Interview: Joanne Wilson

Intro

In this edition of Lived It, we sit down with Joanne Wilson, co-founder of the Women’s Entrepreneur Festival, angel investor, and prolific blogger. As one of the most seasoned Female Funders in the industry, she’s passionate about investing in women and their businesses.

Asking a woman like Joanne Wilson about how she started investing is always an adventure. Joanne has been involved in the tech industry since the mid-90s and had been connected to the investing world through her husband, Fred. She had also always been involved in building companies. When the next generation of the Internet began to grow, so did her interest. She didn’t particularly want to start her own company or even go work for a company — but she was curious and wanted to get more involved. So how exactly did she come to make her first angel investment? Really, there’s no simple answer.

“It’s an evolution,” she said. “I’ve always had a very good sensibility for the big picture and what’s coming down the pipe. I needed to figure out how to reinvent myself in a way that made sense for my own happiness.”

In this interview, we sit down with Joanne to talk about her start in the angel investing and learn from some of her best investment strategies, from deal flow to her thesis. She tells us how to make a deal your own.

Meet Joanne

Years as an angel investor: 8 Number of investments: 85+

First Investments

Joanne gives Curbed Media the title of her first-ever investment, though in her next thought, she realized that she had other, past investments that were “sort of one-offs.” She didn’t really think of them until later on when she remembered that she did sit on a board and make an investment before Curbed Media. But until Curbed Media, she had not really set out to define herself as an angel investor.

The company, founded by Vox Media’s current editorial director, Lockhart Steele, got her her excited about the business because she believed this was how content was going to be received as the Internet kept growing.

“My thought was that this is how content is going to be taken in as we move forward with this thing that we all call the Internet — at the time nobody’s really knew what we’re going to do with the ability to connect 24/7.”

The multiple content channels showed her that this media brand could be like Conde Nast, but for the next generation that was becoming a part of the Web 2.0 story. With Lockhart raising capital to grow Curbed, Joanne found herself chatting with Fred, and he encouraged her to go for it.

“I had been watching them and reading them daily. I was kind of obsessed with it.”

Joanne was there from the beginning until the end of Curbed’s journey, and gave a speech at the dinner celebrating the acquisition.

“I had been watching them and reading them daily. I was kind of obsessed with it.”

“I was involved with Curbed Media’s exit to Vox, I sat on the board of Curbed. I sit on a bunch of boards at companies I am invested in. Some I join at the beginning and others who have institutional money have asked me to come back and take that board seat. It’s a fiduciary responsibility that I take very seriously.”

Investing in Curbed Media was an invaluable learning experience, she said.

Other Investments

“I’ve been very fortunate because I have been doing this vicariously for a very, very long time and so my learning curve was pretty damn short. Curbed Media was my first investment and has been my biggest exit so far, so I don’t feel like I made too many big fumbles. I think the biggest fumble I ever made was getting involved in a business I loved so much that I was blinded to the entrepreneur behind. I invested in someone that everybody seemed to love, someone everyone I knew was pals with. The concept was so cool, but the reality was he was not a great entrepreneur. That lesson really stuck with me and I will not make that mistake again. At least, I hope not to.”

Why do you angel invest?

I invest because it is empowering to help founders build their businesses. It is exciting to see companies grow from an idea to something where we have created jobs, economies and products that people want to use or buy.

Deal Flow

Joanne has been around New York and the investment industry for a long time. One of her skills is keeping up those contacts, networking, and just talking to people. As a result, she has a long reach – she knows many people who are angels or early stage investors. Whether she’s at a board meeting, emailing them when she finds something interesting, or bumps into them at events, it’s an instant conversation. The communication between them doesn’t happen every day, but the conversation is ongoing. “I really don’t seek out anything, they just sort of fall into my lap,” Joanne said.

Cold emails from entrepreneurs are another way she finds opportunities to invest.

“It’s all over the place,” she said. “I’ve got a company out in Chicago. [The founder] literally cold emailed me two years ago with her deck. I opened the deck and I read it and I thought, ‘Damn. I’ve never seen this before. Why isn’t someone doing this? I don’t believe, I can’t believe, it doesn’t exist.’ And I emailed her back.”

