Purpose: Doing Good While Doing Well

On todays episode, Brenda speaks with Marcia Dawood. Marcia is a passionate advocate for positive change in empowering and educating everyone on how to invest. Her book "Do Good While Doing Well – Invest For Change, Reap Financial Rewards and Increase Your Happiness", is due out in September 2024 and this episode provides previews to our listeners. 

Brenda and Marcia speak about Purpose: Doing Good While Doing Well. How Marcia lives her purpose is as an author, host of the podcast The Angel Next Door, Chair Emeritus of (ACA)Angel Capital Association, the global professional society for angel investors, and on the board of Stella, a non-profit that supports female entrepreneurs. She is also a Venture partner at Mindshift Capital, and she currently serves on the SEC Securities and Exchange Commission’s Small Business Capital Formation Advisory Committee. 

You can find out more about Marcia at:

https://www.linkedin.com/in/marciadawood/

[email protected]

Watch her Tedx Talk here

Order her Book here

Interview with Catherine Gray host of She Angels Series- Invest in Her:

You can subscribe to Next Act Advisors at https://nextactadvisors.com/product/subscriptions/ and be sure to use the special discount code "sandbox25" for friends of The Founder's Sandbox for 25% off your subscription.

 

Transcript:

00:04
We're standing on the edge of something big. We're going to make some changes. Hi, I'm pleased to announce something very special to me, a new subscription-based service through Next Act Advisors that allows members exclusive access to personal industry insights and bespoke

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01:01
As a thank you to Founders Sandbox listeners, you can use code SANDBOX25 at checkout to enjoy 25% off your membership costs. Thank you.

01:18
So welcome back to the Founder's Sandbox. I am Brenda McCabe, host of this monthly podcast now in its third season. This monthly podcast that reaches entrepreneurs and entrepreneurs and business owners who learn about building resilience, scalable and sustainable businesses with great corporate governance. I want to assist entrepreneurs and entrepreneurs in building those scalable, well-governed and resilient businesses. And by way of

01:47
inviting guests to the podcast who are themselves founders, business owners, corporate directors, investors, and professional service providers who also share my mission, which is using the power of the private enterprise, be that small meeting at large to create change for a better world. Through storytelling with my guests on topics that are going to include resilience, purpose-driven, and sustainable growth,

02:16
My goal through this podcast is to provide a fun sandbox environment where we can equip one startup founder at a time to build a better world through great corporate governance. I'm absolutely delighted today. My guest is Marsha Dalwood. She's joining the podcast. She checks a lot of boxes, but she's today joining as a passionate advocate for positive change by empowering and educating

02:45
everyone on how to invest. So when I met Marcia back in February through one of our events with Ty So Kow, she had launched or was speaking about launching her book that's coming out on September 10th, Do Good While Doing Well, Invest for Change, Reap Financial Rewards, and Increase Your Happiness. I couldn't help but ask her to be a guest because she also has

03:14
passion or a mission, and that is for positive change. And one of many things she's done is authoring this book, which we'll get into a sneak preview of the contents of this book before its launch on September 10th, 2024. I like to choose a title with my guests that are around purpose or sustainability or resilience. And we chose a title for this episode

03:43
which is purpose, do good while doing well. So thank you today for joining me, Marcia. So happy to have you here in the Founder Sandbox. Oh, I'm so happy to be here. Excellent. So, you know, our paths crossed, I mentioned it earlier at the Thai SoCal chapter, the Indus Entrepreneurs SoCal chapter, where you spoke recently on some of the data coming out

04:13
the Angel Capital Association, as well as your role with the SEC. Before I get into my first question, I did want to give my listeners your entire background, your biography. It's very impressive and very extensive. You live your purpose as a multifaceted professional, your author of the book that I just mentioned, Do Good While Doing Well.

04:43
You are also a host of a podcast, The Angel Next Door. You are chair emeritus of Angel Capital Association, ACA. It's a global professional society for angel investors. And you're on the board of Stella, a nonprofit that supports female entrepreneurs. You're also a venture partner at MindShift Capital, and you currently serve on the SEC.

