Make Investing Meaningful | Deborah Jackson
Conversation with Deborah Jackson, Founder & CEO, PlumAlley.co
March 20, 2019
1. What is your business?
I’m the founder and CEO of Plum Alley, a firm that gives our members the opportunity to invest in early-stage STEM companies founded by women and gender-diverse teams. We form syndicates of investors to invest in companies that have invented game-changing technologies and medical breakthroughs. We focus on the Series A funding stage because we have found that while there is a considerable amount of capital for seed investing to help get companies started, the A round offers more return and it is where women founders have a harder time accessing capital.
We are different from a lot of investment firms because we see investing as more than a transaction. We bring inspiration and emotional connection to a field that has been pretty staid. It’s really exciting because we solve two related problems at once:
One, we invest our capital in line with leading research that proves the diversity of founders brings better group dynamics, decision making, and outcomes. We see this proved out every day in our own company as well as in the companies we fund.
Two, we’re getting women investors off the sidelines with their own capital, supporting visionary women founders, and we’re giving our members the opportunity to create the future they want.
For most people, investing is like paying taxes—something annoying that has to get done. When it comes to investing, most people outsource to either a firm or third party that chooses the investments and those investments may not reflect the person’s values. Plum Alley solves this problem for a portion of our member’s investable assets. We provide our investors with the way to invest in what matters to them in addition to having the chance to make outsized returns.
Before our members see the companies we bring forward for investment, our Plum Alley professional team does a lot of work behind the scenes. We source the companies, perform diligence on the technology, founders and business models, and, then once we believe there is a great opportunity for growth and success, we bring the company forward for investment.
Our members get to do the fun part which is asking questions and learning about the technologies. They get the decision-making power to invest in what they want, and their money is pooled with other members of Plum Alley who have also chosen to invest.
2. Have you been able to grow professionally? What tools have you used?
There aren’t too many resources for founders that I found useful. That is because most blog posts or books are written by male founders after they have been successful. I find their stories detail successes rather than lay out the difficulties or lessons learned along the way.
I learned the most by analyzing and investing in other early-stage companies. One of my biggest lessons from backing start-ups is taking to heart that it is OK for something not to work; you just go back to the problem again from a different angle the next day.
3. Was outside funding/cost a challenge to getting your business off the ground?
In the early days, Plum Alley was self-funded because I had to pinpoint the company’s value proposition. I wanted to make sure I was clear on the best business model before I sought outside funding. Plum Alley raised outside capital in two rounds for growth and working capital, but I have also found that having raised the capital validates my intuition and the business potential.
It was odd to be on the other side of the table for a change and in raising capital and not sitting as the investor. But it was also really insightful and valuable to be in that role. After hearing so many company presentations in the pursuit of raising capital, I know that the best way to explain an opportunity is not formulaic, but rather by painting the picture of your vision.
The most inspirational founders are ones that can see something that other people can’t see. When someone is a true believer then it’s like magic happens at the company, and they’re able to overcome significant challenges.
4. What are some successes you have had with your business that make you proud?
I would say attracting a team that believes in you, the mission and who will give you much more than they are paid. Three years ago, Andrea Turner Moffitt joined me as a co-founder of Plum Alley investments. It is a pleasure to have a senior person who is as committed as I am to advancing both women founders and investors.
Together, we have built the Plum Alley membership model in 3 years to great success, and now we are expanding to have institutions, not just individuals, as clients.
I’m also proud of how we’ve engaged women and men around investing. That has been no easy feat, and I credit a lot to Andrea who did the research that guided how we changed the investing experience.
Last month, I was attending a dinner with our top-level members, and I stepped back to notice that the entire room was deeply engaged in discussion around investing in new technologies, market adoption and considering risk factors in relation to return. I thought, “Oh, my. Here it is. I never heard a conversation so animated and excited around investing. Ever.” I was able to enjoy a moment of accomplishment and deep satisfaction.
5. What are some of your current challenges?
Saying no. We can’t do it all, and we cut back all the time. There is no way an early stage company can execute well on all the opportunities. My priority right now is to be self-sustaining, so every expenditure has to tie to revenue generation.
Before I was laser-focused on revenue generation, I invested time and capital into new activities that had “potential” or could lead to other opportunities. But no longer. I’ve done a ton of experimentation, and I am clear on our business model and what it will take to generate the profits and be self-sustaining. I would not say it was a direct path, but we have reached the destination.
When we started Plum Alley, we only offered one membership level. We now have four membership levels to account for the broad benefits we can offer our members, and we track what it costs us to deliver an exceptional experience. For instance, we know the cost from start to finish to source, diligence and invest in an early stage company.
6. What are your biggest sources of inspiration?
Nature. Being in nature, out of the hustle of the city helps me clear my mind and it allows me to dream, and new ideas come in over a calm sea. And that is inspiring to me. When I actually slow down and give myself a breather, I have all the inspiration and energy that I need.
7. What are some of the biggest positive or negative surprises in your business?
One of the greatest surprises is how much I enjoy working in an inter-generational company. I learn every day from the young people in the office. We have broad perspectives represented on our team with diversity of age, gender, race, background, nationality and more and that makes us better in all ways.
Another surprise has been how much it turns out I know about business and life! It strikes me that any member of my team can ask me a question regarding life challenges, and I know exactly what to say or do. It really is true that longevity brings a kind of wisdom that can help others.
8. Is your business impacted or helped by government regulations?
Yes, we have to comply with regulations because we form syndicates to invest and we have to get verification from our members who invest that they are “accredited investors” as defined by the SEC.
9. Do you use social media for marketing your business?
I was an early adopter of Twitter, but lately, I don’t have the time to keep up anymore. I want Plum Alley to have a presence on social media, but it is not easy to outsource or to find a person who has the right voice or depth of experience to represent our brand.
At some point, I’d like Plum Alley’s social media to be a place where we initiate serious conversations about investing in a new way. I want us to be a thought leader, engage new investors, and help bring along exciting new technologies. We are exploring how best to do this.
10. What are your hopes for your business for the next five years?
My vision is that through Plum Alley we have invested several hundred million dollars in great businesses, and we will have achieved top tier investment returns. The good thing about our business is that you can measure the results. I am excited to be able to point to quantifiable results to prove out my thesis about women founders, women in the STEM fields and women investors.
I also believe that we are investing in great companies that will ultimately be the next generation of leaders in the world. I’m looking forward to seeing that.
Date of conversation: February 25, 2019