May 28, 2024 • 23 mins
Unlock the potential of your community through the eyes of Drew Tulchin from New Mexico Angels, as he reveals the rich opportunities in local impact investing akin to the shop-local movement. Imagine your financial contributions thriving right in your backyard. The conversation with Drew is an exploration of how triple-bottom-line companies and B Corps are embedding community values into their business models, creating a ripple effect for a sustainable future. We're not just talking money here; we're talking about a financial revolution that has the power to transform local economies and foster deep connections within our communities.
Witness the power of trust and local reputation as we recount the success of Meow Wolf, catalyzed by support from none other than George RR Martin. In shedding light on the stories that define New Mexico's unique business landscape, the episode uncovers what angel investors are truly seeking in startups. It's about pattern recognition and experience, but also about the human touch—values that resonate in the community and foster growth from within. Join us on this journey as we share the secret ingredients that could make or break your venture in today's interconnected world.
Finally, we delve into the philosophical side of business with thoughts on long-term investing and impactful philanthropy. Drawing wisdom from cultural traditions and thought leaders like Jed Emerson and Jim Collins, we challenge you to think beyond the quarterly report. This episode presents a narrative where aligning investments with personal beliefs isn't just a nice thought—it's a strategy for building legacies. The New Mexico Angels and the New Mexico Vintage Fund stand as testaments to the enduring power of community, and we invite you to be part of this impactful dialogue. Join us as we dissect, discuss, and discover the true value of people in business and the immense potential of community-driven investment.
https://nmangels.com/
http://meowwolf.com
This program is brought to you by:
Arc Integrated
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Joel (00:00):
What if investing in each other could change the world?
I'm Joel Skeen with bizradiousand this is the Mindful
Marketplace.
Welcome back.
Welcome back to part two ofthis excellent conversation
we're getting to have here todaywith Drew Tulchin from New
Mexico Angels.
(00:20):
He is enlightening us on allthings impact investing, local
investing, social enterprise.
If you're new with us here,this is the show where we talk
to entrepreneurs, investors,industry leaders, economic
experts, advisors, who are allquestioning that assumption that
there's just one bottom line inbusiness.
It's where we learn to connectour community and our values to
(00:44):
our businesses.
So very grateful to get to havedrew back with us here today.
If you missed part one, pleasego back and take a listen to
that.
Drew kind of lays out thebasics of what is triple line
bottom, triple bottom linebusiness mean.
What's a b corp, what is impactinvesting, what are some of
these basics, and so drew thanksfor for coming back in.
(01:06):
I wanted to kind of start withthe headline of an article that
you recently wrote on y'all'swebsite that was titled.
I think it was something to theeffect of I've got it here.
It was expanding, localinvesting growing.
Who are the local investors?
I guess we know a lot aboutshopping local.
(01:30):
It's great on Black Friday whenpeople leave the box stores
behind and they go somewherelocal.
That's great, but a lot ofpeople haven't even really heard
or know that there's anopportunity for local investing
out there.
So, yeah, what was it that madeyou decide to write this
article here?
Drew (01:48):
Yeah, thanks very much and , Joel, thanks also for the work
you do and for the opportunityfor us to share today, really
pleased.
Well, just to give you theworldview of kind of where we
are and where we fit in theuniverse, so I am fortunate to
live in Santa Fe, new Mexico.
I've been here 16 years and Ilead what's called New Mexico
Angels.
You can find us at nmangelscom.
(02:08):
We're an angel network andwe're supporting investing,
we're supporting startup andhigh growth companies and we're
supporting an ecosystem of thepeople and the thing the web
that interconnects so thatcompanies can be successful here
in our community.
In addition, I lead what'scalled Managing Partner of the
New Mexico Vintage Fund.
(02:28):
A vintage fund is like a wine,so it's a fund that specifically
looks at high growth entities,but we're looking at smaller
amounts of capital for theventure space or the VC space
and we're taking people tocentralize this capital, to have
an analyst to be able to docentralized due diligence and
look at this together and thenmake investment decisions to
(02:50):
help our local companies, ourcompanies that have a connection
to New Mexico, be able to growfaster, and so those two
elements together.
In addition, I do what's calledfractional executive work where
I will help a startup or highgrowth company with a capital
need and help them on a specificcapital raise.
And so that puzzle of how canwe do the veritable barn raising
(03:13):
right.
Barn raising was a thing youcouldn't build a barn by
yourself.
We had horses, we had hammers,we had nails, we didn't have
cranes, we didn't haveelectrical equipment.
We had hammers, we had nails,we didn't have cranes, we didn't
have electrical equipment, andyou needed the whole village to
put these walls up, and so youneeded to rely on each other and
then if you did it for somebody, then they would be able to do
(03:33):
it for you.
There's a reciprocity to it all, and you did mention shop local
.
I think that's something that alot of our communities, our
towns of Asheville, chapel Hill,our progressive communities,
who are thinking aboutneighborhoods that's not new
anymore.
Sometimes it can be difficultthe things you really like maybe
they come from Chile, they comefrom other parts of the world,
or you don't want to even lookat that label to see where it is
(03:54):
made, right, but can we alsotake our investing activities
just as our purchasingactivities and just think of
investment as anotherconsumption and look at what
we're doing with that side ofthe balance sheet, so to speak,
or that side of decision making.
