truly excited about the venture. For young startup owners looking to build relationships with angel investors, here are a few of the most important steps I’d suggest taking:
Never be in stealth
While there are extremely rare cases where keeping quiet about your startup might make sense, don’t kid yourself that your idea is so unique and novel that you can’t tell anyone about it.
Share your idea with as many people as you can, as often as you can. When you’re developing your idea, tell your friends and family about it, and go to relevant industry networking events to pitch your idea to anyone who’s willing to listen. If you’re at a point where you have a minimum viable product and can present at a local meetup, go for it.
Don’t wait until you need to raise money to start networking. Building a strong network of potential mentors, customers, and investors before trying to raise puts you in a much better position to connect with the right investors when the time comes.
Turn your existing contacts into promoters
When you are looking for angel investors, take the time to send customized notes to everyone in your network—friends, family, past colleagues, and people you’ve met at networking events—letting them know that you’re raising money. Ideally, these are people who you’ve told about your startup and are genuinely excited about what you’re building.
While the vast majority of your contacts won’t be investors themselves, some might have connections to investors you don’t know about. When you have a large group of people who believe in you and are aware that you’re raising money, you’ll find that a few will make introductions to people who could be willing to invest.
When meeting angels, make clear that you don’t just want a transactional relationship
Young founders often view interactions with angel investors as purely transactional. They think they’ll have one pitch meeting, get a little cash to get going, and send occasional business updates via email.
As your earliest backers, you need to view your angel investors as true partners in your business. With this in mind, you might not even want to talk about money the first time you meet an angel, but instead get to know the person you’re speaking with. You can also say in this initial meeting that you’re looking for investors who believe in what you’re doing, and can help guide you in developing your product or service.
Remember that when you’re raising an angel round, it’s impossible to predict whether your business will succeed. Angel investing boils down to people investing in people, which is why it’s so important to focus on building a relationship with investors before discussing financials.
Canberra doesn’t typically get mentioned among Australia’s hippest startup centers. The bulk of tech is in Sydney and Melbourne, followed then Perth along with some representation from Brisbane and Adelaide. But now it seems like the Australian Capital Territory is playing catch up and getting its feet firmly planted on digital ground.
The Griffin Accelerator may be an indication of some of that progress. Having just closed the application process for its third cycle last week, Griffin is the most established resource center for startups in the Australian capital.
“A couple of the other founders came up with the initial idea. There are a lot of good things happening in Canberra,” Craig Davis, co-founder at Griffin, tells Geektime. His foray into entrepreneurship started thanks to an online business his wife launched. That slowly pulled him away from his educational background in physics and propulsion and their success eventually led him to be one of the leaders of Canberra’s angel community. He is now the director two years running for Canberra’s Capital Angels.
“I think Canberra is in a long-term transition away from being exclusively government (B2G). There is a dynamic public sector based on smart people from four high-quality universities. There’s always more you can do but actually I’m pretty excited by the progress.”
Eyes to the sky and digital government
Indeed, Canberra is trying to diversify its local economy. Government services are a clear winner here, and some companies would be hard-pressed to have their first or primary office located in another city if that’s their business. The city is focusing on a few industries: space and satellites; defense and security; digital economy and e-government; health and sports science; and tourism infrastructure.
Municipal trade promo arm Invest Canberra promises virtually all Australian citizen services will be digitized by 2017 and also boasts the city has 13,500 jobs in digital solutions and e-government. Twenty-five percent of national government expenditure in digitizing public services is in companies within the capital according to the city’s trade promotional arm Invest Canberra.
A small tech scene with a capital vibe
Once a month, the city’s tech scene lights up with First Wednesday Connect. Some 200 people typically show up, claims Davis, but there isn’t much traffic from other accelerators. Why? Well, Griffin is the only one. Specifically startup-oriented resources are still scarce. Griffin is flanked by the Kiln Incubator, the Lighthouse Business Innovation Centre, CBR Innovation Network and EntrepreneurshipUC.
“There’s been a fairly active angel investing team in Canberra for 10 years actually, as well as a couple quite well-established boutique VC funds.” Those schools Davis mentioned earlier include National ICT Australia (NICTA), the University of Canberra, the University of New South Wales and Australian National University (ANU). ANU itself is a prolific investor with both ANU Connect Ventures and the Discovery Translation Fund active in the community.
