An Interview With Marianne Hudson, Executive Director, Angel Capital Association (Part 2)

By guest authors Irina Patterson and Candice Arnold

Irina: How do you fund your organization’s work?

Marianne: It comes from a combination of membership dues, events and sponsorships. On the ACEF side, it’s a combination of a series of seminars and workshops that we do all over the country and grants from the Kauffman Foundation, as well as sponsorships.

Irina: What do you do day to day?

Marianne: There are no two days that are the same, but a lot of it is spent making sure we’re developing programming that has value to our members. So, that’s anything from helping put together a couple conferences per year to representing our members in Washington, D.C., watching what’s going on in Congress and in the administration, regulatory agencies, that kind of thing. Also, just working for ACEF, thinking through our educational programming and how we finance it.

Irina: What do you see as the key issue for seed capital today?

Marianne: I think that right now, for startup capital, there are positive things happening, and then there are issues that are more difficult for entrepreneurs.

The economy has a lot to do with that. We saw, for angel investing, in late 2008, all of 2009, and part of 2010 that angel investors were hit just as hard as anybody else. They lost a lot of their net worth, and it did become more difficult for them to make investments.

That meant that they were focused on keeping the companies they had already funded alive and growing. That probably made it more difficult for startups that were just getting started to get capital from angel groups. I think that’s changing as the economy gets better.

I see other types of innovative funding happening now. The crowd funding phenomenon looks like it has possibilities. You see work with accelerators and how they work with angels, family offices, and other types of private equity to make sure companies are getting funded.

You hear about really famous ones like TechStars and Y Combinator, but it sounds like there are interesting models all over.

We heard, at our annual conference, from the Founder Institute and other organizations like that. They’re doing interesting and amazing things.

That said, it’s probably still difficult out there. Entrepreneurs have to figure out where they’re going to come up with the capital, and certainly, credit and debt is difficult to get.

Irina: What do you think the government’s role should be, if any?

Marianne: Well, a couple of things. In terms of the funders’ side, interesting things happened when Congress passed the tax relief bill that continues capital gain rates at 15%, which I think was something that helped to increase angel capital.

They also extended the 100% exemption on taxes for gains for qualified small business stock. That’s capturing a lot of attention from angels. I think it really could add some capital there.

Other things . . . the government needs to just continue funding top research programs and make sure entrepreneurs have access to some of those programs, like the Small Business Innovation Research program.

They need stable regulations. Entrepreneurs and investors need to know that things are going to stay level and know what’s going to happen so that they can get started or make investments.

Irina: How do you work with your affiliates?

Marianne: They have many of the same benefits, so I would rather just focus on talking about what benefits we provide to everybody.

Our mission is to support the growth, financial stability, and investment success of our member angel groups and the angels who belong to them. So, we try to focus on things we think are important and add value to angels and angel groups.

[There are] a couple of things we focus on. One is networking and collaboration among our organizations. We try to make sure that we can build avenues for our members to get to know each other at events and in a lot of other ways so that they can share their ideas.

They can get to know and trust each other and start doing deals together. We don’t get involved in doing the deals; we just help them with best practices and getting to know each other.

This segment is part 2 in the series : An Interview With Marianne Hudson, Executive Director, Angel Capital Association
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