Gina Tedesco, a serial entrepreneur, and financial planning expert turned investor, is focused on changing the gender disparity equation. Tedesco is a “Jersey girl” with a degree in mechanical engineering and an MBA. Her globe-hopping career began when she answered an ad in a newspaper to join a multi-cultural team in France at the pharmaceutical company, Rhone-Poulenc (now known as Sanofi Aventis). There, she met her future husband, a Brazilian, and transferred to Rhone’s South American operations.
Soon thereafter, she transferred from finance to marketing but found herself missing the M&A aspect of her former role. By this time, her husband had taken over his father’s condom manufacturing company. Tedesco joined in to professionalize the family business.
She realigned and expanded it with an international latex trading operation then managed it from New Jersey until she exited via a sale to a global latex manufacturer. Along the way, bolstered by international connections, at a time when Angel-funding groups had not yet formalized, she launched Astralis, a biotech with a promising psoriasis treatment. As the CFO of this publicly-traded company, she helped take it all the way to a Phase II clinical trial and facilitated the sale of the biotech. With a few successful startup launches and exits under her belt, Tedesco was ready to embrace her future as an investor.
Grit Daily caught up with Gina Tedesco following her panel discussion on female funding opportunities at the Propelify conference.
Grit Daily: Thanks for taking some time with us today. Tell us about the moment you decided to invest your capital. What prompted your decision?
Gina Tedesco: I needed to figure out what to do given that I had sold Astralis and no longer had a formal role as its CFO. My portfolio needed attention so I began considering how to diversify it as an investor. Not that much time had elapsed since I had secured funding to get the biotech off the ground so the challenge of doing so was still fresh in my mind. I needed to somehow help people start their businesses and gain access to funding. At that time, entrepreneurs had few options. What lead me to Golden Seeds was its people. There were like-minded investors and recognized the value of an asset class which was just emerging, and the timing was right.
GD: You’ve had a few successful startups. How has that experience made you a better investor?
GT: Since 2005, I’ve been an adjunct professor at Fairleigh Dickinson University in its entrepreneurship program so I’m familiar with the struggles of funding and the perils of a poor financial strategy. Through my teaching, the importance of mentorship became clear. Moreover, I learned that it is essential to have a strong fit between an investor and an entrepreneur, to be aligned on key principles and to have a deep enough relationship where you can share things that may be tough to hear.
GD: Your lectures at the university are backed by data, reports and inspirational leaders. Who or what should our readers learn more about?
GT: One of the most fascinating stories is that of Dame Stephanie Shirley, aka Steve Shirley, who did the unthinkable. Dame Shirley escaped the holocaust as a child, established an all-women software development company back in the 1960s and generated interest, as well as significant revenues, by presenting as her male alter ego. I always recommend that my classes watch her TED talk.
Additionally, I encourage my students to be well-informed and monitor Angel-funding reports to track activities and trends. Finally, one of the most important and provocative questions to ask an entrepreneur is based on the HBR Founder’s Dilemma: do you want to be rich or do you want to be king? How you answer will dictate your financial strategy and which investors are best aligned with your direction.
GD: You’re associated with numerous investment groups, including your own fund, Amala Ventures, as well as JumpStart NJ Angel Network, and Golden Seeds. From the outside, this would appear to be competitive. How do you manage to invest across multiple funds?
GT: Each fund has different investment criteria. For example, my husband launched an accelerator and another startup in Brazil around eight years ago which I invested in. Most investors seek diversification for their portfolios so it is not uncommon to share deals and pool funds. The field of angel investment is actually quite collaborative.
Angels want to get in on the early rounds before the venture capitalists join. There is tremendous synergy across the Angel network and group efforts are the norm. Each fund differentiates in its focus and investment criteria. For example, JumpStart has a geographic focus Boston to D.C. and invests in very early-stage tech companies whereas Golden Seeds invests in female leaders at an early stage in a range of fields including active participation in healthtech.
GD: At Propelify, you spoke of the importance of government partnership. Tell us how that was initiated and how it’s changed the game for Golden Seeds and your startups.
GT: You can’t operate without government support. Our tri-state members include Pennsylvania which offers businesses low taxes whereas New York is incredibly well-funded and offers numerous incentives and programs, including tax-breaks. The government of New Jersey is increasingly offering support services, tax incentives and other efforts to attract new and retain existing businesses in the state. Government policies, by design, bring disparate players together. Recent Golden Seeds partnerships include the Office of the First Lady Tammy Murphy of NJ and the NJ Economic Development Authority (NJEDA) which will both have a significant impact on our growth, reach and ability to support new businesses.