Joanne discovered this entrepreneur found her because her name kept coming up in conversations with her other investors. They upped their communication to chatting on the phone and Joanne realized that she already knew four of the entrepreneur’s investors. Not surprising, based on Joanne’s strong foundation of communication and networking. “I ended up investing in her and ended up introducing her to her last lead,” she said. “So that’s a perfect example of something out of nowhere.”

“I think at the end of the day you’re investing in people, you’re not investing in companies. I definitely do spend time reflecting on certain companies or investments that maybe aren’t doing as well as I had hoped and I think, ‘What was it that I saw?’ and, ‘Do I remember that red flag and why didn’t I react to it?’ You’ve got to pay more attention to those flags.”

“I think at the end of the day you’re investing in people, you’re not investing in companies.”

Who do you go to when you need advice on your investments?

“It changes every time. I mean, I really don’t send out deals to people unless I’ve already committed myself.”

Thesis

Do couples that invest together have similar theses? Yes and no. Eventually, each person refines their own opinions about what investments to buy or sell, and what that means to them. By the time Joanne started investing independently, she and Fred had already put their money towards investing in entrepreneurs and real estate.

“I had this thing in my head which is, ‘Well, I should not invest what he invests in. I should invest in totally different things because it’s important that we spread our capital into different arenas so that we don’t have everything in one area, it’s too risky.’ I just thought from an intellectual perspective, that made the most sense.”

That interest in investing differently may have been the start to Joanne’s thesis but as she started investing, she began hearing from so many women and she started noticing a pattern. These women had little to no support despite their great ideas that could become even greater businesses. That realization helped refine her thesis even more.

“I made really a conscious decision to make sure that I was supporting women more than anything else. And although I do invest in men, of course they have to be 100 times better than everyone else in the room. I have made that conscious decision and it really came down to a thesis that was more than a financial one.”

“I made really a conscious decision to make sure that I was supporting women more than anything else.”

Joanne said that it’s important to have a thesis that you can follow when you start investing.

“To me, it’s about being consistent about the financial model when I invest because its my portfolio that essentially mitigates my risk. I never say, ‘Wow, I really thought that deal was so much better than the one I saw yesterday. I’m going to do them both, but I’m going to give that one double what I would usually give.’ That’s not a good idea, because to me as people pull out of the gate, you just never know who’s going to be the winner. You just don’t. It’s different set of skill sets, different set of times for execution, and some people surprise you. If you say, ‘I’m only going to do 10 deals a year,’ you have to be disciplined about that. If you’re doing the kind of deals that I’m doing I think it’s important to do several in order to have financial success. If you only do one deal a year then the chances of succeeding in this arena are slim to none.”

Really think about what you truly want to invest in and how much capital you are going to put to work, she said. Those two principles, plus consistency, keeps you and your thesis stable in a world full of potentially exciting business ideas. Limiting your investments to your likes and dislikes is also key.

“I don’t like building a better mouse trap, unless of course, the mousetrap hasn’t been rebuilt in 30 years. I have a lot on my plate right now and I think things go in waves, too. I just did a new deal that came by my desk, I haven’t closed on it yet, so I don’t want to talk about it yet, but, it’s one of those deals where just I got so excited so quickly and I was like, boom, boom, and helped them really raise the rest of their round very, very quickly. And it wasn’t something I was looking for. It just passed through my desk.”

Joanne doesn’t have a set dollar value of how much she typically invests in a company, though according to AngelList, she generally invests between $10,000 to $100,000. Instead of focusing on the dollars and cents, Joanne has her own method.

“I like to own one percent of the company. And that one percent is at a $5 million cap and below. I really don’t want to do investments that are over that amount. ”

The Future

“I’m in an interesting space. I don’t know why I ended up here these days. It’s like anything, everyone’s careers evolve, businesses evolve, life evolves, you evolve,” she said. “The Women’s Entrepreneur Festival is coming on its sixth year, and is certainly ahead of the game. It’s not going to be at NYU anymore. We’ve literally decided to take it on the road, put it in an environment that is not an educational environment, but to make it more of a private event. It’ll be very similar to how it’s been, but we’re taking it up a whole other notch, which is fantastic because it really needed a good shot in the arm. We’ve already built this amazing community and I think that was sort of the impetus for a lot of these other things.”