Joel (04:10):
Yeah, it's kind of like your dollar is your vote in a
lot of ways.
You know, like you know, wedon't think oftentimes a lot
about you know the way we spendin that way, but it's true, like
the kind of businesses that weboth spend at and invest in,
that's going to impact thefuture.
That's going to have an impacton what the future looks like.
I also know that, when it comesto things like you mentioned
(04:33):
vintage investing and highgrowth investing, silicon Valley
style, vc investing or startupsincubators there's a lot of
these different ways thatinvesting has changed really
over the last 30 years or so.
What do you see as thestrengths of traditional venture
(04:55):
capital and what do you see asmaybe a weakness or a way that
it could improve?
Drew (04:59):
Yeah.
So I would put AngelDum alittle different than venture
right, and the reason why thatis because in AngelDum certainly
here in New Mexico, bearing inmind, I've only done this for
the last three years there'sstill a lot more communities.
You have individuals who arechoosing to cohere, come
together in affiliation, andthat there's a group effort
(05:21):
towards something.
A venture capital fund,stereotypically, is a single
entity it's managed, it's gotprofessional management and it's
making decisions on behalf ofits LPs, its investors, its
limited partners, but it's aprivate entity, while a group of
angels is a group ofindividuals and often the entity
(05:41):
itself can be for profit ornonprofit.
So the behavior is a littledifferent.
Stereotypically, an angel isearlier than a VC fund is.
That's changing with technology, with COVID and other means,
but the stereotype still holdstrue to the average listener.
(06:02):
Here.
I want you to make sure thatyou can be a part of local
investing, right, because angeldumb.
If you're an accreditedinvestor, which is a legal term
set up by the SEC as aregulatory means to protect
people, basically you haveenough money that you can lose
this investment.
Right?
That?
Those of us who are notaccredited, how do we find these
(06:23):
deals?
How do we participate in thesethings and technology.
Towards your point about thelast 30 years, what's changed?
To access information throughcrowdfunding is a great means,
(06:45):
and so all of us can invest ahundred dollars, a thousand
dollars at a time in things thatmotivate us, whether it's a
donation through crowdfunding oran investment through
crowdfunding.
So those of us who are credited, then there's this whole world
of venture that's available tous to find deals.
Joel (07:01):
Right, because traditionally, if you are, you
know in the the accredited lawsthat you're talking about, if
you are already essentiallywealthy enough that you can
afford to lose your investment,you can't.
It's been, you know.
There's really no, there's nota lot of guidelines as far as
what you can and can't invest in, whether it's locally or if,
basically, you don't need anadvisor, you can put you know
you can.
You can do whatever you want toin whatever business.
(07:23):
But for those of us, like yousaid, that are not accredited
and don't have a vast amount ofwealth to begin with, we
typically have to go through afinancial advisor if we want to
make any investments in, youknow, the stock market or the
bond market or anything likethat.
But yeah, there's been all ofthese changes where now people
(07:43):
can use crowdfunding, whichtraditionally, you know, when I
first heard about crowdfunding,it was just donations, it was
just hey, you can donate moneyto a startup and you know maybe
they'll give you a t-shirt orthat you know some kind of
premium VIP treatment when theyopen, right.
But now there's actually areturn on investment component
where, if you put your moneyinto a startup, you can start
(08:05):
participating in either revenueshare or some kind of return on
investment there.
I guess, taking that angelmindset from you're working with
people who have been able to dolocal investing for a long time
and now you're seeing thistransition where more and more
people are being able to accessthat and that barrier to entry
(08:28):
is kind of lowering.
I'm curious what stands out toyou most as this is happening.
I'm sure there's things thatare you're exciting about and
I'm sure there's things that youknow you would, you know, be
cautious about or that you seeneed to improve in order for
things to truly functionoptimally.
Drew (08:47):
Let me answer that in two ways, joel.
So let me do the first one andpause, and you can redirect if
needed.
So just on the micro scale,meaning New Mexico, where I live
, I'd be any of your listenerswho are fellow Zia folks shout
out to you Check us out atNMAngelscom and be in touch.
You know New Mexico, we like tothink of ourselves as a unique
place and statistically I thinkwe often are.
(09:08):
With Oklahoma, we have thehighest percentage of indigenous
people, majority, minoritystate.
We're officially bilingual,things like that, and so when I
think about local, for us it's alarge state with not very many
people in it.
So we're trying to think of thethings that can help each other
and so some of the things you'retalking about how do you use
(09:28):
technology, how to use our 21stcentury, our modernism?
But a lot of ways it still goesback to connecting to
traditionalism, meaning youstill have to rely on your
neighbor.
The more you know your neighborand trust your neighbor, the
more it's easy to do businesswith him or they.
The more you know your neighborand trust your neighbor, the
more it's easy to do businesswith him or they.
The more you know where thingsare in your community, the more
you can access them, whetherthat's a nonprofit, a food bank
(09:50):
or where do you get good bread,where's the best lumber?
And so just expand that out toinvest in.
How do I know who to trust?
Where are the restaurants thatwould actually want to invest in
?
Where is then the startupcompany, the guy or the gal, the
person who's done it?
Before you buy a ticket, you goin, you explore this world.
There's a bar, there's arestaurant, there's concerts.
Joel (10:30):
And they're making money at it right.
