In the latest 20 minutes vc episode, the host discusses the evolving landscape of seed funding with John Borthwick from Betaworks company Happy and Erin Glenn, CEO of Choir, a platform that enables communities to invest in companies. They delve into the significance of the SEC's Jobs Act, which democratizes crowdfunding, and Choir's role in raising $275,000 for Gimlet Media. The conversation also touches on a Mattermark and Choir report on diversity in crowdfunding, revealing that despite high education and financial savvy, many are barred from investing due to accreditation limits. Erin shares her entrepreneurial journey and Choir's mission to allow venture-backed companies to raise funds from their community with a minimum investment of $2,500. The episode concludes with a quick-fire round, highlighting Erin's admiration for Tim Cook and her excitement for companies like Gimlet, Kano, and Jewelbots, underscoring her vision for Choir to transform financial services globally within five years.
"Choir is changing the way companies are owned and built. And joining us from choir is the CEO Erin Glenn, who prior to being choir was CFO at SF based video game maker Kixai, an investment banker at Morgan Stanley and UBS, and a management consultant in the US and Southeast Asia."
Erin Glenn has a multifaceted background in finance and gaming, bringing a rich set of experiences to her role as CEO of Choir, a company innovating in the field of company ownership and seed funding.
"Choir create a way for communities to invest and collaborate with companies and their founders."
Choir is a platform that enables community members to become investors in companies, fostering a collaborative relationship between companies and their supporters.
"I've been in love with New York City since I was a kid growing up in Oklahoma and came out here, started meeting with companies, met the Betaworks guys, and really fell in love with choir, which was alphaworks at the time."
Erin's entrepreneurial spirit and love for New York City led her to meet with Betaworks and ultimately become enamored with the concept and community behind Choir.
"So choir right now is an equity crowdfunding platform, and we work with venture backed companies to enable a portion of their raise to come from their community."
Choir offers a unique crowdfunding model where community members can invest in venture-backed companies, thereby participating in the companies' growth and success.
"Our minimum investment is $2,500. So again, despite the accreditation limits and the fact that only 3% of american households can invest, it is an approachable amount that makes it easy to support founders and then will support larger investments."
Choir sets a relatively accessible minimum investment threshold, but current SEC accreditation limits restrict the pool of potential investors.
"Oh yeah, I love Gimlet, too. And by the way, we recorded that podcast on my fourth day on the job."
Erin's early days at Choir were highlighted by involvement with Gimlet Media, showcasing the company's media engagement and highlighting the novelty of her position at the time.
"And I think the maturity of the uk equity crowdfunding environment has given the SEC some confidence that that's not going to happen."
This quote explains that the maturity of the UK's equity crowdfunding market has positively influenced the SEC's confidence in the system's stability and potential success in the U.S.
"So do you see any competition from other countries? Or do you think the regulation is such a barrier to entry for everyone."
Erin Glenn suggests that regulatory hurdles are a major concern for UK companies considering expansion into the U.S. equity crowdfunding scene.
"And the first is for your listeners who aren't familiar with Mattermark Mattermark's CEO, Danielle is also a woman."
Erin Glenn highlights the gender diversity issue in tech and investment, noting the low percentage of women and minorities among investors despite their interest and financial sophistication.
"And then when title three rules are implemented, which we're highly optimistic that that's going to happen tomorrow, actively participating with us in equity raises for a whole range of companies."
Erin Glenn discusses how the upcoming implementation of Title III could greatly benefit a range of companies and encourages active participation in equity raises.
"In a marketplace, we've really focused on quality deal flow and have built our investor base through companies."
Erin Glenn emphasizes the importance of quality over quantity in building a successful crowdfunding marketplace and the challenges of attracting both investors and quality companies.
"And do you think then that with the rise of crowdfunding in the last few years, it has the potential to replace vcs and more traditional investors?"
Harry inquires about the potential for crowdfunding to disrupt traditional venture capital, suggesting a future where both could coexist and support different stages or aspects of company funding.
"And I think vcs provide important seats at the table, roles in helping guide founders and provide advice as they go through those stages."
This quote emphasizes the multifaceted role of venture capitalists in supporting business growth beyond just financial investment. They offer crucial advice and guidance to founders.