05:10
Securities and Exchange Commission's Small Business Capital Formation Advisory Committee. So thank you for bringing your expertise here into this podcast today. Well, thank you for having me. So can you share for my listeners some of the highlights you walked us through in February while distinguishing the role of an angel investor, a range of fund groups versus VC?

05:37
I mean, some of the trends you're seeing in the markets. Sure. Well, to put it very basically, an angel investor is somebody who writes checks out of their own checkbook. A venture capitalist will pool funds from other people, so they're using other people's money. And therefore, they're held to certain standards, and they're held to certain financial returns that their investors are expecting.

06:06
So angels, while we also of course would love and expect a financial return, we invest in the things that we really care about and are very passionate about. And we don't necessarily have the same time horizons and the same guidelines that venture capitalists do, which makes us a little bit more plausible for being immutable for being able to do certain things and invest in the way that we want to. So,

06:34
Over the last two years, especially maybe even going on two and a half now, the market has been very challenging for entrepreneurs to fundraise at any stage. The market has been very challenging for exits and liquidity. So angel investing or investing in early stage private companies means that you're investing in a company that is not.

07:01
publicly traded on the stock market, like you would see a stock like Apple or something like that. Got it. In order for the investor to have any type of liquidity, there has to be an event. Either the company is sold, or in rare instances, the company would go onto a public stock market, or an IPO, as we call it. So in those particular instances, when there is liquidity, then that money can in a way

07:30
can oftentimes be put back into the startup scene, the entrepreneurial ecosystem, as we call it. And a lot of times, investors will take any money that they do get as a gain from a previous investment and put it into other startup companies so that that capital can keep flowing. That's kind of the whole idea behind as people are getting returns. So that's really the biggest difference between an angel investor and a venture capitalist.

08:00
But right now it's been challenging for everyone because of this lack of liquidity that we've been seeing in the marketplace for the last two and a half years. Now we do think that there's been some talk that that market is gonna start to open up a little bit more. We will see more M&A activity. And if that's the case, then hopefully we will start to see more liquidity and then there will be more capital for investing. And

08:26
as an asset class, right? Angel investing. And with your role as chair emeritus and while you were also chair of ACA, what spurred you to write about angel investing, right? Is this the culmination of your years of experience? Walk my listeners through what made you take the time to actually write a book, do good while doing well.

08:52
Yeah, I think it was out of frustration more than anything. I would talk to people, even neighbors, friends, people I would meet at an event. And I would say, yeah, I'm an angel investor. I help early stage companies. And they were like, wow, that seems really interesting. And I would say, well, you could be an angel investor too. And they would be like, me? I could be an angel investor? I thought that was only for the rich and well-connected.

09:22
that isn't something I could do. I don't know anything about that. I don't have a degree in finance. I don't really think that's for me. So it wasn't that they didn't want to do it. They really just didn't believe that it was something that they were able to do in a way, either from a wealth or income standpoint or from a knowledge standpoint. So I thought, wait a minute, I think there's an awareness problem here because we have all these amazing entrepreneurs. They're building incredible innovations that the world needs.

09:52
But they're really struggling. I mean, struggling with fundraising. And it's one of the hardest things that they end up doing. And it's like a full-time job on top of the full-time job of them trying to build this company. So wait a minute, how can we fix this problem? Well, we could fix the problem if more people got involved and became investors, but that seems daunting.

10:17
So I thought, well, how can I help people realize that that doesn't really have to be quite so daunting? And you can kind of nowadays because of a lot of the regulatory changes that have happened in the last eight to 10 years, you can maybe step your way into it and really start to learn with basically putting less money at risk and you're gaining knowledge at the same time. You can also be a mentor to startup companies. That's become very popular and needed in the last several years.

10:46
All of these things that people don't really know about, that was what I was trying to do, demystify it. Right. And if you had to provide a sneak preview on the gut of your book, what would that be? Set takeaway. And who should be your target audience? Is it just the, is it actually entrepreneurs or is it those people that are just kind of wanting to become more informed around the asset class? Yeah, great question.

