5 1/2 Questions for Marianne Hudson

Marianne Hudson

Founder, Executive Director Emeritus — Angel Capital Association

Ms. Hudson leads the Angel Capital Association (ACA), the world’s leading professional and trade association focused on fueling the success of accredited angel investors and portfolio companies in high growth, early-stage ventures. ACA provides professional development, public policy advocacy and significant benefits and resources to its membership more than 13,000 individual accredited investors throughout North America.

Ms. Hudson led the angel initiative at the Kauffman Foundation and also oversaw many of the Foundation’s entrepreneurial education and mentoring programs designed to ensure that more entrepreneurs develop sustainable, innovative businesses.

An angel investor herself, Ms. Hudson is a member of the Women’s Capital Connection and Mid-America Angels in her home base of Kansas City. Ms. Hudson has worked in the entrepreneurial support field for more than 25 years.

She holds a B.A. in Economics and Political Science from the University of Kansas and an M.A. in Public\Policy from Rutgers University.

https://www.angelcapitalassociation.org/mission-and-leadership/

5 1/2 Questions for Marianne Hudson

1 — What aspect of business has changed the most, since you started?

In the field of Angel Investing, I got involved in the early 2000’s and, you know, it used to be that I was one of the very few women in the room. It was very much a white man’s kind of game. And, I think we found that it was like 5% of angel investors were women. And look at it now — women are like 1/3 of all investors. And then that also means that it’s very different than venture capital. We’re also seeing more women led companies are being funded and there’s a correlation between the two. So, that’s pretty exciting. And, I think now I’m seeing more people, focusing on people of color as both investors and entrepreneurs. There there’s more work to be done there, but, you know, I really see a difference.

And if I’m allowed to say a second one — there’s just so much innovation in the field of angel investing. There are a lot of people who are entrepreneurs or think entrepreneurial like me, so they they’ve figured out whole new ways to invest: Doing things online, and, like angel list and things like that — changing the terms and, and just how deals come together. Just a lot of focus now on different kinds of companies and funding them completely differently — and more and more people are open to those ideas.

2 — What’s the best thing that’s happening in your industry today?

Again, I want to say two things, because one, we want to address the pandemic. Because when the pandemic first came down, there was a lot of concern and uncertainty that entrepreneurs could be funded. There was just a ton of focus at first on “how do we make sure that our portfolio companies are really supported with money, advice and experience” and all the things angel investors can provide them. But then there was a lot of comfort in expanding that to funding a lot of new entrepreneurs who are really figuring out the opportunities of the pandemic. And so there really wasn’t expected. There was actually an expansion of the number of deals and the dollars invested by angel investors. The other thing that I really see a lot is syndication. So if you’re investing through like an angel group or angel list or whatever it is, we’re seeing that 75% of the deals are done by multiple organizations. They’re finding out how to work together. It shows that the angel capital association is really helping build relationships and processes for the investors to work together. And that’s really, you know, ensuring that entrepreneurs are getting the money they really need instead of small little investments.

3 — When was the last time you built something or created something you were proud of?

So I don’t think this was the last one that I did — but it’s the one I’m most proud of.

Back in 2010 there was legislation that was about too big to fail. It was called the Dodd‑Frank act. And within this thousand page bill was actually a change to the definition of who could be an angel investor — accredited investors. And that legislation had the unintended consequence of wiping out the possibility of 60% of potential angel investors and 30% of the members of the Angel Capital Association. It was a very existential threat. And so, we had never come together to be public policy people, but this was something we really needed to address. So, we worked a lot with the sponsors of the bill. We negotiated. We even got the Wall Street Journal to put an editorial out that talked about the importance of angel investors to startups and to the the economy. And so we were able to get what’s, what’s called the Angel Amendment to the Dodd‑Frank act done. It was bi‑partisan — 10 senators — who restored the accredited investor definition for net worth and wealth to what it still is now. There’s still always fights to keep this going, but I think that made a huge impact on the field of angel investing and, and the startup scene.

4 — When were you most frustrated by someone or something in your career?

So my second position was in economic development. I came in as, you know, kind of a, starry‑eyed probably naive person about, public policy and politics. What I really learned wide‑eyed, was that some policy‑making, is not about doing good and having a lot of impact it’s if there’s money involved. There’s a huge fight for the money. So, I led an effort — I was in my mid- twenties — and I led an effort to, put together, a grant proposal that would support manufacturers to help them be more efficient. And we were successful in getting a $13 million grant to start this. And, it gathered a lot of media attention because — Senator Bob Dole announced it — and things like that. So what happened then was we were trying to get started and everybody came out of the woodwork to just fight for this money. Other agencies wanted it. I saw Senators and Legislators at the state level fighting over it and just doing devious things.

