TSP037 | Geri Stengel – Transcription
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John Livesay:
Welcome to The Successful Pitch. Today’s guest is Geri Stengel who runs a company called VentureNeer. Geri is this wonderful combination of a serial entrepreneur, a teacher, an author, and someone who is an expert in making social impact. She talks about the importance of your elevator pitch grabbing someone’s attention either through questions and analogy or statistic. Geri also says how important it is whether you’re a female or a male entrepreneur that you are an agile learner, someone with curiosity, tolerate ambiguity and that you have grit, integrity, and passion, and finally that you’re coachable. Those are the things investors are looking for when they hear a pitch. She’s an expert in equity crowd funding and has a real insight into how to find angels, what they’re looking for, and what you need to do with all the new legalities. She has great stories to share with us, enjoy the episode.
Hi, welcome to The Successful Pitch, today’s guest is Geri Stengel who if you want to know who you get when you combine a serial entrepreneur, a teacher, and an online business expert that is making social impact, you get Geri. Geri, welcome to the show.
Geri Stengel:
Well, thank you for having me. I’m so excited to be here.
John:
Well, you have so much expertise in so many areas. One of which of course is equity crowd funding and specializing in helping female founders get their message across in a strong way, but before we get into all the things that you are doing, I want to ask you to take the readers and listeners; because people can read the transcripts as well; back to how did you become such an expert. I know from your background you worked at both Dow Jones and The Wall Street Journal. I love to hear people’s story and how they got start. So, would you mind telling us what life was like at Dow Jones and The Wall Street Journal and how you decided to parley that into what you’re doing now at VentureNeer.
Geri:
Absolutely. I love working at Dow Jones, but certainty it was not one of the most women friendly companies and when I transferred into the information service division I had double the responsibility and made 60% less than the man I replaced and when I complained about it, I would get answers like, well, you’re not married, you don’t have a family to take care of.
John:
Oh my gosh. What year was that? Just for reference.
Geri:
That was 89.
John:
Okay, it’s not that long ago, people.
Geri:
No. And really sort of what got my juices flowing was when I looked, when I started hearing all of the stories of women raising money and that they were experiencing similar and different things that I experienced and I really wanted to make a different, so I had already been involved with women entrepreneurs in the late 90s. I was on the board of the National Association of Women Business Owners. I had started a conference company in which we did conferences for women that were breaking through the one million dollar revenue mark and then I got more into the social impact world.
As I was saying, I started writing in Forbes to give women role models so that they could see women just like them were starting and growing multimillion dollar companies that were scaling into mega companies and that could be tens of millions of dollars, hundreds of millions of dollars and even billion dollar companies and over the last three and a half years, I’ve had the honor of interviewing some of the most successful women entrepreneurs that are out there.
John:
What do you see – I’ve actually read some research that says a lot of women CEOs perform better than male CEOs. What do you see is the big difference between a female founder and a male founder, if any?
Geri:
I actually don’t think that there is a different between male and female founders that are successful. I think they are agile learners and that women and men may approach it slightly differently, but they have intellectual curiosity, they tolerate ambiguity, they have EQ or emotional quotient and those are the things that are really critical to being a successful leader and I don’t really think that there’s a difference between men and women. I think one of the reasons women led companies are out performing male-led companies is that there’s diversity in their companies.
So, a women-led company is going to be more likely to have a diverse management team and diversity takes all shapes and sizes, so that could be race, ethnicity, it can be gender. I don’t think that women have, in a sense, a better skill sets at being a leader.
John:
Interesting. You know, I really want to take a deep dive if you don’t mind in what you just described because so many of our listeners are trying to find ways to make their pitch successful when they’re talking to angels, VCs or to even get funding through equity crowd funding, which we’re going to get to in a minute, but regardless of what challenge you’re going after. Everyone that you’re talking to or pitching to about your company you have to come across as a leader, so those things that you mentioned that all successful founders have are worth just describing in a little bit more detail, because they’re so great and it’s so important that everybody realizes that they must come across as an agile learner, someone with EQ, emotional intelligence, tolerating ambiguity, I love that one, and I think the other one was just being curious. Is that right? Did I get those right?
Geri:
Absolutely, absolutely. I’ll throw in a last item there. It’s perseverance or grit and I think in terms of presentation skills, it’s really showing that you have high integrity, so it’s really important to show potential investors that you are trust worthy, because they’re giving you their personal money, that you are passionate about the business that you’re going into and that you’ll do anything to succeed at that business.