“My feeling is that women like to understand what they’re doing. They don’t want to just follow someone. They ask questions. They want to own it. They want to understand it. To share knowledge and be validated. In that regard, this is an opportunity to do that. And in the Women’s Entrepreneur Festival, we’re creating this whole new platform so that there will be a community to speak to. We’re always thinking about, “Where does that go?” Do we take it to Los Angeles, do we take it to Berlin? Is there going to be a community around that where we can divide it into separate sections where people can talk to each other over the course of the year?”

For aspiring angel investors:

“I always say that people who started at the very beginning like everything for the first six months. I think that when you start talking to all these super smart, really, incredibly, magnanimous individuals who have synapses that are flying at a million miles an hour, it’s very hard not to sort of become, ‘Ah! This is great! Oh my God, I love this person! This is fantastic!’ It’s in the moment and it’s very important to pull yourself away, give yourself 24 hours and say, ‘Okay, really? Was that really as good as I thought it was? Or was I just reacting to the moment?’ And I think that’s the best way to look at it.”

This practise has worked well for Joanne, with some surprising outcomes. She mentions one particular investment in a CPG related company as an example.

“At the time I had decided not to invest any more money into the CPG world. I met with these three women from two separate companies and I just wanted to give them some help. It wasn’t something I really wanted to invest in.” She told them that she has a sweet spot for people in CPG, particularly food, and that instead of investing, she would just meet with them and give them some advice.

“And literally, five, six, seven, eight days later I still could not get these women out of my head,” she said. Eventually, Joanne realized that she should be investing in them. A little context through separation helps her to keep a level head.

”Once you jump in the water then you kind of want to get up and jump in the water again.”

“There are so many different types of investments. I think that early stage investing, to most people, is incredibly scary and a tremendous risk. And it’s easier to make an investment when there is traction beyond 12 people, and you can actually see it. I have friends that have certainly come out of later stage investing that wanted to go into early stage because it’s sort of ‘the thing’ and they’ve realized very quickly, ‘I can’t do this. I don’t have the mentality for it, I want to analyze stuff.’ There’s not a lot to analyze at this stage of the game. Once you jump in the water then you kind of want to get up and jump in the water again.”

A word of caution though, when it comes to signing legal documents, always have a lawyer go over them before you launch yourself off the springboard and back into the pool.

“These new standard docs, the ones that are coming out of Y Combinator that are like the KISS forms and I won’t do them. There’s no maturity date, there’s no interest, it’s like they’re pieces of air. It’s like I might as well just Venmo them the cash. It’s just not okay. There is a process. It’s just like the reason why I prefer Kickstarter, although in pure transparency we’re investors in Kickstarter, versus Indiegogo. What I like is that in Kickstarter, you don’t get the money unless you raise it all. It forces you to go through a process, thinking it through, engaging in your audience. It really pushes you to think about being a business person whereas Indiegogo, you launch it, it doesn’t make any difference if you hit your goal, you still get your cash. I don’t think there’s anything you learn from that.

“You need to understand what you’re doing. Which is why I want to put a bunch of women together in a room, so they can make their own decision about what they’re investing in. If you don’t make your own decisions and you’re just throwing money in a pot, what do you learn from that? Nothing.”

“I always say that people who started at the very beginning like everything for the first six months.”

For entrepreneurs trying to get in touch:

If you cold email Joanne, you will get a response. Is there a formula for getting her attention? Not necessarily, though all entrepreneurs need to put some serious thought into their decks.

“Everyone writes an email differently. Sometimes it speaks to me, sometimes it doesn’t. Sometimes with the deck I open up and go, ‘Wow, that’s interesting.’ Other times, I open up and go, ‘Oh my God, I’ve seen 400 of these.’ But I always respond. It’s not easy being an entrepreneur. You’ve got to be your own salesperson and your own cheerleader from the very beginning and it’s just nice to get a response.”

Joanne recommends reading:

Joanne recommends reading the blogs and websites of venture capitalists, entrepreneurs, and companies to learn what’s going on in your industry, and to learn from those who have been in your position before. She especially recommends the blogs of Brad Feld and her husband, Fred, as well as Mark Suster’s.

“I think it’s important to read something like TechCrunch and find out what’s happening in the industry. It’s all out there. I think there’s a variety of different places to look for this stuff but the ultimate way to do it really to follow all these people on Twitter so you can read their feed and see what’s going on and click through the links if you feel like it.”