Democratizing Opportunities

This week StartWise had the pleasure to get some insights on crowdfunding and investing in startups from Hana Yang, co-author of “Impact With Wings: Stories to Inspire and Mobilize Women Angel Investors and Entrepreneurs” – a book about the potential of women’s economic influence; co-founder of Wingpact, a global angel investment and entrepreneur community; Tech and Venture Banker at First Republic Bank.

Some of our favorite quotes from Hana:

“Crowdfunding is not here to replace venture capital or angel investors – they complement each other.”

“I wanted to combine my entrepreneurial spirit and create change.”

“Democratizing (funding) opportunities was the passion and inspiration to write the book.”

The interview can be found below:

Everyone is talking about another bubble and lack of funding. Do you think that crowdfunding is going to save the day?
Hana – My take on crowdfunding, beyond the bubble, is that it is an alternative solutions that provides more opportunities for both sides – companies and investors. And that is what is so exciting about it – the idea of creating an alternative funding mechanism for businesses, entrepreneurs, and creating wealth. Crowdfunding is democratizing funding.

As an investor, how do you react when a potential startup has a successful crowdfunding campaign?
Hana – I see it as market validation, as in another data point in validation. I still need to see understanding of the product and conduct full on due-diligence as much as possible. A successful crowdfunding campaign doesn’t guarantee a successful business; the same goes for a failed campaign doesn’t necessarily mean bad business. Until recently, crowdfunding was not for all businesses and investor types – with the new rules we will see more innovative approaches to funding, new platforms suiting different types of businesses and investor profiles and new services that complement the crowdfunding industry. In any case, it is a great opportunity for entrepreneurs to seek funding and build a community around the company verticals, investors and entrepreneurs. Crowdfunding is not here to replace venture capital or angel investors – they complement each other.

How will you react now – with equity crowdfunding as an option? Will 200 non-accredited investors with small ownership of the company be a problem?
Hana – I don’t necessarily see it as a problem. The non-accredited investors will own too few to have a voice or decision-making power. Non-accredited investors might create noise, make the cap table complicated, but sophisticated investors can deal with it.

What types of businesses should go for equity crowdfunding?
Hana – Different crowdfunding platforms will be suitable to various businesses but mainly it may be an early stage play for companies seeking funding. I suspect we will see more traction in some lifestyle businesses and venture type businesses like hardware and consumer. But it will depend on the types of platforms that will come up and their vetting criteria.

You are passionate about creating impact, equal opportunities, supporting women entrepreneurs – what inspired you to this?
Hana – Always thought of myself as the underdog, so I wanted to go out and create opportunities for me and other like-minded folks in similar situations. I used to work in a crowdfunding startup and saw that women and Latinos were underrepresented in the startup space which also meant fewer (funding) opportunities for these markets – which is where crowdfunding may have an interesting role for these groups. I wanted to combine my entrepreneurial spirit and creating change. Democratizing (funding) opportunities was the passion and inspiration to write the book. Giving opportunity to others and crowdfunding are the focus of my chapter.

“Impact With Wings: Stories to Inspire and Mobilize Women Angel Investors and Entrepreneurs” offers the necessary tools and information for evaluating whether angel investing is an appropriate financial asset class for you. Whether you’re a woman who wants to tap into your previously dormant financial clout or an entrepreneur—of any gender—who wants to understand the huge potential of women’s economic influence, Impact With Wings will inform, educate, and inspire you.