Triangle Tweener Talks

00:00:04 - Announcer
Welcome to Tweener Madness, the high stakes startup showdown where eight promising companies go head to head for a $25,000 investment prize from the Triangle Tweener Fund. But before the competition kicks off, let's meet the people making the tough calls. The judges. In this special Meet the Judges episode, we're sitting down with the investors and industry leaders who will be asking the hard hitting questions, evaluating the startups and ultimately deciding who moves forward in this bracket sty competition. Each round, three judges will vote on which startups advance leading up to the finals in early April, where one company will take home the top prize from the judges. You'll hear about their backgrounds, what they look for in a winning startup, and maybe even get a little inside scoop on their decision making process. So if you're a founder looking for investment, an entrepreneur curious about what investors really want, or just someone who loves a good business battle, you are in the right place. Let's meet the judges. Here's your host, Scott Wingo.

00:01:06 - Scot Wingo
Hey, everybody. I am joined by Robbie Hardy. She has graciously agreed to be on our illustrious selection committee for Tweener Madness. And we're excited to have her expertise and she's done a ton of angel investing and she's going to give a quick background. If you're interested in learning more about Robbie, we have a really deep podcast that we recorded recently. Robby, thanks for doing this.

00:01:30 - Robbie Hardy
Thanks for having me.

00:01:31 - Scot Wingo
Yeah. So walk people through your experience as an angel investor. How did you get drawn into this and what are you kind of up to these days?

00:01:39 - Robbie Hardy
So I got drawn into it. I. When my first, when I became an entrepreneur, I thought I knew everything about investing because I'd been doing M and A in the corporate world. But of course I soon realized that I didn't. Then I raised money and sold the company. I still thought I knew. And then I did my first investment and I had no clue what I was doing. So that was in 1995. And I've been an angel and sometimes venture investor since then and, or been in a venture fund. And so I, you know, have a lot of passion for startups. I coach and mentor them. You know, I'm an author, I'm an investor, I sort of do a lot of things and I'm very passionate about women and I was always the only woman in the room. So I thought, and particularly when I got into investing, I thought it was time for me to change that. So I tried to do it in 2020, unsuccessfully, because it was too early. And I finally did it in 2019 and started Accel Ventures, which is women angels investing in women founders. The difference is this is a debt fund, not an equity fund. So it's smaller amounts of money to take people over hurdles that happen where equity is probably not the best solution.

00:02:53 - Scot Wingo
Awesome. And those guys have been chugging away and they've been at it, you know, since you started in 20, 25ish years now. Yes.

00:03:02 - Robbie Hardy
A year as a network and then became a fund.

00:03:04 - Scot Wingo
Right, okay, got it. Yeah. And then is it like a fund one, two, three, type of a setup?

00:03:09 - Robbie Hardy
It's about to be fund two. Okay. You know, it's gone slowly because women like to know what they're doing. They don't like to jump in to a pool with no water. And so they really have been learning and growing along with the founders. And so it has moved along and done well.

00:03:28 - Scot Wingo
Excellent.

00:03:29 - Robbie Hardy
Yeah, yeah.

00:03:29 - Scot Wingo
And then what is the sweet spot? Is it like what we would call pre seed or seed or.

00:03:35 - Robbie Hardy
Well, it's debt. So it's. Can you pay it back? You know, the way that we do. You know, I've done equity for so long the way we do due diligence is much different. But I mean, a lot of it's the same, but it's really about cash flow and opportunities or contracts, et cetera. And sometimes it's for funding things. Like I could buy, you know, 5,000 or 50,000 boxes if I had $50,000. Otherwise it would cost me $50,000 for five. So it's getting that, you know, increasing their margins. So it's, you know, it's a big variety of a, you know, a bourbon company to somebody doing. Having a cleaning company. I mean, it's, you know, it's very varied and the. But there it has to be a woman founder. And you'd be amazed at how many non women founders apply. I know. Who knew?

00:04:26 - Scot Wingo
Yeah. Yes. Easy criteria set there at the top to see. Yeah, we get a lot of non triangle people that want to.