Drew (10:32):
When we first started doing that because I was the
first CFO people thought we werecrazy.
We're trying to raise $3million and we found people who
are true believers, eitherbecause they like the arts or
they knew some of the peopleinvolved, and so we got early
adopters and a lot of the folkstalked to me and they said, hey,
you know, we basically lookedupon this as a donation.
We thought it was a good thing,it leads some job creation and
(10:54):
could be good for Santa Fe.
We weren't expecting to seeanything back, but it got
successful.
We opened our doors in thefirst year.
We had seven million dollars,we had 500,000 visitors, and so
this idea of a local businessthat could draw upon a local
reputation to then get thecapital it needs to do this
business thing and employ 100artists is a beautiful thing.
(11:17):
Now, it helped that we gotGeorge RR Martin.
It helped that we got some namebrand people locally who could
write checks and they werewilling to tell other people
they'd written a check and hosta dinner and said I wrote a
check, it's time for you towrite a check too.
So I mean, we had a lot of goodfortune with Meow Wolf, but I
think every community has itsversion of Meow Wolf or has its
beloved pizza place or Chineserestaurant or, you know
(11:41):
hamburger place, and so how dowe take these things that have
been successful and try toreplicate them?
Joel (11:46):
Yeah, yeah, and I mean obviously that's the main
question when you guys arelooking at, when angel investors
in general, I guess, but alsoangel investors that are, like
you said, more locally minded,more consciously or impact
minded, whatever more than onebottom line, where they're
(12:06):
focusing on more than one bottomline what are the key things
that these investors are lookingfor when they're looking to
fund a startup?
What are they looking for fromthat startup business?
Drew (12:18):
Yeah, so I'm not smarter than a lot of people.
There's a lot of smarter peopleout there and so it's really
just the fact that I did the MBA.
I've been doing this every day,and when you do something a lot
, you have a tendency to getgood at it, or at least you see
the patterns right.
So if you haven't done thisbefore and you're an
entrepreneur and you're tryingto figure out the pathway for
(12:38):
capital, it's really, I thinkI'm an extrovert, so I talk to
other people or you read onlineor you go to YouTube or you go
to Harvard or University.
But there's lots of ways thatthis has been done and you don't
necessarily need to do itdifferently.
You just need to understand theterminology, which can be
exclusive.
You need to understand parts ofit and the steps and do it in
(13:01):
sequence, and then you need.
The more you look likesomething else that's been
successful, the easier it is forpeople who have written checks
to write checks before.
So, to specifically answer yourquestion, joel, in MBA class,
what we talked about inentrepreneurship is what are the
most important components of abusiness, and the question was
what are the first three mostimportant points?
(13:21):
And it's people, people, people.
A business, a product is stillthe human beings who make it,
who have to sell it, who createthe brand, who interact with the
customer, who make it, who haveto sell it, who create the
brand, who interact with thecustomer.
And so I would much rather takean A team with a B product than
an A product and have a B teamhandling.
(13:42):
And that goes back to somethingwe talked about in the first
segment about iconic brandsright, patagonia, ben Jerry's, I
think, just because that inpremature, that logo is on
something you trust it.
And the same is true ininvesting is getting people to
trust you, getting people toknow you and understand what
this opportunity is, and sothey're really basic things.
They're really unsexy, but thedata is that it's 1,000%, 1,000%
(14:07):
easier to get investment frompeople who know you than from
people who don't know you.
Joel (14:13):
Yeah, and what's coming to me as you're saying, all this
is I think about.
I feel like in my mind and inthe culture at large, there's
been this tension between theidea of doing good with doing
good, whether that's withbusiness or with nonprofit, and
then is over here on one side,then is over here on one side,
(14:35):
and then the idea of having, youknow, a successful business is
on the other side, in a way,almost like you have to like
that they're at odds and youhave to compromise.
If you want to make more money,well, you're going to have to
compromise on your values, andif you want to stick with your
values, well then you're goingto have to compromise on maybe
not making as much money, andthat may be true in the short
term.
But I don't know, as I thinkabout the types of businesses
that you're talking about,whether they are
(14:55):
community-oriented businesseslike Meow Wolf, whether they are
other types of B Corps thathave a focus on sustainability
in either the environment or intheir own personal, in their own
neighborhoods and in their owncommunities, and the businesses
that invest into their peoplerather than just into their
products and their marketing andeverything, but really treat
(15:17):
their people well and make surethat their people are living
full lives.
It seems like it's not so much aquestion of like, it's a
dichotomy between that andmaking more money in the long
run, but it does seem like it isin the short run, like if you
treat your community better,you're going to have like when I
think about Patagonia, thattrust is there because, man,
(15:38):
that stuff lasts and if itdoesn't last, they'll replace it
.
And there's this um, thislong-term thinking by that
company that we're going to behere for the long run and we're
going to be your, your, we'regoing to be the brand you trust
for the long run.
So I'm curious if you have justany thoughts on that sort of
dichotomy of using values,investing, using local investing
(16:02):
, using social enterprise as arecipe for long-term success.
Drew (16:08):
Yeah, so a couple of things come to mind.
One is a couple of resourcesthat people like reading or
looking stuff up.
One of my mentors is a guynamed Jed Emerson and he had
something called the blendedvalue proposition.
He's written a number of books.
They're all great reads, veryaccessible.
He writes very well.
