January 11th, 2019

Interview: Marianne Hudson

Meet Marianne

In this edition of Lived It, we sit down Marianne Hudson, Executive Director of the Angel Capital Association, a North American-wide professional association of angel investors. In November 2018, Marianne announced that she is retiring after an incredible 14-year run.

With Marianne’s facilitation and guidance, what started as a workshop series for angel investors moderated by the Kauffman Foundation turned into the Angel Capital Association. Now 14,000 members strong, the organization has a presence in every American state and 5 Canadian provinces. With over 10 years of experience in angel investing, Marianne is focused on making angels better at what they do, from finding great deals and negotiating them to giving post-investment support to companies. Marianne also represents Angels in Washington D.C. where she focuses on education and best practices while connecting Angels to make deals happen.

Current Job: Executive Director of the Angel Capital Association

Hometown: Kansas City, Missouri

Education: Degrees in Liberal Art, Masters in Public Policy

First Job: Waitressing at the ice-cream burger joint, Friendly’s, then an internship in her Congresswoman’s office, before moving on to State of Ohio’s Technology Economic Development office.

Work Attire: Business Casual

Hobbies: Food and travel

Journey into Angel Investing

Marianne took one unknowing step into angel investing 10 years ago and has been involved ever since. “I’m a weird one,” Marianne admits. “I was studying angel investing for probably five or six years before I realized I could be an accredited investor and make angel investments.”

Marianne described the experience as consuming. “I never knew what an angel was and then all of a sudden that’s what I was spending a lot of my time on.”

While serving as Entrepreneurship Director for the Kauffman Foundation, Marianne took a call from an angel investor in Boston who asked her to facilitate a get-together for investors who were finding it difficult to have common ground without an industry to pull them together. “We don’t have a way to really talk and learn from each other,” Marianne recalls the investor’s words to her. “Would you be willing to facilitate a meeting for us?”

Because the Kauffman Foundation was involved with training angel investors, Marianne had some resources to pull from to prepare for this event. “We held our first meeting and I think there were 25 people there. And then, we had another meeting six months later and then another one and another one. After about about the fourth, it seemed like something we should just do. So we made it a formal thing and eventually turned it into an independent organization.” That independent organization became the Angel Capital Association which now has 14,000 members.

It’s been six years since that aha-moment and Marianne has been actively investing in companies in her hometown of Kansas City, Missouri ever since. Being part of other organizations, such as the Women’s Capital Connection, has led Marianne to be part of women-focused funds across the US.

Marianne's First Investment

When the Angel Capital Association was officially founded, they opted for an incubator as their first office. Their neighbours, who had been in the space previous to their arrival, seemed to catch Marianne’s attention. “I was kind of watching this company and seeing what they were doing,” she reminisces. “I remember sitting in the meeting listening to [the founder’s] pitch and going, ‘Oh, man. I’m doing the thing you’re not supposed to do - I’m falling in love with the entrepreneur.’”

The pitch was a biometric security technology company called EyeVerify (now rebranded at ZOLOZ) and Marianne couldn’t get enough of the idea. She felt that the team was headed by a very capable and enthusiastic visionary. “It was a really cool deal,” Marianne emphasizes. “You’ve got the entrepreneur who has great skills. He matched up with a professor from the local university and used his technology to turn into this company that takes a selfie of your eyeball. It turns out that the blood vessels in the whites of your eyes are just as self-identifying as fingerprints.”

“It really promised a way to do everything from security for banking to probably, eventually, another way to turn on your phone. I made two investments in that company. I could have made three while I had the chance, but I made two investments and they sold to an arm of Alibaba in 2016.”

“It was my first investment and, first exit,” reveals Marianne. “But very, very exciting to get the cheque, to be part of it, to hear more about the story behind the acquisition. The other thing was now this company gets to stay in my hometown. They’re going to get to quadruple in employment and it’s just a huge win for the community and to be one of those investors that helps our local ecosystem - it’s the coolest.”

How To Get Started

“Learn from other investors,” Marianne stresses. “Talking with other Angels, listening to the questions they ask and thinking about the comments they make after you meet the entrepreneur is key. Stick your nose into the due diligence process.”

Writing The First Cheque

Marianne remembers writing her first cheque when there was “finally a belief in the entrepreneur.” But that enthusiasm came a lot later than she expected.

“I think a lot of women who become angels take a while to write the first cheque. It took me seven months. I don’t know if that’s the average. I thought I would do it more quickly but everything needed to be perfect, even though I was warned not to get into that. I finally [wrote the cheque] by watching what other investors were doing and learning from their questions.”

Changing Demographic of Investors

“We’re getting ready to release a study that talks about the demographics of Angels,” explains Marianne, whose study is being conducted with a group at the Wharton University of Pennsylvania and Harvard Business School. The survey starts with the questions:

  • How did you first get involved in Angel investing?

  • What is your investing activity?

“22% of those [respondents] - in the largest dataset ever on angels - are women,” Marianne enthused. “And what’s really cool about it is if you look at angels who’ve just been investing for a couple of years - that’s 30% of women.”

Marianne says the shift is happening quite noticeably in other sectors too. “I worked for the State of Ohio’s Technology Economic Development organization,” she details. “So I had a chance to learn a lot about incubators, start-ups and investing in innovation at universities at a time when that was all men. So I was this young 23-year-old going to a lot of meetings with university leaders and Fortune 500 kind of people and it was interesting to watch that process over time. Now if you go in that same setup you’ll see a lot more women.”

Dispelling Myths

“Anybody can become an angel. However, those with entrepreneurial backgrounds tend to be more successful and fewer women have been entrepreneurs so there’s some work to do there. But not all angels are from Silicon Valley and you can really become an angel from almost any background.”