Kerry Ann Rockquemore is out to change the way you look at angel investors.
“When most people think of angel investors, they aren’t thinking of youngish women of color,” says Rockquemore, founder of the National Center for Faculty Development & Diversity in Detroit.
The numbers support her belief. Women make up only 22 percent of all angel investors in the U.S., according to a November 2017 study by the Wharton Entrepreneurship and Angel Capital Association. African-Americans account for an even smaller segment of the group, a mere 1.3 percent, according to the study.
“That feels like an issue,” Rockquemore says.
If change were to come to the angel investor community, Rockquemore felt she needed to do her part. Her research led her to Pipeline Angels, a national organization that seeks to open the door to capital, experience and mentorship for women entrepreneurs.
Mentorship is critical
“I’m not the kind of person who pretends that I do when I don’t,” Rockquemore says. “Pipeline Angels fit everything that I wanted. They do a really exhaustive training in which you learn by doing. The last piece of the training is your cohort hosts a pitch summit and you collectively invest in companies. Most important to me was that Pipeline Angels is equally invested in the mentoring and the investment. It’s not just writing a check.”
She describes the organization as “a squad of angels or mentors for entrepreneurs,” specifically those who may not have access to the support they need to get their business started.
“These are entrepreneurs who have a great idea, but are working in isolation,” Rockquemore says. “Pipeline Angels wants to be the friends-and-family round for people whose friends and family aren’t going to be able to support them in that way.”
Pipeline Angels can also bring needed guidance to help young entrepreneurs shape their vision and target markets that offer a better chance for success.
“A great idea is like an innovative, elegant solution to a problem that people already know they have,” she says. “They are already searching for a solution and they are willing to pay for it. The red flags are if you have a neat toy, software platform or device and it’s really cool, but it’s not clear what problem it’s solving. If you have to spend 10 minutes explaining what the problem is to me, it’s not a problem.”
Rockquemore has invested in six companies and the initial results are promising.
“There are 300 pipeline angels in the U.S,” she says. “The cohorts hold pitch summits all over the country. I can go to whatever pitch summit I want and invest in any of the companies that the whole network is looking at. So it makes it pretty easy for me to invest and meet the goal of investing in great companies. The goal for the organization is to increase the number of active angel investors who are women and people of color.”
Detroit has plenty of opportunity for fresh business ideas and the startup community has been showing signs of growth in recent years. But the activity pales in comparison to what’s happening near the campus of the University of Michigan, Rockquemore says.
“A lot of the angel investors and a lot of the money is concentrated in and around Ann Arbor,” she says. “It’s not a big surprise, a lot of startups happen in and around the university. Michigan is a particularly strong institution. There is a lot going on that isn’t quite centered in Detroit. There is some angel activity, but there could be a lot more.”
Anything that can grow companies and more importantly, create jobs in Detroit would be a huge win for the city.
“There’s increasingly some really interesting sources of funding,” Rockquemore says. “They tend to be really specific to Fontinalis, a VC that is very interested in the future of mobility. There is a focus on that. But frankly, there are a lot of other gaps that aren’t getting funded. Detroit needs jobs. The city needs jobs. People need jobs. Anything that is going to grow companies, large or small, moves us in that direction.”
Established business owners should take note of this work and do what they can to support its continued progress, Rockquemore says.
“It’s about mobilizing local capital, ways in which groups are mobilizing capital from angel investors into startups,” she says. “That should be of interest. It’s what’s actually going on on the ground. It should be of interest to people that there is a conscious and intentional effort to change the face of angel investing.”
It goes beyond merely creating diversity for the sake of diversity, she says. It’s opening the door to a relatively untapped resource of knowledge, experience and mentorship.
“This is a group of women with a huge amount of experience who have built their own successful companies and have a depth of experience and a wide range of networks,” she says. “To be able to utilize that as a resource is huge. We don’t always acknowledge how important mentoring is and how important all of these subjective connections are. But they can make a huge difference for a company.”