So I would check those out, jedEmerson, and then you might
(16:30):
have to help me with this one,joel.
There's one called theCathedral Within.
It was written by a businessguy.
He's got a couple other books.
Good to Great is one of hisother books.
Oh, jim.
Joel (16:40):
Collins.
Drew (16:41):
Jim Collins, thank you.
So Jim Collins makes a numberof really good points around
longevity that you're talkingabout Again, easy reads you can
do it by the chapter, you don'thave to get sucked into a whole
book.
But the cathedral within thisis the idea back in Europe in
the Middle Ages or theReformation, where if you were
an architect, you knew youweren't going to finish the
(17:02):
cathedral that you were buildingduring your lifetime.
And so how do you take thevision of what you're trying to
do and extend it past your ownlife?
Right, and I think that that'simportant for the things we're
choosing to buy in this worldnow, the things we're making and
the things we're investing in.
Just as you value your house,which for most people, is
(17:23):
probably going to be the largestasset that they ever have,
unless you're very, veryfortunate your investments,
whether it's the small amountyou might have for retirement or
, if you're an angel investor,what you're able to do and start
with a high growth company.
And it's the same choices,right?
Why do you like a house?
What do you like about it?
What are its values?
What's going to make it goodfor the long term?
And you're right, the WallStreet, the concept of Wall
(17:46):
Street as a stereotype.
Right is short-term gains andshort-term thinking to maximize
return.
Good companies actually don'tfollow that.
The best companies have alongitudinal aspect to what
they're doing.
They're not trying to just makethe fast buck.
They also make a fast buck.
But even the Jeff Bezos of theworld and the Apples, and even
(18:07):
our wonderful, crazy Tesla owner, they're thinking of the future
.
They're thinking about thegenerations.
And so, for those of us who careabout this whether it's
faith-based, whether it'scommunity-based, whatever
moniker you want to use is thethings that you believe in.
It's okay to have beliefs andto seek out purchases, to seek
out lifestyle and then to seekout investments that reflect the
(18:30):
things that you believe in.
And, joel, I firmly believe,like you stated, you don't have
to give up anything for thatright.
That's an old adage.
If I got organic clothes, theywere going to suck and they were
going to fall apart and they'regoing to be more expensive.
That's not true anymore.
Walmart has organic clothes.
Now it's here.
So vote with your feet, thinkwith your purchasing and try to
(18:55):
align your investment activitiesuh, regardless of whether
you're an angel or not, uh, withthings that really matter to
you.
Joel (19:00):
Yeah, yeah, absolutely.
It reminds me you mentioned,you know, New Mexico being the
home of so many, um, indigenousfolks that are the ones that are
still here, um, that are herein America.
And, um, it reminds me whatyou're saying of an indigenous
saying and I don't know which,which group it was, but it's the
idea that when you make adecision, when you um, when
(19:21):
you're living your life, youshouldn't be thinking just about
yourself, obviously, but it'snot even just thinking about the
next generation, as we so oftendo.
It's actually thinking aboutseven generations from now, and
I just imagine the difference inwhat our world could be like if
the main motivator of these biginstitutions, like Wall Street
(19:41):
or whatever it is, if theirmindset was less about what's my
ROI, what's my return thisquarter and what's my profits
this quarter, but what kind ofworld and what kind of business
are we creating for sevengenerations from now?
Drew (20:00):
Yeah, it's an awesome point.
In New Mexico, we get thechance to think about that With
the New Mexico Angels.
Startups take a while and theVC or venture capital adage that
you're going to get an exitimmediately is not what the
actual national data says.
Most startup companies arelooking at five to seven years,
(20:22):
if they are successful, towardssome sort of exit.
And, of course, statistically,as you can imagine, most
companies fail, just as mostrestaurants fail.
So there's a lot of risk in thisand in New Mexico, where every
company that's adding 10 jobs ishelping, is valuable, is
numerable, right, is countable,that's valuable and that's
helpful.
We want to support that and wewant to support that more than
(20:44):
just do the check.
We also want to uh, we call ittime treasure talent right.
We want to get the people whohave business expertise we have
people with rolodexes andnetworks and might help with
sales or help with customers,helping to find talent, so you
get the right people in there,the right employees, the right
relationships.
All of those things are thingsthat we can do locally through
(21:05):
an angel network or through anyother community network, and
then, through the New MexicoAngels, we then created this
thing called the New MexicoVintage Fund, which was an
effort to create an institutionaround angeldom, and so we went
from individual activityangeldom to this venture world,
this institutional world, sothat we had a shingle, we could
be found a little bit easier.
(21:26):
We had a brand and 35 peoplejumped in with us the first time
we did this.
We've now done two funds, we'reabout to do a third, and New
Mexico Vintage Fund is anexample of collective people
coming together, each with theirsmall part of the puzzle right
the veritable stone soup andcreating a real solution that
can move things forward in aquantifiable way.
Joel (21:48):
Yeah, I love it and I'm really excited to get to next
time.
I know we didn't get a chanceto talk about it much yesterday,
but we're going to be talkingwith one of those efforts that
you all have funded called NewWay Homes, which is doing some
really incredible and innovativeand fascinating stuff in this
space some really incredible andinnovative and fascinating
stuff in this space.
So I'm excited to get to talkwith your colleague next week
(22:08):
about that.