11:16
So I wrote the book for people who want to make a difference, but they just don't know how one person alone can do that. Okay. I think you feel that charity is a great way to give back, which of course it is, but they have no idea that this asset class also exists in a way that you can give back and potentially get a financial return at the same time. So that's really who I wrote the book for. As far as a sneak peek as to what's in the book, it is a Y2 book.

11:45
about angel investing. So I saw that there were several books out there and some of them are really amazing on how to angel invest. And most, if not all of them, have the words angel investing in the title. I thought to myself, wait a minute, if somebody really wants to learn about this, but they don't even know that it exists or that it's accessible to them, why would they ever pick up a book on how to be an angel investor? Because this has never even crossed their radar. So how can I attract them?

12:14
to think about things in a different way, to think about how they might use some of their capital in a different way. And when I say capital, I don't just mean money. It can be their human capital, their time. They could be helping an entrepreneur through mentorship. How can they start to look at the resources that they have in order to help grow innovative companies? How can they think about that differently so that they will want to then go and help either people in their local community and in their local area?

12:44
or maybe even startups nationwide or globally. I did watch your TEDx talk and I really do like how you have positioned the asset class or why is angel investing important if you want to make a difference versus charitable giving. And in your TEDx talk that will be in the show notes, you illustrated that extremely well.

13:13
That's very unique. Yes, thank you. And I really want people to donate to charity, help charities, that's fantastic. But we've put such a burden on them and they don't have the resources. They don't have the ability to actually take some of these innovations forward. We need those for-profit companies too. And when you look at the amount of charitable giving that happens in the U.S. annually, it's about 475.

13:41
billion, which is a lot of money. And that's wonderful. But that is equivalent to only about 1% of the value of the US stock market. So when we put things into perspective, it's really not doing any of these nonprofits of good service to say that we're going to put the burden all on you. And what is the size currently of the asset class as angel investing per ACA? Well, pretty much, if you look at the SEC data,

14:10
The most recent data has around $30 billion is where the angel asset class kind of lands. And then from there, we can look at that as far as there's angel groups, there's angel funds, and then there are individual angels. I tend to be a pretty big proponent and fan of angel funds. It allows somebody to put in a certain amount of money and nowadays it does not have to be

14:39
a quarter of a million dollars or any crazy big amount, they could put in a couple thousand dollars and get access to a diversified portfolio, which would allow them to spread their risk and not necessarily put all their eggs in one basket, as you would say. Right, right. Let's kind of switch gears here. While not entirely leaving your experience behind from ACA, you're currently, so you,

15:09
are you've had many women leadership roles, right? Now, whether you got there as a woman, I don't believe so, but what you've had many women leadership roles, most recent, well, maybe the most, I think, relevant for this podcast is you are currently an advisor to the SEC's...

15:34
Small Business Capital Formation Advisory Committee. Now getting there, and it really ties in well with corporate governance and how to do things, well informed with data so as to provide our regulatory structures or financial or legal with guidance and you're representing the small business world. Are you the only woman on the advisory committee? Talk to me through some of the women leadership roles you have had and

16:04
how you've obtained them and how you are opening opportunities for other women leaders. Yeah. So I have been on the investment committee of several funds. Okay. We were specifically focused on helping to get capital to female founders. If you look at the data over the last several years, although in angel world, it is improving in the venture capital world. And when you for the bigger dollars that companies really need to scale.

16:34
The statistics show it's been, you know, two to 3% of the funding goes to women and the rest goes to male led companies. So I've really been trying to help change that. And one of the ways to change that is to get the check writers or the people making the decisions about where the money goes to be more diverse. So to me, it was important to serve on some of these different investment committees for various funds, help with angel groups.

17:03
member of Golden Seeds, which invests only in women-led companies. I'm also a venture partner for MindShift Capital, where we invest in women-led companies globally. So those were things that were important to me. At the Angel Capital Association, I also started with a couple of my peers. We started a group called Growing Women's Capital. It's a peer group within the Angel Capital Association, where we help bring focus and attention to the female founders who are fundraising at the time.