In the presentation, I’m not sure that you’re actually showing your intellectual curiosity, you’re certainty showing your expertise, your knowledge, your skill set, and you’re doing it in a very quick way, because, you know, when you are presenting and you know this better than me, you only have a few minutes and you have a few minutes and you need to do it in a plain English.
So, you’re weaving in a story, you’re showing that you’re trust worthy and you’re passionate and, yeah, so there are a variety of things that you need to convey as you’re doing your presentation and I’m just going to take a sip of water now.
John:
Of course, I love what you said about in plain English and weaving in a story. One of the things I like to work with my clients on is, you know, how did you come up with the idea for the name of your company, how did you come up with the idea to solve this problem. Take people back and show that you were curious to solve a problem and make a difference in the world, especially in the world of anything to do with social impact.
So, those are some great, great suggestions and insights, because those are the, what I call, the unspoken questions that an investor has when they’re listening to you pitch, so it’s so important that you’re aware of the subtext and am I coming across as someone with passion and integrity and grit and all the things that you say and often times having a story about perseverance or a story about a previous startup that you had to figure out how to make something work, those are the kinds of stories that investors are looking for.
Let me ask you about an article you wrote for Forbes where you’re talking about women get their game won with angels and how one of the things you talk about in there is you need an elevator pitch, an executive summary, and then the deck. I love these five things that you talk about. The team, the idea, the market size, the competition, and what’s your unique advantage. Can you expound on that great article you wrote for Forbes?
Geri:
Okay, so I actually wrote it for QuickBooks.
John:
Oh, I’m so sorry. My mistake.
Geri:
That’s quite alright. I write in QuickBooks and for Turnstone, which is still cased as small business and then I also write in Forbes. So, in QuickBooks I’m primarily writing about financing and I was writing about, again, the tools that you need for your presentation. So, you know, now I’m forgetting what the question was. What do you want me to cover on that one?
John:
Sure, I was just curious about what, when you’re talking about the team and the idea and the market size and the competitive advantage and what you’re bringing to market place, how do you encourage people to bring all of that to life? Is there anything that you can expand upon about what you wrote there?
Geri:
So, I think it’s really important to grab investor’s attention. So, I teach entrepreneurs also and last night we’re doing our elevator pitches and we were talking about different ways opening whether it’s your investor presentation or your elevator pitch and I know you interviewed Sam Horn, so I was giving her approach, which is to start with three questions and I think that is one really, really terrific way of doing it.
Other people may do an analogy, so one student in my class was we are the Expedia of XYZ and then the other thing that I also like to do is open with a number. So, I actually used an elevator pitched from somebody I was helping a couple of years ago who was doing the Dolphin Tank, which is Springboard Enterprise Platform and she opened up with 70% of all middle-aged students are reading below average in scientific knowledge.
John:
I love what you just gave us, because grabbing someone’s attention, making sure that your pitch is memorable is one of the keys to getting people to want to know more and if you don’t have one of those three things in your tool box, whether it’s the three ‘did you know’ questions or an analogy, we’re the Expedia of XYZ or we’re the Uber of XYZ or opening up with a number. The number example you just gave I love because not only does it grab your attention but it also describes a huge problem at the same time, so if you can do two of those concurrently in one sentence, you’ve really achieved a great opening. That’s really wonderful Geri, thank you.
Well, let’s dive into your expertise into equity crowd funding and how VCs look at that and just for the people who are listening trying to decide if they should go right for angels or should they start with equity crowd funding.
Geri:
So, equity crowd funding is angels. So, what is now approved by the FCC is title 2 which was enacted in September 23rd, 2013. So, we’re coming up on the two year anniversary and it’s actually not taking off. Only a small percentage of money that’s raised from angels is being raised on equity crowd funding. So, despite the fact that it streamlines and it centralizes the process for both the angel and for the entrepreneur, very people are actually doing it yet.
So, you’re still going to the accredited investor, that person who either owns $200,000 individually or has a million dollars in assets in addition to their home. What was also approved this year was title 4, which allows you to raise sort of a mini IPO offering, so there’s two tiers to that and you can raise money from average Americans, so you don’t have to be an accredited investors and there were two tiers where you don’t have state preemption, which means you have to go state by state and register your offering. The benefit of that particular tier is that you don’t need a lot of financial reporting.
The second tier, there’s much more financial reporting and in that case the states have a coordinated review process. So, it’s just one application and you’re getting approved and then individual states nearly 30 of them have enacted interest state rules, because it’s been taking so long for title three to get approved, which is aimed at the average American. So, one of the things I really like to advise people right now is to work with a securities law firm. I think that’s really critical is to have that right professional advisor.
