Angel Q&A Series: Kristina Montague of The JumpFund
As Managing Partner for The JumpFund, Kristina is responsible for managing an angel fund that invests in female-led companies with growth potential in order to generate a strong financial return and elevate the role of women in business. Kristina spoke to us about the role of women in angel investing, and her experiences in this burgeoning field.
Startup Angels: How did you get your start? How did you find your way to The JumpFund?
Kristina Montague: I have an education background and I’ve worked most of my career in career in K-12 education, most recently at the university level. So, it’s a different background from most people in this industry. I was an Assistant Dean of the business school at the University of Tennessee, Chattanooga. While I was there, I found that a lot of young female entrepreneurs did not really have a place to land. That was when Stephanie, Shelly, myself, and others talked about what we could do and, after a year, we decided we should put in some money. I don’t have a finance background, but I’ve invested in the public markets and I’ve worked for a family office that has invested.
SA: Why do you invest in startups?
KM: For me, it really came from the mission of women at the entrepreneurial level. If you look at Chattanooga and the greater Southeast, you will notice how few the women are in this field. We have that in mind (leveling access to capital), but we also have the interest of our LPs in mind as well. We have a strong focus on returns, and there is ample evidence that more diverse teams offer better returns.
SA: Based on your experience, what are some cities that you’ve seen that on the right path when it comes to female entrepreneurship?
KM: I just came back from Memphis, where I was at a demo day, at Start Co. They have four accelerators, one of which is focused on women, Start Co Upstart. I think that, because they have that accelerator, the door to having diverse teams has been opened. Even in other accelerators that are not focused on such things there is a “diversity spillover”. There are definitely pockets of this happening, with more investors looking at this as a new arbitrage opportunity. The success rate is higher with women-led companies, despite being not as heavily funded as male-led companies. Investors are coming out and saying that they want to invest in more diverse teams. The playing field is not equal, and the conversation has just been opened.
SA: What female investor do you admire the most?
KM: A person that we’ve watched is Joanne Wilson, and we follow what she does in tech. She was a lead investor in one of our portfolio companies. We have had a lot of mentorship from Golden Seeds, a lot of our partners went through there. Golden Seeds has some of the toughest due diligence out there and it’s hard for entrepreneurs to break through with them, so we respect them for that. They also have a big network of female investors. There aren’t too many female investor networks, and I already know a lot of them.
SA: What would you say to female investors on the fence when it comes to angel investing?
KM: You have to be comfortable with the risk, and there isn’t a way to talk around that. The more they can understand that the better. A more palatable way in can be by building a more diverse portfolio, which would decreases the risk. However, you can never completely mitigate the risk. But if you are willing to risk capital in equities, then you can carve out some of your portfolio to invest in startups. Another thing is education: with things like Startup Angels, Pipeline Fellows, and plenty of other opportunities, it is never too late to learn. When we were building our fund, a majority of the women had previous business experience, not necessarily startup-related, but they still “got it”. Many fundamentals of business translate well into the startup world.
SA: What do you think the role of women in startup investing over the next few years will look like?
KM: We still need to work on getting more women investors to become more comfortable, without them being intimidated. To me, that is more education. Getting more female investors will unlock more capital. Another thing is that the investor network is very male centric, and frankly people invest in what they know, so men tend to invest in men. More investors need to realize that diverse teams can move products further in the marketplace, and they need to understand the necessity of having global perspectives.
SA: What does the ideal angel investor look like to you?
KM: Everybody we have brings so many different perspectives, it’s this network of people who can at any point in time in the company who can bring something to the table. We have over 50 women from diverse backgrounds, from engineering to government contracting, and we’ve been able to plug these women in as resources. We don’t necessarily have an ideal profile, but I think having some business acumen is helpful, not necessary. I think you have to be open to the creative process too, you can’t just look at these as regular companies. It’s a lot like rolling the dice, there’s a lot of squishy qualitative things. An ideal angel would be okay with that, with not having all their questions answered.
SA: What do you look for in entrepreneurs?
KM: We’ve talked about that a lot, and we believe that management is key. If we think that your team doesn’t have the chops, well then it’s not gonna happen. It’s also very important to do some customer validation. There are too many ideas out there that fall flat when they come to market.
It’s also important to have somebody with business acumen or have somebody that does have the experience. Industry wise, we are agnostic so that is not a major consideration. We are invested in all different kinds of industries, but if you don’t have the other things in place, then we are not interested.
SA: What’s the biggest mistake you’ve made?
KM: We don’t have a long enough a track record yet to see if we have made mistakes. But early on, you can get pretty far along, but if the entrepreneur is not “opening the kimono”, and is trying to hide things, then that calls for a serious gut check. This one deal got really close, but we shut the deal down, which was good because you have to go with your gut. On the other hand, you need to take risks because it’s still a lot like gambling.
SA: It was great talking to you Kristina. We want to conclude our interview with a little word association game. For example, when I say ___, you say ____.
KM: Alright, go right ahead.
KM: Angel. We have this constant battle because we are angels, but people keep calling us a VC.
SA: Angel investing?
KM: Broadway. That is where the term “angel investing” originally comes from.
SA: Silicon Valley?
KM: Tough. Especially for women.