17:33
And so those were all things that were important to me. As far as getting to be able to participate on the SEC's advisory committee, that's been great. And it is an extremely diverse committee, which I absolutely love. There's really representation there from men, women, racial disabilities, I mean, everything so that every group, I feel has a voice at the table because we're trying to represent

18:03
small businesses across the country. And that doesn't necessarily always mean startups, startups are scale businesses that people would want to invest in. But we also have people on the committee who are representing your Main Street businesses as well, coffee shops, things like that. Excellent. And the, can you talk a little bit about Stella? It's also.

18:30
a nonprofit group in which you've been involved, I think, since its inception. I have definitely been a champion and a supporter for Stella since its inception. I've only been on the board for a very short period of time. But the organization is really wonderful. They have done a lot as far as entrepreneurial education for women. They have an archive on their website of different.

18:58
different educational materials. They have an accelerator. They're always promoting ways that more female founders can get in front of investors. So they're doing some really good work over there. Can you get into a bit what is your role on the Small Business Capital Formation Advisory Committee? How often do you guys meet? What is the agenda? And what is the term? Because this is just one of many.

19:28
advisory committees under the auspices of the SEC? I'm just fascinated on what is the actual governance around that. Sure. So it's a four-year term, and I'm one year in as of now. We meet quarterly, usually in person at the offices in Washington, DC. Sometimes we meet virtually. It just kind of depends on the situation, but usually we meet in person. Meetings are all recorded.

19:56
and broadcast live over the SEC's website. So anyone who wanted to go back and watch any of the meetings, or if you wanted to watch any of the future meetings live, that is absolutely doable. They're always listed on sec.gov, the website. So the role is really for us to be able to help the commission get a better sense of what's happening, kind of boots on the ground.

20:26
So each of us has a little bit of a different angle for how we represent small businesses. I of course come with the angel investing lens. There's another person on the committee who has a debt crowdfunding platform that he founded. And that's a very interesting perspective since that's something that's kind of newer to the state of how entrepreneurs can fundraise. So we're all.

20:54
trying to have basically a conversation about some of the challenges that entrepreneurs face when it comes to fundraising. And one of the things that we tackled quite heavily, at least for the first few meetings that I was involved in was the accredited investor definition. Got it. As it stands right now, to be an accredited investor means you have to have a certain level of wealth or income, $200,000 by yourself, 300,000 with a partner.

21:23
or a million dollars in net worth minus your home. And there was talk or has been talk that that could be indexed or changed or raised. And we did some rough calculations at the Angel Capital Association. There were also calculations done, then I don't remember the exact numbers, but you could go even go back and watch our meeting on sec.gov and you'd be able to see that, but it would eliminate.

21:47
a lot of the people who were already angel investors. And we only have about 300,000 angel investors in the country. And remember, there's about 330 million of us here that live in the US. So, there's a lot of opportunity, let's just say that. And if we started to eliminate the ability for people to participate based on an income or wealth level, that would be challenging. And it would make fundraising for entrepreneurs even that much harder.

22:14
So what we suggested in one of the, and you can actually see the recommendation that we made on the SEC's website, but we made a recommendation to say, hey, how about we don't actually focus so much on income and wealth and we focus more on education. And we'd like to see there be an education component that would allow for more people to be able to participate in this asset class. And the Angel Capital Association has put in

22:43
And I think there were some others as well who have put in some proposals to say, hey, we could help with this. So that's kind of where we are right now. Right. And as emeritus chair of the ACA, can you talk about some of the innovations that have come out recently? You've talked about angel funds. I'd like you to talk. You've talked a little bit now about credit investor and the definition of your work at the SEC.

23:13
But the recent publication, I'm a member of ACA, attended the annual summit this year. I found the work that you've done on the actual convertible note form for the angel investment is fascinating. Can you talk a little bit more about that? Sure. So there are documents that were put out by the National Venture Capital Association years ago

23:42
companies who want to fundraise to use those documents for a priced round. Of course, that would be for actual equity, you're selling shares of your company, that kind of thing. And those are great. And very, very helpful to entrepreneurs, because I think in some cases, it can save them a lot of time and money in legal costs. However, there wasn't really anything out there that could be used for convertible notes.