John:
Got it. That’s great advice that you must have the right advisor so that you don’t make any mistakes and speaking of a great number. I know in the number of an article you wrote about the misconceptions about equity crowd funding, you talk about it’s only 3% of the population that qualifies.
Geri:
So, yeah, it’s 3% of the population who would qualify with that amount of wealth and it’s also only 3% of accredited investors who actually become investors. So, angel investing isn’t for the faint hearted. There’s a lot of risk to it, but there’s also a lot of reward in addition to the potential of making money.
John:
Do you find in this 3% that are angels are really interested in helping people build their business and not just give them money?
Geri:
So I think there are two types of investors and sometimes both types of investors are located in the same person. Some investors have split personality. I interviewed Elizabeth Kraus who is running MergeLane, which is an accelerator for women-led companies based in Colorado and when she invests, she will invest larger amounts of money in the offline world where she gets to know angel investors, but she likes to diversify her portfolio and invest alongside a well-known investor through a syndicate, through a equity crowd funding platform so she can invest alongside, I’m trying to think of some of the names, Tim Ferriss, Jason Calacanis, Brad Feld, and it’s a quick way of diversifying her portfolio, but those companies she’s not providing a lot of mentorship to. So, certainty her companies in her accelerator program and the other investments that she’s made that are going to be more substantial.
John:
So, it depends. You can have a split personality and say, you know, there’s certain people I want to mentor and go through an accelerator program and others probably don’t need my advice. This is just a good investment and I respect the other people that are part of the round, basically.
Geri:
So, it’s funny, I also just published today on QuickBooks I talked about a Shark Tank episode, actually it’s probably a couple of different episodes because it’s two different entrepreneurs. One entrepreneur really wanted and was perfect for Lori Greiner is really a hands-on angel investor. The other entrepreneur really was so driven and had so much game, he didn’t need as much attention and was much more independent and he was perfect for Robert Herjavec.
John:
That’s great. There’s somebody for everybody.
Geri:
There is. So, I think it’s an internal process that you have to ask yourself as to whether what you want out of a relationship with an investor.
John:
Right and also regardless of how involved they want to be, I keep hearing and I would love your opinion on this; they still want the founders to be coachable.
Geri:
It’s funny that you bring that up. I forget to mention that in the beginning.
John:
We’re in sync. I love it.
Geri:
We are. We are. I don’t think, there are a very people I think that would disagree on that. If you’re going to give money to somebody, you want them to be coachable. They don’t have to take every piece of your advice, because you want them to be leaders and you’ve given them money and you have faith in their ability, but you don’t want somebody that’s going to run off and not listen to advice.
John:
You have on statistic in your quick book article where you talk about women entrepreneurs are twice as likely to seek money offline from angels (36%) than publicly online according to Center for Venture Research. Do you have any ideas as to why that is?
Geri:
So that’s a really interesting question and I’m going to give two answers here. One is that women have the skills to succeed at equity crowd funding. There’s research out there on the success rate on women versus men at reward based crowd funding. So, there’s a similar skill set involved in reward based crowdfunding as well as an equity crowd funding and I think those skill sets are absolutely transferable. Women out perform men at reward based crowdfunding.
John:
Ah. Earlier when I said equity crowdfunding I meant to say reward crowdfunding.
Geri:
No, no. You had the right statistic and that was an equity statistic. Actually in any of the articles that I sent you from QuickBooks, I don’t think that statistic is fair, but this was an analysis that was done of KickStarter campaigns. With equity, there are a lot of misconceptions about equity crowdfunding and the misconceptions are coming from professional advisers from lawyers and accountants and women really rely on their professional advisers and if they say, you know what, I don’t think you should get involved and women don’t.
Now I’m doing generalizations that are not completely true, but you know, some women are raising money, but a lot and this was part of my research, I was very surprised that some very sophisticated women including a female entrepreneur who is a lawyer was sitting on the sidelines because a lawyer friend that she knows in a really, really big law firm told her that they were gray areas and when she ticked it off, every single thing I said not true, not true, not true.
John:
It’s almost like going to a doctor and taking what they say as gospel and not getting a second opinion.
Geri:
Yes, yes, and it’s also getting the right second opinion. So, it’s really, it’s not just any small business lawyer that has the expertise here. It’s lawyers that specialize in security law and in particular the jobs act. So, it’s very, very specific. I think overtime more and more lawyers and accountants will understand this, but it’s very important to have that right lawyer on your team.