The city’s priorities aren’t the accelerator’s, however.
Davis would love to go back to his roots and get more space-oriented companies into the fold, which dovetails with the city’s priorities.
Adelaide hosts the 2017 International Astronautical Congress, making it a good time to get in on that scene. But if you didn’t notice, these aren’t all startups relying on hi-tech algorithms and the latest cyber security solutions. The accelerator is not willing to prioritize any industry over another at this point. Who passes muster at Griffin depends on the merits of the applicants and their potential for success.
“We looked at some verticals and have particularly strong areas, like B2G and the sport industry with the Australia Institute of Sport in Canberra. My view is it’s better off focusing on the stage and the business value added.”
Sydney and Melbourne’s venture capitalists make it out to Canberra more often than you realize
Canberra Civic viewed from Mount Ainslie with Lake Burley Griffin and Mount Stromlo in the background. (CC BY SA 3.0 Bidgee via Wikimedia Commons)
The new accelerator cycle will add between five and eight new companies to its 11 alumni, but the indefinite number owes to the decision resting with the investors and mentors themselves on who gets in. It is still a small ecosystem, and the challenge is finding companies that are going to be worth the time and money.
Each participant that makes it in will receive AU $25,000 at the cost of the accelerator taking 10% equity in each company.
In a city of 400,000, it is picking up on a lot of the same advantages that Washington D.C. has for its businesses: plentiful traffic from investors and people connected to the government. He says there are two main things to keep in mind that give Canberrans an unusual point of strength for such a small ecosystem (and small city in general). Firstly, a lot of investors come through Canberra for other purposes, usually government business. Secondly, when there’s a quality deal, those investors will go out of their way to invest.
“It’s slightly controversial, but if you look at the numbers, the capital amounts in Australia are pretty low. I’m really focused on developing the best deals and that’s a harder challenge than finding capital.”
Why is that significant? Australia overall is a small ecosystem, so VCs are on the prowl across the country.
“I think the high-quality startups are attracting enough funding and some of that is coming from here in Canberra. It’s probably more often we take them to the investors in Sydney or Melbourne,” than we invite the investors here, Davis iterates.
That excitement has sometimes waned as it has been a difficult journey for angel funds in North
Dakota. Granted, these are high-risk investments. About a month ago, I was asked to testify at our state capital regarding angel funds, and at my own expense, I did so. What a disappointing day. They told us they want “transparency”, yet they have not asked for anything until now. They are also leaning toward following Minnesota on incentive plan. Why would we follow anyone?
We can provide a great deal of information; all they need to do is ask.
I was told before I testified that that the situation was political; I wondered to myself how that could be. After all, the angel funds have attracted out of state investment, helped many in state and out of state companies, raised millions, and hopefully will be some successes and the state will be able to tax the individuals on the income side of the successes.
I learned after testifying that it was indeed political. In fact, a member of the Legislature’s interim
Political Subdivisions Taxation Committee (key word, “interim”) was shut out of the committee’s main discussions.
We have a great state. However, I am not impressed with our leadership over the last few years. It is time for North Dakota to be a lean, mean economic machine. Thank you, Doug Burgum, for risking your personal money in many North Dakota endeavors.
(Bloomberg) — The Bloomberg Advantage with Carol Massar and Cory Johnson.
GUESTS: Michelle Kaske Puerto Rico Reporter Bloomberg News Discussing news that Puerto Rico will default on a $422 million bond payment for its Government Development Bank, escalating the pressure on investors to negotiate a broad debt restructuring and on Congress to act on legislation to help lessen the island’s financial crisis.
Dawna Paton Managing Director / Partner Aceso Innovation Partners LLC Discussing angel investing with Bloomberg contributor Woody Benson.
The rise of the tech industry in the Seattle region over the past two decades has been a remarkable driver of economic growth, but that growth is also weighing on the region in the form of more traffic, skyrocketing housing costs and a growing wage gap. That’s the backdrop as Carol Rava takes the helm of the Technology Alliance, a trade association that advocates for the tech industry across the state.
Rava joined us on the latest GeekWire podcast and KIRO Radio show to talk about the key issues in the industry and the region, and her goals in the position, in advance of the Technology Alliance’s annual State of Technology luncheon today in downtown Seattle. Listen to the discussion starting in the second segment below, and continue reading for edited excerpts from the interview.
