Friday, January 27, 2023

xElle angel fund has women supporting women

By David Ranii

Jennifer Turnage
[/media-credit] Jennifer Turnage co-founded xElle Ventures, a new angel fund that invests in early stage North Carolina companies led by female entrepreneurs.

A community of women supporting women. That’s the thinking behind xElle Ventures, a new angel fund created by women in the Triangle, Triad and Wilmington areas to invest in early stage North Carolina companies led by female entrepreneurs. Believed to be the first of its kind in the state, three of its 14 co-founders include:

Robbie Hardy, chair, serial entrepreneur, veteran angel investor and founder of Empowering Women Together, an organization for female professionals;
Dina Coker, vice chair, founder and CEO of Blink, a Greensboro marketing agency;
• Jennifer Turnage, chair of the screening committee and co-founder and CEO of myBeeHyve, a network-marketing software company based in Wilmington.

The conversation was edited for brevity and clarity.

Why is xElle Ventures needed?

Hardy: [Women make up] more than half the population. We own millions of businesses. But [women] get 2.2% of any money that comes into startups. So that basic need is why we [founded the fund]. We also did it to expand the number of women who are willing to invest their own money [in startups].

Coker: [We’re really] trying to raise the level of wealth for women on both sides of the table.

Tell me your origin story.
Hardy: I tried to do this in 2000 and was not successful. We ended up with The Atlantis Group with 70 men and six women.

In February, I sent an email to about 23 women and said, “I think it’s time to do this. You may recall that I tried to do it before. Are you interested in getting together and exploring this possibility?” We had our first meeting in March, and 15 showed up.

Are there any women-investor networks elsewhere that xElle Ventures is modeled after?

Hardy: There are women funds, and there are women networks. [By offering debt instead of equity], we are different — I can’t find anyone else that is doing what we’re doing, though that doesn’t mean that it doesn’t exist.

Why focus on loans? What are the advantages?
Hardy: Number one, it’s simple. So, if you’re new to this, you understand it. It’s short-term — one to three years. It’s an interest rate of 8-10%.

Turnage: The biggest thing I hear from more traditional angel funds is their members are frustrated by how long their capital is tied up.

Are there advantages for the entrepreneurial companies?

Hardy: No dilution in their capital structure. We don’t take any stock. There’s no pressure to exit.

What types of companies in particular will be your investment targets?

Turnage: The companies that we want to invest in are companies that we can help. So one of the elements is going to be, do we have a member whose expertise is relevant to that business?
How do you define a woman-founded business? If two men and a woman form a startup, does that qualify?

Hardy: We want the woman to have majority ownership, authority and responsibility for the business. Now is that hard and fast? That’s a guideline.

What size loans are we talking about?
Hardy: $20,000 to $100,000.

Is that enough to move the needle?

Coker: It can move the needle, [and] not just because you’re providing some financial help. We’re also providing … guidance. Depending on what the company is, you might just need something short-term. But you also might need a heck of a strong network, [and] we’re now fulfilling that need too.

Hardy: It will help people that can’t get $20,000.

How will you make investment decisions?

Hardy: We’ll do the normal screening/due diligence process.

Turnage: And then, the entrepreneur will be able to present to the full membership. At that point, it’s an individual decision as to if they would like to invest and how much.

How many women attended your initial information session for potential investors in August?

Hardy: There were 55. I think we’ll be at 40 or 50 [investors] by the end of the year. We’re not trying to grow fast. We’re trying to get it right.

How does one become an investor?

Hardy: We have to screen every member. It’s invitation only. We don’t let just anybody in. You do have to be a woman.

What is the buy-in required of investors?

Hardy: It’s just a membership fee: $500 annually.

What is the time frame for your first investment?

Coker: I would be very surprised if we didn’t [make an investment] by the end of the year. But who knows?

What else would you like to share about xElle Ventures?

Coker: This is something that we’re very proud of. This is something that doesn’t exist.

Hardy: We want it to be able to be repeated. We need this in Wilmington. We need this in the Triad. We need this in a lot of places. ■

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