And before we head out here,where can people find you?
I know you've mentioned beforeit's NMAngels, is that right?
Drew (22:14):
NMAngelscom, for the New Mexico Angels New Mexico Vintage
Fund.
You can find our consultingfirm, upspring Associates.
And then, yeah, we mentionedNew Way Homes, which is a
housing effort in California,something I believe in,
something I've invested in,support, and I'm excited to have
Sibley Simon, the CEO, sharewith you guys next week what
he's trying to do to makeCalifornia a better place.
Joel (22:34):
Yeah, All right.
Well, make sure to subscribe onYouTube, iTunes, iHeartRadio,
Spotify, anywhere, Stitcher,wherever you get your podcasts,
wherever you listen in.
Um, and check out Drew's work.
Um, and until next time, takecare of each other and remember,
uh, we are each other.
What if investing in each other could change the world?
I'm Joel Skeen with bizradiousand this is the Mindful
Marketplace.
Welcome back.
Welcome back to part two ofthis excellent conversation
we're getting to have here todaywith Drew Tulchin from New
Mexico Angels.
(00:20):
He is enlightening us on allthings impact investing, local
investing, social enterprise.
If you're new with us here,this is the show where we talk
to entrepreneurs, investors,industry leaders, economic
experts, advisors, who are allquestioning that assumption that
there's just one bottom line inbusiness.
It's where we learn to connectour community and our values to
(00:44):
our businesses.
So very grateful to get to havedrew back with us here today.
If you missed part one, pleasego back and take a listen to
that.
Drew kind of lays out thebasics of what is triple line
bottom, triple bottom linebusiness mean.
What's a b corp, what is impactinvesting, what are some of
these basics, and so drew thanksfor for coming back in.
(01:06):
I wanted to kind of start withthe headline of an article that
you recently wrote on y'all'swebsite that was titled.
I think it was something to theeffect of I've got it here.
It was expanding, localinvesting growing.
Who are the local investors?
I guess we know a lot aboutshopping local.
(01:30):
It's great on Black Friday whenpeople leave the box stores
behind and they go somewherelocal.
That's great, but a lot ofpeople haven't even really heard
or know that there's anopportunity for local investing
out there.
So, yeah, what was it that madeyou decide to write this
article here?
Drew (01:48):
Yeah, thanks very much and , Joel, thanks also for the work
you do and for the opportunityfor us to share today, really
pleased.
Well, just to give you theworldview of kind of where we
are and where we fit in theuniverse, so I am fortunate to
live in Santa Fe, new Mexico.
I've been here 16 years and Ilead what's called New Mexico
Angels.
You can find us at nmangelscom.
(02:08):
We're an angel network andwe're supporting investing,
we're supporting startup andhigh growth companies and we're
supporting an ecosystem of thepeople and the thing the web
that interconnects so thatcompanies can be successful here
in our community.
In addition, I lead what'scalled Managing Partner of the
New Mexico Vintage Fund.
(02:28):
A vintage fund is like a wine,so it's a fund that specifically
looks at high growth entities,but we're looking at smaller
amounts of capital for theventure space or the VC space
and we're taking people tocentralize this capital, to have
an analyst to be able to docentralized due diligence and
look at this together and thenmake investment decisions to
(02:50):
help our local companies, ourcompanies that have a connection
to New Mexico, be able to growfaster, and so those two
elements together.
In addition, I do what's calledfractional executive work where
I will help a startup or highgrowth company with a capital
need and help them on a specificcapital raise.
And so that puzzle of how canwe do the veritable barn raising
(03:13):
right.
Barn raising was a thing youcouldn't build a barn by
yourself.
We had horses, we had hammers,we had nails, we didn't have
cranes, we didn't haveelectrical equipment.
We had hammers, we had nails,we didn't have cranes, we didn't
have electrical equipment, andyou needed the whole village to
put these walls up, and so youneeded to rely on each other and
then if you did it for somebody, then they would be able to do
(03:33):
it for you.
There's a reciprocity to it all, and you did mention shop local
.
I think that's something that alot of our communities, our
towns of Asheville, chapel Hill,our progressive communities,
who are thinking aboutneighborhoods that's not new
anymore.
Sometimes it can be difficultthe things you really like maybe
they come from Chile, they comefrom other parts of the world,
or you don't want to even lookat that label to see where it is
(03:54):
made, right, but can we alsotake our investing activities
just as our purchasingactivities and just think of
investment as anotherconsumption and look at what
we're doing with that side ofthe balance sheet, so to speak,
or that side of decision making.
Joel (04:10):
Yeah, it's kind of like your dollar is your vote in a
lot of ways.
You know, like you know, wedon't think oftentimes a lot
about you know the way we spendin that way, but it's true, like
the kind of businesses that weboth spend at and invest in,
that's going to impact thefuture.
That's going to have an impacton what the future looks like.
I also know that, when it comesto things like you mentioned
(04:33):
vintage investing and highgrowth investing, silicon Valley
style, vc investing or startupsincubators there's a lot of
these different ways thatinvesting has changed really
over the last 30 years or so.
What do you see as thestrengths of traditional venture
(04:55):
capital and what do you see asmaybe a weakness or a way that
it could improve?
Drew (04:59):
Yeah.
So I would put AngelDum alittle different than venture
right, and the reason why thatis because in AngelDum certainly
here in New Mexico, bearing inmind, I've only done this for
the last three years there'sstill a lot more communities.