"It's really difficult to use traditional forms of finance to find capital. And the crowd has provided a huge and deep pool of capital to help businesses grow..."
This quote explains how traditional financing difficulties have contributed to the rise of crowdfunding as an alternative capital source for businesses.
"We found that almost every respondent had two reasons, if not more. One, in addition to financial return, and a really big one, was supporting the company's mission and the founders..."
This quote highlights that investors are often driven by dual motives, including financial returns and supporting the missions and founders of the companies they invest in.
"Customers who are owners of a business spend more, they refer more, they talk about the business more, and they're more loyal."
This quote outlines the tangible benefits of crowdfunding for startups, indicating that customer-investors contribute significantly to a business's success.
"There will be a lot of disappointment. And again, the disappointment is the SEC will have passed again and missed a mandate on passing these rules..."
This quote reflects the anticipation and potential frustration tied to the SEC's rulings on crowdfunding, which are critical for businesses planning to use this financing method.
"It's a blast and it's fun to be in an environment where there are so many other creative and technical problem solvers..."
This quote captures the dynamic and supportive atmosphere of accelerator studios, which is advantageous for startups seeking collaborative problem-solving and feedback.
"I joined October 15 of 2014 after arriving in New York City two days earlier on the red eye from San Francisco with merely two suitcases, a blow up air mattress, and my dog."
This quote provides a personal account of Erin Glenn's move to New York and the beginning of her journey with the startup choir, setting the stage for her evolution as a CEO.
"I think it's a natural tendency for ceos, particularly in startups, to think they have all the answers and you don't."
This quote emphasizes the common misconception among startup CEOs that they must have all the answers, highlighting the importance of team collaboration.
"And it's one, a really slow and lonely process if you're the one trying to solve all the problems."
Erin Glenn points out the difficulties and isolation experienced by CEOs who attempt to tackle all challenges alone.
"And then two, there was a recent blog post just talking about the nature of equity in startups is really changing because your entire team is really contributing to solve these problems."
Erin Glenn notes the shift in how equity is viewed within startups, acknowledging the whole team's role in problem-solving and value creation.
"And then comparing the startup ecosystem in San Francisco versus New York, it's obviously so much smaller here in New York than it is in San Francisco, but the vibrancy and the intensity and the enthusiasm are absolutely equal."
Erin Glenn compares the startup ecosystems of San Francisco and New York, noting that despite New York's smaller size, it competes in energy and passion.
"There's a real competitiveness to make it happen, but there's a level of collaboration here that has been remarkable to me."
Erin Glenn observes a unique blend of competitive drive and collaborative spirit within the New York startup scene.
"And then there are many more female founders in New York."
Erin Glenn highlights the notable presence of female founders in New York's startup ecosystem.
"Yeah, I think there is, again, because there's so many industries here, finance, fashion, media, that have had women in senior executive roles."
Erin Glenn suggests that the diversity of industries with female leadership in New York has contributed to the rise of female founders.
"Magic Mountain? And it's just an interesting psychological look at what was going on in Europe kind of in advance of the outbreak of World War II."
Erin Glenn shares her favorite book, "Magic Mountain," appreciating its deep psychological and historical perspectives.
"Tim Cook."
This is Erin Glenn's succinct response when asked about the CEO she most admires, implying respect for Tim Cook's leadership.
"Of all of the above, there are probably three that are near and dearest to my heart. So that's the closest you're going to get."
Erin Glenn expresses her fondness for three companies in the Choir portfolio, indicating her close connection to their success and missions.
"Next five years at Choir we will transform the financial services industry globally."
Erin Glenn confidently predicts Choir's impact on the global financial services industry in the coming years.
"It's been my pleasure. It's an absolute blast and I've really been enjoying listening to your podcasts."
Erin Glenn thanks Harry for the opportunity to be on the podcast and shares her enjoyment of the show.
"And I would like to say a massive congratulations to Erin and to Choir with the recent knowledge that the SEC has passed the jobs act and it looks like everyone will be joining the crowdfunding revolution."
Harry acknowledges Erin and Choir's achievement related to the JOBS Act and the implications for the crowdfunding industry.