John:
Great. One more quick question for you about this, which you wrote, which I think is so fascinating is, major companies like Coca Cola and Nike are using crowdfunding platforms not just to raise money but to gain insights into consumers. So, founders can do that same thing before they seek angels, right, to get some proof of concept and all that good stuff. So that’s full circle from what I was saying the different between should someone start with just basic crowdfunding platforms for research and proof of concept before they jump into talking to angels and if big companies are doing it, it certainty makes to me and I think you agree based on what you wrote that founders should do the same.
Geri:
Absolutely. So, I think rewards based crowdfunding is a fabulous stepping stone into equity. Number one, you get to test your social juice and whether you have the right skill set and you’re testing it in a much smaller environment, a more low risk, so in my research Stand Out from The Crowd: How Women and Men are Benefiting from Equity Crowdfunding. I do a whole chapter on this and I talk about two women entrepreneurs who did first reward-based crowdfunding and one was real blend foods and she did I think a reward-based crowdfunding campaign that was $10,000-15,000 and went on to raise either $700,000 or $800,000 in offline angel investments and then I’m forgetting the name of it, I think it’s Bubble Root. Bubble Root and she raised, again, $10,000-$15,000 in a reward-based campaign and then went on to raise money through on a crowdfunding platform but privately and she raised I think $30,000.
So, people are combining it and it works well and there are lots of other examples of people doing that and I’m now, it’s not in the research, but it’s in a webinar that I did. So, other examples are other machine company and things that did reward-based campaigns and then went on to raise multiple million dollars from angels in the offline world.
John:
So, there’s no stigma attached to doing it any way you can to get your proof of concept and it actually possibility shows more creditability and the more credibility you have the lower the risk is perceived so I think it’s great what you’re doing with your research. You also, I can’t let you go without talking about the book you wrote Forget the Glass Ceiling. I want to ask you about that book and if there’s any other books that you think entrepreneurs trying to make a successful pitch should be reading.
Geri:
So, Forget the Glass Ceiling: Build a Business Without One profiles ten women entrepreneurs and what I love about the book is the three most successful women in the book actually didn’t raise on penny of outside funding. So, my favorite and I happen to reconnect with her a couple of months ago, Nina Vaca of Pinnacle Technical Resources and I think I lied. She may have raised $300 on outside funding.
John:
Okay. No one is going to look at that.
Geri:
Yeah, exactly. Exactly. She is the number one company on Women Presidents Organization fastest growing company list. She also will -either this year or next year- be a billion dollar business.
John:
Oh great. I’m sure that’s a wonderful book. I love the title. Forget the Glass Ceiling: Building a Business Without One. Are there any other books that you have found inspiring or useful all about investing or not?
Geri:
There are a ton and actually one that I’m going to recommend and this is, we talked about knowing Judy Robinett.
John:
Yes.
Geri:
She introduced me to Laura Rittenhouse and she did a book on investing between the lines and what I like about the book and I think this is going to resonate with you as well is she talks about, she’s really talking about public companies, but everything she says is applicable to startup companies. So, companies that are raising money from angels and she talks about speaking in plain English, being trust worthy, as critical factors in trusting a company to invest in. So, she’s actually analyzed public companies and finds the most transparent companies are the companies that are more likely to do well.
John:
I like that. We’re going to tweet that out. The most transparent companies are the ones that are most likely to do well. That’s a great line. Geri, how can people follow you on social media if they want to engage and get more of your incredible research or hirer you to consult with them like you have for other major brands like Dell I know and other incredible companies that have been lucky enough to have you. Tell us how they can find you?
Geri:
Absolutely. So, on Twitter it’s VentureNeer. I write on a weekly basis on Forbes. You can just search my name, Geri Stengel, better yet, subscribe to my newsletter on my website and then you’ll get all of my articles whether it’s Forbes or QuickBooks or Turnstone and each area I’m specializing or for each company I’m specializing in different areas. So, I’m writing about the success factors of women entrepreneurs in Forbes, financing in QuickBooks, and just general startup culture for Turnstone.
John:
Fantastic. We’re going to put your book and the books you’ve recommended as well as the link to your site so people can subscribe to your newsletter in the show notes. Geri, it’s been a pleasure having you on the show. I can’t thank you enough for all these insights and your expertise is clearly something that your introduction, you really combine being a serial entrepreneur, teacher, and someone who is making a difference with social impact.
Geri:
Terrific. Thank you so much for having me. I so enjoyed our conversation.
John:
So did I. Thanks Geri.