And here I was, I was planning to have a career — I even went to get my master’s degree public policy. And so how did I not understand this? But I really got it. And so it changed my whole career trajectory, because I didn’t want to be with policy anymore. I wanted to do good. And so I, I kind of liked that it happened because I like what I [ended up doing] in my career. And I loved working at the Kauffman Foundation, and I loved leading the Angel Capital Association. And I wouldn’t have done that if this [frustrating experience] hadn’t happened.

5 — Who is an entrepreneurship leader that you admire, and why?

You know, there’s so many, but I’m going to mention a man named John Huston who passed away in January. He was the founder of the Ohio Tech Angel fund and really the whole angel ecosystem in the state of Ohio. He was also the Chairman of the Angel Capital Association — who I consider sort of my, my boss, if you will. And, he just was a delightful human being. He was so smart. He was able to get hundreds of hundreds of angel investors in Ohio involved in angel investing. He really thought through best practices of being an angel investor and actually how to be an entrepreneur too. And he gave his time so much. He created, you know, all kinds of writings and speaking and educational content to help people be smarter angel investors. He was really known globally for his speaking and that kind of thing. He was just that combination of having a huge impact and just being an incredible person.

You know, and for his funeral, he attracted so many people and, you know, all kinds memorials have been created for him to [recognize his contribution to] American Angel economy.

and … the BONUS “Color” Question

5 1/2 - What Movie or TV show best depicts your industry and why?

Well, Shark Tank: I both love and hate that show.

You know, I don’t like its focus on drama and especially the competition between the investors. It’s just not like the healthy angel investing that I see. And I hate it to the point that I won’t even watch the show, but, you know, so many people watch it. It’s created some understanding of this type of funding of startups. My mom now kind of semi understands what I do. And I found when I went into see staffers in Capitol hill, more of them had thought about Angel Investors too [because they watched Shark Tank]. So it’s easier for us to understand. I think that they’ve had some nice diversity in the sharks. And so I think that is interesting, and it’s brought more people to think about being angel investors.

I know that they’ve done some help for entrepreneurs. Mark Cuban has been really helpful. My nephew actually reached out to him when he was publishing a book and he actually got tips back on how to put together a media campaign to pro promote his book. So I know there’s some, some real help there.

[On a scale from minus 10 to plus 10, how realistic is Shark Tank — minus 10 being completely fantasy and plus 10 being a great example?]

You know, I give it a 2 or 3 — because they do go through some processes and they clearly must do some things behind the scenes that you don’t see on TV. So there’s, there’s real learning there. And I talk to people who really enjoy the show, and I can respect that.

[Do you have advice for a new first time entrepreneurs seeking funding?]

Read as much as you can because there’s some really good stuff out there. And there’s a lot of entrepreneurs and investors who’ve been through the process who are putting out really fantastic stuff to read, talk to as many entrepreneurs as you can, you know, go to the meetups and, you know, coffees and, and all kinds of activities that are going on in your ecosystems, because in the end you need to network as much as you can and learn as much as you can and make sure you do that before you’re raising money and make sure you find out ‘what are you’ and think through your goals and dreams and learn enough to understand what kind of funding is best for you.

For more 5–1/2 Questions Interviews, see:

“5–1/2 Questions” from CJ Cornell is a new series of mini-interviews with leaders in the entrepreneurship and innovation ecosystem around the world. In less than a half-dozen short questions, we’ll try to learn more about each leader, and what makes them successful and unique.

The questions are designed a little like a “Magic Eight Ball” (my GenX colleagues know what this is): A set of questions, posed at random. Plus, at least one question, or half-question, is designed to find out something about their personality that most people might never suspect (I mean expect).

CJ Cornell is a serial entrepreneur, investor, advisor, mentor, author, speaker, and educator. As an entrepreneur, CJ Cornell was a founder of more than a dozen successful startup ventures that collectively attracted over $250 million in private funding; created nearly a thousand new jobs; and launched dozens of innovative consumer, media, and communications products — that have exceeded $3 billion in revenues.

He is the author of the bestsellingThe Age of Metapreneurship — A Journey into the Future of Entrepreneurship.”

And the upcoming “The Startup Brain Trust — A Guidebook for Startups, Entrepreneurs, and the Mentors that Help them Become Great.”

Follow him @cjcornell or visit: www.cjcornell.com

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CJ Cornell

CJ Cornell

Professor of #Entrepreneurship & Digital Media. Serial/Parallel Entrepreneur, Author, Speaker, Mentor, Angel Investor, #VC. Crowdfunding & #Startups Evangelist