24:09
Safes, yes, there is a kind of a standard safe note that people view and that has also saved entrepreneurs time and money, but the Angel Capital Association was interested in putting something out that was like that, but in the convertible note form that was more, quote unquote standard or something that, at least a starting point for entrepreneurs so they didn't have to start from scratch or have to go to an attorney and have them draw up all kinds of paperwork. So yeah, and that's available on the ACA's website.

24:40
So this which gears back to one of your other facets. You are associate producer of a film called Show Her the Money. I first heard of it through, I guess meeting in February and the Thai SoCal chapter on September 19th will be actually screening this film.

25:09
in conjunction with a global competition for women led company. So I'm, when I, um, learned that you would join me as a guest, um, of the podcast, I was delighted to get kind of a scoop also about show her the money, how you got involved as associate producer and what can we expect? Yeah, it turned out to be a tremendous film.

25:35
Catherine Gray and Kai Dickens, who put it all together, Kai Dickens, the director, it was Catherine Gray's idea, have really done a tremendous job of showcasing through storytelling the problem and bringing more awareness to this problem. So Catherine Gray and I met after somebody saw my TED Talk and saw hers and said, hey, do you guys know you're talking about almost exactly the same thing?

26:02
know each other. And this was at the time right before the film came out that Katherine was still looking for a few investors. And so I myself and a couple other angels that I know we, we kind of helped fill that round up so that she could move the move the film forward. And we've been on a 50 city tour that's now turning into probably close to 100 cities. Katherine's been such a trooper. She has really gone to a lot.

26:30
a lot of the screenings. I've gone to several, but it's a lot to kind of go city to city almost, I mean, there's nowadays, there's a showing almost every day in different places around the country. So there, we try to have at least someone from the film or an associate producer there at each of the screenings, but it's really been fun to showcase it.

26:54
We always have a panel afterward and we get questions from the audience. We let the audience kind of, you know, give their comments and what they're thinking about it. And the, I mean, the feedback has just been tremendous. And will there be a sequel? That's a good question. There's a lot of talk about a lot of different types of things, so you never know. Right, excellent. So you heard it here on the Founder's Sandbox. Marsha Dawood is actually.

27:22
Associate producer of a film, Show Her the Money. The Thai SoCal chapter will be screening the film on September 19th at Noah House here in Hollywood, Los Angeles, so very exciting. Well, Marcia, I like to have a part of my podcast where my listeners can learn about how to contact you. They will be, you have many touch points, but what would you...

27:51
suggest as some of the best ways to get in contact with you? Well, I would just say go to my website, which is simply marshadalwood.com. You can learn about all kinds of things. I have lots of free resources there. Currently, you can even download a free chapter of the book as a preview. Oh, to do that, they can do that. And of course, I have everything, I linked everything on there, including the TEDx talk in Charlotte. I did do a rap battle. I don't

28:20
Did you do a rap battle? I did a rap battle called Angel Investor versus Venture Capitalist. Because I was watching YouTube with my step sons one day and we saw a rap battle between Snow White and Elsa. I thought, well, that's clever. And that's a cute way to like kind of get a message across.

28:44
maybe I could do a rap battle about an angel investor versus a venture capitalist just so that people would kind of have a better understanding of what the differences are. So one day I just sat there, this was before chat GPT, and kind of wrote it out, you know, like what it would be. And, and of course, I'm cracking myself up the whole time. And because I was like, Oh, that's funny, you know, how can we make that, you know, more clever? So anyway,

29:13
I debuted it at one of the ACA summits a couple of years ago, but that's all I can say to you. Excellent. So in the show notes, you will have access to the TED Talk, the order online of Marsha Doudwood's new book, and you have your podcast, the Angel Next Door podcast. And who do you invite there? Well, I saw a need about three years ago. That's when I started it.

