Before startups land their first big round of capital, or even raise a round of seed funding, many get their start with small amounts of money from family and friends. This early-stage financial support can make or break a new business. Of course, not every entrepreneur has access to friends and family funding.
Pipeline Angels, a New York-based organization that arrived in Minneapolis earlier this year, aims to fix that problem. Pipeline's members serve as the friends and family round for entrepreneurs who may not already have support at that critical stage.
Pipeline funds startups led by women and non-binary femme social entrepreneurs. Businesses with female founders raise only a small portion of overall venture capital investment. In 2017, U.S. startups raised just over $80 billion in venture capital, according to Pitchbook. Women-led startups raised a little over $10 billion of that amount.
Maggie Knoke, Tina Eskridge and Lisa Goldson Armstrong are the founding members of Pipeline Angels' Twin Cities chapter. All three are experienced businesswomen who received training from Pipeline to become angel investors.
Armstrong is a brand strategist and business consultant who has worked with companies of all sizes, including startups. She always wanted to back women-led businesses in the Twin Cities, but was never sure where to start. After some research, Armstrong stumbled across Pipeline Angels. She went through the organization's bootcamp program, which teaches first time investors how to invest.
Although Pipeline is still very new to Minneapolis, Armstrong believes that the group arrived at the right time to make a big impact.
"It's a good time for this to happen – for us to be here," she said. "The local startup ecosystem is really starting to be built out. It's a very friendly and very collaborative environment."
Pipeline's Minneapolis arm is one of the newest additions to the national organization. Pipeline got its start in 2011, when founder Natalia Oberti Noguera decided to start a fund that supported up-and-coming women entrepreneurs. Pipeline Angels now has a national reach that extends from Alaska to Atlanta, covering 37 cities total.
"We may not be able to to take you all the way, but we will help you take that idea and turn it into a viable company."
Pipeline reports that since its launch, more than 200 members have graduated from its angel investing bootcamp and have invested nearly $5 million in more than 40 companies. Most of this investing is done at "pitch summits," events where women and femme-identifying founders are given five minutes to pitch the business to Pipeline's local angels. At the end of the event, one or more startups walk away with $5,000 in seed capital.
It's a bit like "Shark Tank," but with smaller stakes and an increased focus on friendly support and social impact. Armstrong affectionately referred to these events as "tadpole tank."
"Your first pitch is never going to be your best," she said. "You learn by watching, and the Pitch Summit is a great place to do that. It's such a unique audience. When women pitch to other women, they're pitching to an audience that understands right away what they're trying to do."
Eight companies pitched at Pipeline's first Twin Cities event in May. Four of these businesses, Armstrong said, were from the Midwest. She hopes that over time, one hundred percent of the startups pitching at the summit will be, not just from the Midwest, but based in the Twin Cities. Pipeline's next Minneapolis Pitch Summit is set for Nov. 1. Applications are now open.
In addition to providing seed capital, the angels also give their portfolio companies the business advice and networking skills they need to continue growing after the friends and family round.
"The title 'Pipeline' is so accurate," Armstrong said. "We're part of a process. We may not be able to to take you all the way, but we will help you take that idea and turn it into a viable company."
