While teaching a senior seminar course, helping students find internships, and coaching them on their careers as assistant dean of external affairs at the University of Tennessee at Chattanooga a few years ago, Kristina Montague noticed a disturbing pattern.
Each time a young woman came into her office, eager to start her own business and seeking resources, Montague didn’t know what to say.
Digging deeper, she consulted with three other professional women – an economic developer, a venture capitalist, and a banker – and learned that many young Chattanooga women perceived the new Company Lab, a non-profit startup accelerator, as a “boys’ club.’’
“That was an eye opener for me,” says Montague, 47, now managing partner at The JumpFund, an angel group of female investors who aid women-owned companies.
“We thought, ‘There’s a problem here, because we have these talented young women who want to engage and would like to figure out how to start their own businesses too, yet they have no place to land.’”
Company Lab also hosts a 48-Hour Launch created to help entrepreneurs turn ideas into bona fide businesses.
In time, and after testing the waters with a for-women-only 48-Hour Launch held in conjunction with Co.Lab – the turnout was huge – Montague and her colleagues tossed around the idea of starting a mentoring group. But, they agreed, that wasn’t going to be enough. So, when a couple of technology experts in Seattle and Silicon Valley suggested they “get some money together,” they knew what they needed to do.
Montague, along with Shelley Prevost of Lamp Post Group, River City Company’s Tiffanie Robinson and CapitalMark executive Stefanie Crowe, attended a “very robust” angel investor training program in New York, and in late 2013 established The JumpFund, a regional, women-led angel investment collective.
Together, they called on women they knew and recruited more than 50 accredited investors with a net worth of at least $1 million each. Three more partners – Betsy Brown, a trucking company owner; Cory Allison, an IT management consultant; and Leonora Williamson, a tech expert with digital solution company SIGNIX – joined The JumpFund soon after.
The fact that this hadn’t been done before in Chattanooga – maybe anywhere – didn’t stop them, nor did the naysayers who scoffed at their idea.
“We were told that we absolutely couldn’t do it,’’ Robinson says. “I mean, we were told that right and left.”
“Once we got into it, we realized how unusual it was that we raised $2.5 million from all women in our own community, and a community the size of Chattanooga,” Montague explains. “Even a lot of male groups were coming up and saying, ‘How did you get all these women [investors]? It’s really not a secret sauce. It really was just us saying, ‘This is what we are going to do,’ and us all having really strong networks to plug into.”
The JumpFund was later featured in a story about angel investors in Forbes magazine and is believed to be the only one of its kind in the world.
A longtime educator, Montague uses her relationship-building skills to bring people together in her current leadership role. A Seattle native with a degree in Africana studies from Vassar College, she began her career, and met her husband Tom, as a Teach for America volunteer, working with third-graders in a low-performing elementary school in an underserved community in rural Louisiana.
After earning her master’s in education policy at the University of Washington, she took a job at Chattanooga’s Public Education Foundation managing programs such as Community Matters, a grassroots education advocacy and community organizing initiative, and led public-private planning for the merger of the city and county school systems. She also worked at Normal Park Museum Magnet School as parent involvement coordinator and development director.
At the JumpFund, Montague manages the “whole pipeline of investment,” from finding investors to communicating with the public via her organization’s website and blog. She travels a lot, attending accelerator pitch events, especially those with a fair number of women, at conferences across the U.S.. She loves sleuthing out possible investors and fund recipients.
“I’m a connector,” she explains. “That’s what I’m supposed to do: connect people. So, a lot of the work I do is just making sure that we’re building up better connections for women in this space, because that’s what we lack.”
Since its inception, The JumpFund has sunk nearly all of its original $2.5 million, in amounts ranging from less than $20,000 to “several hundred thousand” dollars, into 18 women-led companies. (Montague points out that relationship-building angel investors generally bridge the gap between the initial loans of family and friends and the acquisition of venture capital.)
The recipient business must be led by a woman in a top level “C” position, with significant equity in the company and show strong customer attraction as well as the potential for becoming a $20 million enterprise within three to five years.
“We’re not looking at lifestyle companies. We’re not looking necessarily at brick-and-mortar companies,” Montague says. “Usually these are tech or tech-enabled companies. We have some life sciences companies and we have a couple of consumer goods [companies]. But all of them are on a fast-growth trajectory.”
The group’s first investment, SuperFanU, was an “all-around fit” for The JumpFund, she notes, with the right expertise, right product and right leadership.
Started in 2011 by longtime sports fan Kayla Mount, the Louisville company creates customized cell phone and mobile web apps that allow students, alumni and other fans to consume content from college, university and high school sports teams. The teams gain access to data that help their marketing efforts.
The angels invested time as well as money, consulting with Mount and her staff on human resources, sales and other issues. SuperFanU later became The JumpFund’s first company to hit $1 million in annual revenue.
“We loved the fact,” says Montague, “that the first product would be a sports-related product, which would not be what people would consider typical, not a frilly woman service product.”
Two more JumpFund recipients, Partpic and Torch, won first place in consecutive years in a major regional entrepreneurial showcase, drawing attention from national investors. Feetz, a 3-D shoe printer that got its footing in Chattanooga and landed additional funds from a large west coast investor because of its affiliation with The JumpFund.
JumpFund team members tend to be Type A perfectionists with an empathetic, open-door approach that allows potential investors who don’t make the cut to come back in a few months, after they’ve strengthened their business plans, Montague says.
“We’ve done no other advertising, short of existing, and we’ve seen over 200 companies in the past three years. We’ll make you dot a lot of i’s and cross a lot of t’s before we make an investment with you. It’s a pretty rigorous process. They’re not grants; these are equity investments. We’re looking for a piece of your company. We’re looking to be a partner in your company and add value to you. … It’s kind of like Shark Tank, but we call ourselves the Dolphin Tank.”
Montague stops short of claiming that women make better investors than men but admits their approach is different, even “refreshing.”
She cites a Harvard Business Review study showing women-led companies that receive venture capital from a group with at least one woman had the same, or more, success as male-led companies.
“A female investor interacting with a female founder makes a world of difference in the success of that woman’s company,” Montague says.
The JumpFund’s greatest challenge right now, Montague explains, is keeping up with the growth of its investees and offering as much support as possible. The partners are currently raising capital for a second round of funding expected to total $5 million to $7 million.
“We are basically out of capital with the first fund and still see such opportunity that’s being left on the table because these women-led companies aren’t being invested in as much as the men,” Montague says.
“In the Southeast, only 6 percent of all venture capital goes to women and nationally it’s a little under 15 percent. So, it’s not very good.
“A lot of what I was doing at the university was relationship-building, business partnerships and that kind of thing,” she adds. “I’m a very self-driven person. I like to build things, basically. So now we’re going to build a second one, and I like that challenge.”
Montague says she has noticed a shift in the entrepreneurial landscape since the fund was formed three years ago, with more females successfully launching their own problem-solving businesses.
“Women-led companies are coming to the forefront as the top companies in our state, in our region,” Montague adds.
“We’ve still got a long way to go. It’s so super hard. All these women that we talk to – it’s very, very difficult for them to fundraise. It’s all about networks, so it’s about who you know. And it’s very hard to get in some of these groups. Some are just, frankly, very much boys’ networks. … But I think we’ve started to change the conversation.”