00:04:32 - Robbie Hardy
Yes. And so it's really, I mean, you know, while it's, you know, they have to have revenue and they have to have a way that we can see that. Because what we don't want to do is put a burden on them. Buy they think they want, you know, $100,000, but do you really want that burden versus maybe only 50,000 then if that works, then we, you know, can up it. So it's also, you know, helping them manage cash flow. That's not equity that they have to pay back.

00:04:56 - Scot Wingo
Yeah. So by definition, with that model, you're going to be a little bit later stage, definitely post revenue, probably post EBITDA to some degree because you're going to want not all.

00:05:04 - Robbie Hardy
Yeah, yeah, that's close.

00:05:06 - Scot Wingo
It's not going to be like burning a ton.

00:05:07 - Robbie Hardy
That's the plan.

00:05:08 - Scot Wingo
Yeah. And then maybe they actually haven't even had any traditional venture because they've been.

00:05:14 - Robbie Hardy
No outside money for the most. I don't think we've had any that have had outside money.

00:05:18 - Scot Wingo
Yeah. A lot of E commerce companies have this profile where they're really scaling and if they just had a little bit more to go buy that next pure product and get it cheaper or.

00:05:26 - Robbie Hardy
Exactly. And so we're starting to see more and more of that, you know, so, yeah, it makes sense. And you know, inequity is, you know, and we, you know, we're very competitive on. We don't gouge them on interest. There's no collateral. So, you know, we're, we, you know, it's risky, of course, as any kind of angel investing is, but we try to do a good job on due diligence and take it away.

00:05:49 - Scot Wingo
Yeah. And unlike traditional venture debt, they always come in with an equity round. So you're not, you know, under, you're not requiring an equity round, if I understand. No, there's.

00:05:56 - Robbie Hardy
No, no, there's no equity round. Because part of the reason for this is we think we found this sweet spot. It's been there for a long time. Just in particular, as you said, with more E commerce. And we're trying to get women who are not familiar with angel investing to understand it so that we can grow it and more. Because if women don't start becoming angel investors investing in women founders, then we lose all the women founders that do great things.

00:06:21 - Scot Wingo
Yeah. And the other thing to help folks that have never done angel investing understand is when you do traditional equity, you typically wait 10 to 12 years to get paid back, which is a long time. And then the, the other kind of crazy thing is you, you actually get, you get your losses first, right? Yeah. So you get punched in the face and then you have like a couple mediocre exits and then your big ones happen later.

00:06:43 - Robbie Hardy
Well, and you have to understand valuation and term sheets and. Yeah. I mean, there's so many things to understand that we take for granted because we've been doing it a long time.

00:06:50 - Scot Wingo
But yeah, and with debt, you get paid back faster. Right. Like you can already get some money.

00:06:54 - Robbie Hardy
So then we pay them back twice a year, whatever, you know, they get some money Back twice every year.

00:07:01 - Scot Wingo
Yeah. Very cool. Do you have a geographic focus or just all over?

00:07:05 - Robbie Hardy
They have to be in the United States.

00:07:07 - Scot Wingo
United States.

00:07:07 - Robbie Hardy
Okay. Most of them are here, but yes, they don't have to be here, obviously. It's the world different.

00:07:16 - Scot Wingo
Yeah. And then you've been doing your own angel investing for a while. What, what are. What's a. You know, a couple of your biggest successes that you've had.

00:07:25 - Robbie Hardy
Well, one of them was Channel Advisor. You might be familiar with that. So I was in some triangle angel groups, which is how we got into Channel Advisor. And then I raised an angel group. And so there were some great successes out of there and some of them are a ways back and I was going to kind of go through. But Channel Advisor is a great example of a great exit and multiple ways that that worked itself out. So I do think that that should be a case study of what is it like to invest in. And I know you know, it's equity, so it's longer, but it was a very interesting ride. And I'm not trying to butter you up.

00:08:05 - Scot Wingo
Yeah, buttering up is always appreciated.

00:08:09 - Robbie Hardy
Yeah. Okay. Well, anyway, when I thought back of it to it, it really came to mind because of how it all, you know, unfolded.