You have individuals who arechoosing to cohere, come
together in affiliation, andthat there's a group effort
(05:21):
towards something.
A venture capital fund,stereotypically, is a single
entity it's managed, it's gotprofessional management and it's
making decisions on behalf ofits LPs, its investors, its
limited partners, but it's aprivate entity, while a group of
angels is a group ofindividuals and often the entity
(05:41):
itself can be for profit ornonprofit.
So the behavior is a littledifferent.
Stereotypically, an angel isearlier than a VC fund is.
That's changing with technology, with COVID and other means,
but the stereotype still holdstrue to the average listener.
(06:02):
Here.
I want you to make sure thatyou can be a part of local
investing, right, because angeldumb.
If you're an accreditedinvestor, which is a legal term
set up by the SEC as aregulatory means to protect
people, basically you haveenough money that you can lose
this investment.
Right?
That?
Those of us who are notaccredited, how do we find these
(06:23):
deals?
How do we participate in thesethings and technology.
Towards your point about thelast 30 years, what's changed?
To access information throughcrowdfunding is a great means,
(06:45):
and so all of us can invest ahundred dollars, a thousand
dollars at a time in things thatmotivate us, whether it's a
donation through crowdfunding oran investment through
crowdfunding.
So those of us who are credited, then there's this whole world
of venture that's available tous to find deals.
Joel (07:01):
Right, because traditionally, if you are, you
know in the the accredited lawsthat you're talking about, if
you are already essentiallywealthy enough that you can
afford to lose your investment,you can't.
It's been, you know.
There's really no, there's nota lot of guidelines as far as
what you can and can't invest in, whether it's locally or if,
basically, you don't need anadvisor, you can put you know
you can.
You can do whatever you want toin whatever business.
(07:23):
But for those of us, like yousaid, that are not accredited
and don't have a vast amount ofwealth to begin with, we
typically have to go through afinancial advisor if we want to
make any investments in, youknow, the stock market or the
bond market or anything likethat.
But yeah, there's been all ofthese changes where now people
(07:43):
can use crowdfunding, whichtraditionally, you know, when I
first heard about crowdfunding,it was just donations, it was
just hey, you can donate moneyto a startup and you know maybe
they'll give you a t-shirt orthat you know some kind of
premium VIP treatment when theyopen, right.
But now there's actually areturn on investment component
where, if you put your moneyinto a startup, you can start
(08:05):
participating in either revenueshare or some kind of return on
investment there.
I guess, taking that angelmindset from you're working with
people who have been able to dolocal investing for a long time
and now you're seeing thistransition where more and more
people are being able to accessthat and that barrier to entry
(08:28):
is kind of lowering.
I'm curious what stands out toyou most as this is happening.
I'm sure there's things thatare you're exciting about and
I'm sure there's things that youknow you would, you know, be
cautious about or that you seeneed to improve in order for
things to truly functionoptimally.
Drew (08:47):
Let me answer that in two ways, joel.
So let me do the first one andpause, and you can redirect if
needed.
So just on the micro scale,meaning New Mexico, where I live
, I'd be any of your listenerswho are fellow Zia folks shout
out to you Check us out atNMAngelscom and be in touch.
You know New Mexico, we like tothink of ourselves as a unique
place and statistically I thinkwe often are.
(09:08):
With Oklahoma, we have thehighest percentage of indigenous
people, majority, minoritystate.
We're officially bilingual,things like that, and so when I
think about local, for us it's alarge state with not very many
people in it.
So we're trying to think of thethings that can help each other
and so some of the things you'retalking about how do you use
(09:28):
technology, how to use our 21stcentury, our modernism?
But a lot of ways it still goesback to connecting to
traditionalism, meaning youstill have to rely on your
neighbor.
The more you know your neighborand trust your neighbor, the
more it's easy to do businesswith him or they.
The more you know your neighborand trust your neighbor, the
more it's easy to do businesswith him or they.
The more you know where thingsare in your community, the more
you can access them, whetherthat's a nonprofit, a food bank
(09:50):
or where do you get good bread,where's the best lumber?
And so just expand that out toinvest in.
How do I know who to trust?
Where are the restaurants thatwould actually want to invest in
?
Where is then the startupcompany, the guy or the gal, the
person who's done it?
Before you buy a ticket, you goin, you explore this world.
There's a bar, there's arestaurant, there's concerts.
Joel (10:30):
And they're making money at it right.
Drew (10:32):
When we first started doing that because I was the
first CFO people thought we werecrazy.
We're trying to raise $3million and we found people who
are true believers, eitherbecause they like the arts or
they knew some of the peopleinvolved, and so we got early
adopters and a lot of the folkstalked to me and they said, hey,
you know, we basically lookedupon this as a donation.
We thought it was a good thing,it leads some job creation and
(10:54):
could be good for Santa Fe.
We weren't expecting to seeanything back, but it got
successful.
We opened our doors in thefirst year.
We had seven million dollars,we had 500,000 visitors, and so
this idea of a local businessthat could draw upon a local
reputation to then get thecapital it needs to do this
business thing and employ 100artists is a beautiful thing.
(11:17):
Now, it helped that we gotGeorge RR Martin.