29:42
that there really wasn't anybody talking about how do you become an angel? Or how would you help a company with either mentoring or helping them with investing? There's a lot of podcasts out there about entrepreneurship, lots of things about pitching, raising money, how did you build your business? And they were great, I like all of them. But I was really seeing a need for how can we showcase this, an angel.

30:08
that can be anybody, it can be your next door neighbor. So that's kind of how the title came about. And on the podcast, I have people who are angel investors who are just telling their story about why and how they became an angel investor, how they learned about it. But from there, it's kind of spun into other things. I've had four Congress people on talking about small business in their community and why it's important and what they're doing in Congress in order to help to...

30:38
spur economic development. I've also had two of the SEC commissioners on, which is fun to go through what they're thinking about and the changes that could potentially also help entrepreneurs. And then I've had several people come on who were experts in areas like equity crowdfunding, debt crowdfunding, revenue-based financing.

31:00
And then of course, one of the things that angels always wanna know about are tax benefits, even though taxes sometimes seems like a boring topic, taxes are something that everybody really needs to know about and there are several tax advantages that angels can partake in, but many are not known. Exactly. Excellent. So before we finish, I actually go back to

31:29
the founder sandbox and kind of the three cornerstones that I am working on as my mission and building resilient, purpose-driven and scalable companies. So I always like to ask my guests and not one guest has the same definition or I guess the meaning to each of these terms. So I'd like each of you to tell me what does resilience mean to you, Marsha?

31:56
So when I think of resilience, it makes me think of how hard it is for an entrepreneur to build a company, just anyone to build a company. So resilience is that tenacity that you need in order to keep going on the hard days and the days that you just wanna throw your hands up in the air and say, why am I doing this? So that is really so important because building a company is such a...

32:22
hard work and it's so much harder than I think anybody ever realizes when they go into it. And I've talked to so many entrepreneurs who've said, oh my gosh, this is like, this is way, way, way harder than I thought it was going to be. But it also takes a village. So that resiliency needs to have a community around it. And so that's why I really am such a proponent of angel investing because we really can form that community and help build the resilience with the entrepreneur. Thank you. Purpose driven.

32:51
I think you have a purpose, right? Which is educating on the asset class and how to become an investor. So what is purpose driven for you? Well, I think that goes back to do good while doing well. I mean, I wasn't necessarily going to title my book that. It was the title of my TEDx talk. However, I went through...

33:16
as you do as an author, you go through many, many, many iterations of what the title is gonna be, because it's one of the most important things. And I did several focus groups where I gave people options about titles and do good while doing well, kept coming back and people were like, that resonates with me. So then I just think, purpose driven, that's what people really, that was the thing that really, it just stuck with them. And so,

33:45
I think aligning your values with your money, with your goals, you know, all of those things are a great way to be purpose driven. To make a difference. Right. Sustainable growth. What's the meaning for you sustainable? So sustainable means like long term, we need to be able to do something that's hard and be able to.

34:12
continue to do it. And if we come up against roadblocks, how do we pivot? We tell entrepreneurs all the time, it's okay to pivot. It's okay if you come up against something in your company and you're like, wait a minute, this doesn't fit or it doesn't work and maybe I need to change something, that's okay. I mean, everything that happened in 2020 with COVID. Oh my goodness. Lots of pivoting, right? So to me.

34:37
sustainable growth is like, how can we do that? How can we be in the right mindset so that no matter what happens, we can keep going and we can keep building what we really wanna see in the world. Very nice, thank you. Last and final question, Marcia. Did you have fun today in the sandbox? Oh, love playing in the sandbox. And had I known that you were also a rapper, I would have had a question in there, but thank you for sharing the fun side.

35:07
angel investing, right? So to my listeners, if you like this episode with Marsha Dawood, sign up for the monthly release of founders, business owners, corporate directors, and professional services go-to podcast to learn about how to build resilient, purpose-driven, and scalable companies while doing good. Thank you very much for joining me and Marsha Dawood signing off for today. Thank you.