John Cook: … 20 years. She was a standby there in the organization. She helped start it really.
Carol Rava: Stepping into Susannah’s shoes is a great honor and certainly one that I take seriously. She led the organization from the beginning for the last 20 years. I’m excited, though, to step in. My background is mostly in education and education policy. Most recently, I was working at and helped to start an education technology startup, nonprofit organization called Get Schooled, which is a digital platform that engages low-income teens on their path through high school and on to college. It’s really like MTV meets the College Board, a lot of sizzle and a little bit of substance, but it takes the best of business technology, recommendation engines, gamification, and applies it to K-12 education and some of the biggest problems that we have in K-12 education around youth engagement. That was a lot of fun and got me excited about the role of technology and the applications in different fields.
JC: What is it about the Technology Alliance that attracted you?
Carol Rava: Well, I think it’s a combination. I certainly was familiar with the history and had worked with Susannah in the past. When I was at the Bill and Melinda Gates Foundation, I had an opportunity to work with the Technology Alliance, so I was familiar with what they had done. I saw this opportunity as a good pivot time to look at the tech sector in Washington state, look at what innovation has driven, and help lead the organization for the next however many years.
JC: Where are we in your view? When Susannah started at the Technology Alliance, the tech community here was just coming into its own. Now, it’s a robust engine. It’s really part of Seattle’s DNA in many ways. Twenty years ago, you’d look at Seattle as a Boeing town and Microsoft was here, but now it’s this really vibrant technology community. How do you see the Seattle community and where it’s headed?
Carol Rava: One of thethings that has struck me is that I don’t think there’s any company on the cutting edge today that isn’t a technology company.
Whether you’re Nordstrom and you’re a retailer or you’re Starbucks, Weyerhaeuser, traditional companies, Costco, that we think of in the greater Puget Sound, they’re all driven by technology, and their growth and advancements are coming from how they use technology. One of the things I think about is, how do we define what the opportunities are for this region and for this state from a tech-driven economy across different sectors? That’s something that really interests me. Looking beyond Puget Sound, too, into Eastern Washington, agriculture and energy — what we see over in Eastern Washington in both of those fields I think is really interesting.
I think the technology community in the last few years has kind of gotten a bad rap by some in the community. I think those who work in the industry, us included, see it as this driver of innovation and this creative change and bringing in great jobs, but there’s a component of Seattle and Washington state that sees this industry as problematic, driving up housing prices, making the transportation infrastructure here clogged.
TB: Putting these weird orbs right on the northern edge of downtown Seattle.
JC: Yes, the Amazon biospheres. Not everybody’s adjusting to the change. What role do you think you play in making sure that the entire community embraces and is open to the positive change that comes with a vibrant tech ecosystem?
Carol Rava: That’s a great question because I actually think that’s exactly where the Technology Alliance can add value in the future. I think in the past, particularly when the Technology Alliance started in 1996, the role was more to daylight what the technology economy was looking like.
Who are these companies, what are they doing, what do they need, and now I think it’s more about talking about, what is the impact, what is the societal good — not just the economic impact but what’s the societal good that is coming from this technology-driven economy, and what are the opportunities not just in the companies but what the ecosystems that get built around them so that not everybody needs to be a computer science major and go to be an engineer at Amazon, that there are a ton of opportunities that are being created by this tech-driven economy and there’s a whole range of levels of skills and opportunities that both sit within these companies and in the ecosystem, almost like the supplier ecosystem, that gets built around them.
Investing in startups in the region
JC: A part of the Technology Alliance that many people may not know about was that it started the Alliance of Angels, which is a network of angel investors, and really identifying a problem many years ago that there’s been a shortage of capital here in the Pacific Northwest as it relates to funding startup companies. The Alliance of Angels has been really filling an important gap there, but many would argue it hasn’t done quite enough. What are your views just on fostering more capital formation here for startup companies and really building up the entrepreneurial ecosystem as part of the Technology Alliance’s mission? Because I know that’s part of what you spend a lot of time thinking about.