It helped that we got some namebrand people locally who could
write checks and they werewilling to tell other people
they'd written a check and hosta dinner and said I wrote a
check, it's time for you towrite a check too.
So I mean, we had a lot of goodfortune with Meow Wolf, but I
think every community has itsversion of Meow Wolf or has its
beloved pizza place or Chineserestaurant or, you know
(11:41):
hamburger place, and so how dowe take these things that have
been successful and try toreplicate them?
Joel (11:46):
Yeah, yeah, and I mean obviously that's the main
question when you guys arelooking at, when angel investors
in general, I guess, but alsoangel investors that are, like
you said, more locally minded,more consciously or impact
minded, whatever more than onebottom line, where they're
(12:06):
focusing on more than one bottomline what are the key things
that these investors are lookingfor when they're looking to
fund a startup?
What are they looking for fromthat startup business?
Drew (12:18):
Yeah, so I'm not smarter than a lot of people.
There's a lot of smarter peopleout there and so it's really
just the fact that I did the MBA.
I've been doing this every day,and when you do something a lot
, you have a tendency to getgood at it, or at least you see
the patterns right.
So if you haven't done thisbefore and you're an
entrepreneur and you're tryingto figure out the pathway for
(12:38):
capital, it's really, I thinkI'm an extrovert, so I talk to
other people or you read onlineor you go to YouTube or you go
to Harvard or University.
But there's lots of ways thatthis has been done and you don't
necessarily need to do itdifferently.
You just need to understand theterminology, which can be
exclusive.
You need to understand parts ofit and the steps and do it in
(13:01):
sequence, and then you need.
The more you look likesomething else that's been
successful, the easier it is forpeople who have written checks
to write checks before.
So, to specifically answer yourquestion, joel, in MBA class,
what we talked about inentrepreneurship is what are the
most important components of abusiness, and the question was
what are the first three mostimportant points?
(13:21):
And it's people, people, people.
A business, a product is stillthe human beings who make it,
who have to sell it, who createthe brand, who interact with the
customer, who make it, who haveto sell it, who create the
brand, who interact with thecustomer.
And so I would much rather takean A team with a B product than
an A product and have a B teamhandling.
(13:42):
And that goes back to somethingwe talked about in the first
segment about iconic brandsright, patagonia, ben Jerry's, I
think, just because that inpremature, that logo is on
something you trust it.
And the same is true ininvesting is getting people to
trust you, getting people toknow you and understand what
this opportunity is, and sothey're really basic things.
They're really unsexy, but thedata is that it's 1,000%, 1,000%
(14:07):
easier to get investment frompeople who know you than from
people who don't know you.
Joel (14:13):
Yeah, and what's coming to me as you're saying, all this
is I think about.
I feel like in my mind and inthe culture at large, there's
been this tension between theidea of doing good with doing
good, whether that's withbusiness or with nonprofit, and
then is over here on one side,then is over here on one side,
(14:35):
and then the idea of having, youknow, a successful business is
on the other side, in a way,almost like you have to like
that they're at odds and youhave to compromise.
If you want to make more money,well, you're going to have to
compromise on your values, andif you want to stick with your
values, well then you're goingto have to compromise on maybe
not making as much money, andthat may be true in the short
term.
But I don't know, as I thinkabout the types of businesses
that you're talking about,whether they are
(14:55):
community-oriented businesseslike Meow Wolf, whether they are
other types of B Corps thathave a focus on sustainability
in either the environment or intheir own personal, in their own
neighborhoods and in their owncommunities, and the businesses
that invest into their peoplerather than just into their
products and their marketing andeverything, but really treat
(15:17):
their people well and make surethat their people are living
full lives.
It seems like it's not so much aquestion of like, it's a
dichotomy between that andmaking more money in the long
run, but it does seem like it isin the short run, like if you
treat your community better,you're going to have like when I
think about Patagonia, thattrust is there because, man,
(15:38):
that stuff lasts and if itdoesn't last, they'll replace it
.
And there's this um, thislong-term thinking by that
company that we're going to behere for the long run and we're
going to be your, your, we'regoing to be the brand you trust
for the long run.
So I'm curious if you have justany thoughts on that sort of
dichotomy of using values,investing, using local investing
(16:02):
, using social enterprise as arecipe for long-term success.
Drew (16:08):
Yeah, so a couple of things come to mind.
One is a couple of resourcesthat people like reading or
looking stuff up.
One of my mentors is a guynamed Jed Emerson and he had
something called the blendedvalue proposition.
He's written a number of books.
They're all great reads, veryaccessible.
He writes very well.
So I would check those out, jedEmerson, and then you might
(16:30):
have to help me with this one,joel.
There's one called theCathedral Within.
It was written by a businessguy.
He's got a couple other books.
Good to Great is one of hisother books.
Oh, jim.
Joel (16:40):
Collins.
Drew (16:41):
Jim Collins, thank you.
So Jim Collins makes a numberof really good points around
longevity that you're talkingabout Again, easy reads you can
do it by the chapter, you don'thave to get sucked into a whole
book.
But the cathedral within thisis the idea back in Europe in
the Middle Ages or theReformation, where if you were
an architect, you knew youweren't going to finish the
(17:02):
cathedral that you were buildingduring your lifetime.
And so how do you take thevision of what you're trying to
do and extend it past your ownlife?