00:08:16 - Scot Wingo
Yeah. And then do you have any. Some people have this anti portfolio so like some that they missed. Do you have any that you missed back in the day that come to mind?

00:08:25 - Robbie Hardy
You know, I don' that very often one that I. I've looked at. I mean, obviously we all have them. And one. Another one that came to mind is Spoonflower. Kind of. It was like, I mean, who wants to do? I mean, I just kind of poo pooed it and it was so awesome to see it. You know, it struggled, but it found its place and did well. So that was nice.

00:08:44 - Scot Wingo
Yeah. That was digitally printed fabric and then ultimately sold to. Not StubHub. That's the wrong company. It'll come to me in a minute. But. Michael Jones, Shutter. Shutter Fly.

00:08:56 - Robbie Hardy
Shutter Fly. Right.

00:08:57 - Scot Wingo
Yeah. Anyway, between the two of Sword Shutter, something right for. For a really nice exit. Yes. That. That ended up being a good outcome. Awesome. So you've seen probably thousands of pitches at this point, maybe more.

00:09:10 - Robbie Hardy
I have seen them from my own investing and from judging and because I've been coaching for almost 30 years. So yeah, I've seen a lot.

00:09:18 - Scot Wingo
Yeah. We could probably go an hour on. On pitch coaching. But what are like some of the Robby Hardy three bullets of do's and don'ts.

00:09:27 - Robbie Hardy
Tell your story. Don't try to figure out what you think I want to know or what. Whoever the audience wants to know. I mean, obviously, there's some basic things that I think everybody gets. But trying to research the investor to figure out what it is you think they actually want to know in that first pitch, they want to hear your story. Second thing is, if it's technical in nature, and I tend to invest in all that, don't tell me how you coded it. Tell me what it does and why it makes sense. Getting sort of in the weeds of the how to. And I know people spend, you know, hundreds of hours doing this, and so they want to share that. That doesn't move the needle I need. Because you don't have that much time. So it's using that time wisely. And, you know, and do your homework on your. On whatever you're presenting. Make sure you've made those spreadsheets, make sure you know exactly. So you can answer questions and not say, well, I don't know, I hired somebody to do that. And I don't really know how that works. And so, you know, knowing all. Knowing what it is you're presenting and not presenting somebody else's information or that someone prepared for you that you didn't really. Which you weren't really involved in until you get much further down the line.

00:10:41 - Scot Wingo
Yeah. So don't show the finance slide and be like, oh, I don't know where any of these numbers come from.

00:10:45 - Robbie Hardy
And so they start out right? Exactly. Tend to invest early. So, you know, when you're further down the line, it's different.

00:10:51 - Scot Wingo
Yeah, absolutely. Awesome. Well, thanks. We appreciate you being on the selection committee. We'll see you live in the studio when we do that. Any last tips that you want to give to some of these founders that.

00:11:01 - Robbie Hardy
Are going to be, you know, just, you know, you're excited, it's your baby and just, you know, showcase, you know, the problem it's going to solve and how flexible and able you are to make it work. Because being able to, sometimes you have to pivot and shift gears. And so, yeah, that makes a big difference also.

00:11:22 - Scot Wingo
Awesome. Thanks, Robbie. That's great advice and appreciate you taking time to do this and we'll see you live in the studio for the competition.

00:11:27 - Robbie Hardy
Thank you. Nice to see you.

00:11:34 - Announcer
That's a wrap on this meet the judges episode. Now, you know the minds behind the decisions, the investors and industry leaders who will be putting these startups to the test as Tweener Madness kicks off, they'll be asking the tough questions, making the tough calls, and deciding who advances in the bracket, all leading up to the finals in early April. Make sure you're subscribed so you don't miss a single matchup. And if you want to follow along with all things Tweener Madness and the Triangle startup scene, head on over to tweenertimes.com also, if you're thinking about launching your own podcast or want to bring professional production to your brand, check out earfluence.com the competition is about to begin and we'll see you soon in the next episode.