Carol Rava: Yeah, absolutely. I think the Technology Alliance historically has really focused its work on three pillars that are seen as fundamental to any successful innovation, tech-driven economy: entrepreneurship and support of entrepreneurial climate, education, both K-12 and at the university level, and research capacity. I think on the entrepreneurship, as you mentioned, one of the early things the Tech Alliance did was identify, wow, there was a gap, there wasn’t a really great angel community in Seattle, this is in the mid-90s to the late-90s, and so created the Alliance of Angels, which then became its own entity.
As you mentioned, it’s really filled an ongoing need here. Not even from the Tech Alliance standpoint but when you look at the VC and angel funding in Seattle, I think there’s still a need for more local funders and local funding groups.
JC: Yeah, it’s a real oddity in the Northwest. Having covered the venture capital beat and the startup beat here for a number of years, foras much wealth as has been created in the Seattle tech community, not as much of that gets funneled back into the startup ecosystem, and it’s a real mystery. People I meet in the entrepreneurial community are always talking about this and looking at ways that more of that money could be recycled back into the community.
Carol Rava: In conversations I’ve had just in my first month at the helm at the Tech Alliance, trying to understand why it’s important to have the money, at least a big bulk of it, come locally instead of from New York or from the Bay Area, (one reason) is that there is a whole network of connections and support that you get when the money’s in your backyard, so you don’t just get the cash infusion but you get connections to potential board members or a new CTO or CFO because they open their Rolodex and it’s a local Rolodex, in addition to the national contacts, and then the growth of the local companies begets more of the talent, and other entrepreneurs spring from that.
TB: Why aren’t more people who make money here spending their money in investing in tech companies?
JC: Gosh, I’ve a bunch of theories on that. One of them I think is that we haven’t seen as much turnover in the bigger tech companies here. A great example is a company like Concur or a company like Tableau Software, which have been enormously successful. If you look at the management teams of those organizations, they’re largely intact. Those people haven’t left and gone out and tried to do something new. Same case with Zillow, where most of the management team is there. They haven’t receded into new startup organizations. We just haven’t had the critical mass of companies like you see in the Bay Area where there’s been an Instagram-style success or in the Bay Area that you hear about the PayPal Mafia. In the Seattle area, there used to be the McCaw Mafia, which was from McCaw Cellular, and all those wireless people got into angel investing or entrepreneurship and started bankrolling a number of new companies, and we have a pretty robust wireless ecosystem here because of that. Boy, that was in the 80s. We haven’t seen as much of that sort of activity here in the last 10 or 15 years.
What I have seen, I think this is another factor here, is that you do have people that have made money in the tech sector here, whether it’s at Expedia or Amazon or Microsoft, where they are involved in philanthropic efforts, and so there’s a huge philanthropic community here and I think that sucks up some of the money.
TB: Well, what’s wrong with that?
JC: There’s nothing wrong with it. That is great that that’s here, but it does take some of the steam out of the startup ecosystem, that that doesn’t get as much love. I think that does have an impact here.
TB: What’s your take on that, Carol?
Carol Rava: I just got back last week, I was with a Seattle delegation of business leaders in Miami and looking at their very nascent tech-startup scene, very nascent.
JC: Yeah, I can only imagine. Yes. I’ve never heard of a tech company coming out of Miami.
Carol Rava: They’re working on it. They’re working on it. … The interesting thing is Miami has a ton of wealth, and they’re having a very similar issue as to what we’re talking about here, but it’s actually just locked up, period. They neither have the philanthropic community from the locked-up wealth nor do they have the entrepreneurial climate, so they’re struggling on both fronts, and so they were looking to us for answers on …
JC: On the questions we’re trying to solve as well.
Carol Rava: Exactly.
JC: We’re just at a different degree of it.
Carol Rava: I think one thing the Tech Alliance has tried to do is to showcase innovative ideas that are actually in their very early stage, too, many of them coming out of our great research universities and entities in the state. I don’t know if there’s a way to try to do that on a more far-reaching level, to try to almost tease some of those potential entrepreneurs who are really comfortable in their jobs and they’re not quite ready or don’t think they’re ready to take the next step, and if there’s a way to by elevating some of these great ideas and people who have resources and actually the business acumen, if there’s a way that we can try to connect the two.
JC: It’s happening to some degree. You see organizations like Pioneer Square Labs or Madrona Venture Labs, which are operating in that realm, trying to match the talent with the ideas. I think that’s germinating to some degree, but certainly more you can do.