Right, and I think that that'simportant for the things we're
choosing to buy in this worldnow, the things we're making and
the things we're investing in.
Just as you value your house,which for most people, is
(17:23):
probably going to be the largestasset that they ever have,
unless you're very, veryfortunate your investments,
whether it's the small amountyou might have for retirement or
, if you're an angel investor,what you're able to do and start
with a high growth company.
And it's the same choices,right?
Why do you like a house?
What do you like about it?
What are its values?
What's going to make it goodfor the long term?
And you're right, the WallStreet, the concept of Wall
(17:46):
Street as a stereotype.
Right is short-term gains andshort-term thinking to maximize
return.
Good companies actually don'tfollow that.
The best companies have alongitudinal aspect to what
they're doing.
They're not trying to just makethe fast buck.
They also make a fast buck.
But even the Jeff Bezos of theworld and the Apples, and even
(18:07):
our wonderful, crazy Tesla owner, they're thinking of the future
.
They're thinking about thegenerations.
And so, for those of us who careabout this whether it's
faith-based, whether it'scommunity-based, whatever
moniker you want to use is thethings that you believe in.
It's okay to have beliefs andto seek out purchases, to seek
out lifestyle and then to seekout investments that reflect the
(18:30):
things that you believe in.
And, joel, I firmly believe,like you stated, you don't have
to give up anything for thatright.
That's an old adage.
If I got organic clothes, theywere going to suck and they were
going to fall apart and they'regoing to be more expensive.
That's not true anymore.
Walmart has organic clothes.
Now it's here.
So vote with your feet, thinkwith your purchasing and try to
(18:55):
align your investment activitiesuh, regardless of whether
you're an angel or not, uh, withthings that really matter to
you.
Joel (19:00):
Yeah, yeah, absolutely.
It reminds me you mentioned,you know, New Mexico being the
home of so many, um, indigenousfolks that are the ones that are
still here, um, that are herein America.
And, um, it reminds me whatyou're saying of an indigenous
saying and I don't know which,which group it was, but it's the
idea that when you make adecision, when you um, when
(19:21):
you're living your life, youshouldn't be thinking just about
yourself, obviously, but it'snot even just thinking about the
next generation, as we so oftendo.
It's actually thinking aboutseven generations from now, and
I just imagine the difference inwhat our world could be like if
the main motivator of these biginstitutions, like Wall Street
(19:41):
or whatever it is, if theirmindset was less about what's my
ROI, what's my return thisquarter and what's my profits
this quarter, but what kind ofworld and what kind of business
are we creating for sevengenerations from now?
Drew (20:00):
Yeah, it's an awesome point.
In New Mexico, we get thechance to think about that With
the New Mexico Angels.
Startups take a while and theVC or venture capital adage that
you're going to get an exitimmediately is not what the
actual national data says.
Most startup companies arelooking at five to seven years,
(20:22):
if they are successful, towardssome sort of exit.
And, of course, statistically,as you can imagine, most
companies fail, just as mostrestaurants fail.
So there's a lot of risk in thisand in New Mexico, where every
company that's adding 10 jobs ishelping, is valuable, is
numerable, right, is countable,that's valuable and that's
helpful.
We want to support that and wewant to support that more than
(20:44):
just do the check.
We also want to uh, we call ittime treasure talent right.
We want to get the people whohave business expertise we have
people with rolodexes andnetworks and might help with
sales or help with customers,helping to find talent, so you
get the right people in there,the right employees, the right
relationships.
All of those things are thingsthat we can do locally through
(21:05):
an angel network or through anyother community network, and
then, through the New MexicoAngels, we then created this
thing called the New MexicoVintage Fund, which was an
effort to create an institutionaround angeldom, and so we went
from individual activityangeldom to this venture world,
this institutional world, sothat we had a shingle, we could
be found a little bit easier.
(21:26):
We had a brand and 35 peoplejumped in with us the first time
we did this.
We've now done two funds, we'reabout to do a third, and New
Mexico Vintage Fund is anexample of collective people
coming together, each with theirsmall part of the puzzle right
the veritable stone soup andcreating a real solution that
can move things forward in aquantifiable way.
Joel (21:48):
Yeah, I love it and I'm really excited to get to next
time.
I know we didn't get a chanceto talk about it much yesterday,
but we're going to be talkingwith one of those efforts that
you all have funded called NewWay Homes, which is doing some
really incredible and innovativeand fascinating stuff in this
space some really incredible andinnovative and fascinating
stuff in this space.
So I'm excited to get to talkwith your colleague next week
(22:08):
about that.
And before we head out here,where can people find you?
I know you've mentioned beforeit's NMAngels, is that right?
Drew (22:14):
NMAngelscom, for the New Mexico Angels New Mexico Vintage
Fund.
You can find our consultingfirm, upspring Associates.
And then, yeah, we mentionedNew Way Homes, which is a
housing effort in California,something I believe in,
something I've invested in,support, and I'm excited to have
Sibley Simon, the CEO, sharewith you guys next week what
he's trying to do to makeCalifornia a better place.
Joel (22:34):
Yeah, All right.
Well, make sure to subscribe onYouTube, iTunes, iHeartRadio,
Spotify, anywhere, Stitcher,wherever you get your podcasts,
wherever you listen in.
Um, and check out Drew's work.
Um, and until next time, takecare of each other and remember,
uh, we are each other.
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