Carol Rava: UW with their CoMotion, as well.
Transforming technology education
JC: I want to switch gears just for a second because I think one of the coolest programs at the Technology Alliance is Ada Developers Academy. Why don’t you explain what that is and why it’s such a unique program.
Carol Rava: I think one of the things that’s interesting, we mentioned this earlier in the podcast, that the Tech Alliance has had a history of identifying problems and then showing one piece of the solution, starting it and then often incubating it and spinning it off as we did with the Alliance of Angels. Ada Developers Academy is the exact same thing, recognizing that there was a shortage of women programmers and that you need multiple solutions, there is no silver bullet, you need to address this issue from the whole pipeline, K-12, higher ed professional workforce, etc. Ada Developer Academy was designed to connect early-career women who wanted to make a career switch with the in-depth training and education they would need to go to be a full-time programmer.
JC: Right. You have nurses and psychologists and teachers that are making the transition into coding.
Carol Rava: As I said, they’re early-career switchers. It’s a very competitive program. They are in class for eight or nine months, and then they are set up with an internship with some of the top companies in the greater Puget Sound who sponsor the positions. I think they have 100% of those who graduate, 100% job placement, which is just tremendous. Again, it’s a slice of the problem. Each cohort is about 25 women, and I think they run three cohorts through the calendar year.
JC: This is probably an impossible question to answer, but how do you get at the bigger problem? I know this is one slice of it, but how do you try to tackle the bigger problem of women in tech?
Carol Rava: I guess I would say two big things for that. One, as I mentioned, is addressing the pipeline and all components of it. We have some great efforts going on in Washington state right now, whether that’d be Code.org and trying to get more young people to take AP computer science, to even the Tech Alliance has a youth apps program, which is getting kids and teachers feet, just dipping their toes, in this idea of programming. It’s nowhere near the AP computer science, but again, the spectrum. You have programs like Washington State Opportunity Scholarship which provides scholarships for women and underrepresented populations in the tech world who want to stay in state and study STEM-related fields. I do think that you have to tackle it along the whole pipeline.
I think the second component of addressing the shortage of women in technology is recognizing that there are lots of different roles and ways that women can be a part of the tech sector, it’s not just as a programmer or computer science major, and so trying to surface some of those other opportunities as well.
TB: Just to illustrate this point, we had a great series from a woman who went through the Ada program. Her name is Sally Moore. She was a clinical psychologist, so not a programmer at all, and she went into the program, basically went through Ada Developers Academy, and came out as a Dev. It is never too late to jump into it, and I think that’s really what this program illustrates.
JC: It is a cool program, but it is a limited number of students that get into it. Are there any plans to try to expand it? I’m sure you’ve been contacted by other organizations in other communities that say they want to emulate this or copy it in some way.
Carol Rava: Yes, we should look at the ability to expand it, and then again it’s no longer part of the Tech Alliance, so that sits with them. I do think that there’s opportunity and certainly capacity in the field for expansion. I think the other piece of this is looking at what are the other niches in this problem around women in technology where you can have other solutions, not just one that you continue to expand. That’s an early-career one.
There’s an effort actually being led by Starbucks nationally to connect more 16- to 24-year-olds who are out of work, out of a job, with workforce training and a variety of skills for workforce training, as they think about getting their first and then their second job and maybe going back to school. I think there are lots of places in the pipeline and different ways of looking at it, can we look at workforce training and change the way that that is working in our community.
TB: What are your biggest goals in your initial early days here at the Tech Alliance?
Carol Rava: I think the biggest goal that I have for the Tech Alliance right now is helping tell the story of the public impact, the societal good that is happening from the tech economy, the innovation-driven tech economy that we have in Washington state. Everyone is a part of this, we all are users, we all benefit, and what is the giveback that we’re seeing from the tech economy? I think that that’s probably one of the biggest roles that the Tech Alliance can play.
TB: We’ve been speaking with Carol Rava. She is the new CEO of the Technology Alliance, which has its annual State of Technology Luncheon coming up on May 2nd, Monday, in downtown Seattle. Carol, good luck in the job, and thanks for being here.
Carol Rava: Thanks for having me. I appreciate it.