As an adjunct professor, it’s probably not surprising that I’m a big fan of education. Years ago, I was one of the first companies to take advantage of the then-new NJ tax incentives for startups. My point is, you need to know what you don’t know and make an effort to become educated on the subject. There are numerous opportunities related to funding for NJ businesses, it’s a matter of being aware of them and developing a sound financial strategy.
GD: You’re a numbers gal. What are some of the data points that motivate you to keep going and finding new ways to support entrepreneurs?
GT: The success of Golden Seeds is an incredible example of numbers to keep you motivated. If we look back 15 years, less than 5% of investors were Angels. Today, there are nearly 30%. From a numbers perspective, there are 275 active members within the Golden Seeds Angel network that have collectively invested over $120M into 170 companies. With nearly 100,000 female angels active today, across all funds, the game is changing. And that number is actually smaller than it could be when you consider all the potential investors so we’re collectively only at the start of something bigger.
GD: One of the many languages you speak is Portuguese. How has this helped you help Latinas?
GT: My portfolio is diverse which is reflected by whom I invest in. Most of my teams are diverse by gender or race, largely Latino, Brazilian, and African American. Diversity, with regards to every aspect, is better in the long-term. Workshops that we’ve conducted in my college classes demonstrate that homogenous teams do not fare as well. Being multi-lingual helps me communicate and connect with our entrepreneurs.
That said, race and gender inequality need to change. We need to lift all the entrepreneurs up so that they can, in turn, become investors and lift others. First, we need to overcome unconscious bias with respect to how we apply pattern recognition on potential entrepreneur clients and which questions we ask to ensure a fair assessment.
GD: Many entrepreneurs want to know what the investors view as red flags. What can you tell them?
GT: You can’t have a difficult personality. Ultimately, we invest in people and it’s the people who happen to have the ideas or technology or business model that can generate returns. Founders must be coachable and listen to your advice. I have a few examples of founders being nice until they cash the cheque, then they’ve ghosted us.
As investors, we don’t want to take your company over: this is a preconceived notion that can cause friction. We’re entering into a 7-10 year relationship so we want to ensure that there is affinity with our team of investors and that you have good group dynamics within your team of co-founders. Solopreneurs are generally less interesting unless they are willing to take on a co-founder as 3-person teams have been shown to fare best.
Critical experience including their past efforts raising money, their ability to communicate, transparency, legitimacy and the level of thought that they’ve invested in solving the problem all come into play.
GD: You’ve likely seen hundreds of startups pitch. Do any memorable pitches stand out and why?
GT: Oddly, as soon as you said that, the first few examples that popped into my head were the bad pitches! I’ve seen several where it’s unclear what the entrepreneur is selling or which problem s/he is solving, even after 10 minutes of pitching. If you can’t communicate your vision, the deal will never happen.
Many pitches have data-heavy, verbose slides which obscure the potential value of the business. Sometimes, the pitches are amazing but there is vapor behind the curtain. In some other examples, our team or panel of investors has genuinely been afraid to look behind the curtain. And that’s the whole objective of a pitch – you want to share enough to entice a look.
GD: How has investing changed over the last few years? Are there any key trends that you’ve noticed?
GT: Raising money in NJ has been particularly tough over the last decade. Since the 2008-9 economic downturn and financial crisis, many high net-worth individuals in pharma have left the state. This has impacted funds available to the Angel network. On the positive side, the Angel asset class has evolved and expanded quickly. There is tremendous potential for new investors to onboard and help women and minority groups because diverse portfolios always post better returns. Yes, the risks are high so you need to take an educated and informed approach to your investment.
GD: Since you’re one of only a few female investors, do you have a message for other potential female investors and is that message any different for male investors?
GT: As a Golden Seeds chapter, we’re always looking for collaborative investors who want to help us grow the ecosystem, to mentor upcoming leaders and to be an active part of the community. Both men and women are welcome as investors. As an Angel network, we exchange a lot of ideas and deals. My advice to new investors is to educate yourself on the asset class. Some people come in then exit because they didn’t realize how risky it is. Others tend to underestimate the value and rewards associated with mentoring and giving back until they’ve joined the network.
GD: If you had to communicate one message, what do you want people to know?
GT: Don’t give up! Keep going. Many entrepreneurs think that they have to conform and be a certain way. Not so. You don’t need to put yourself in a box: you have to bring the pieces together and find the path that works best for you.
GD: Investing isn’t without its challenges, but it does have its moments. What are some of your cherished memories as an investor?
GT: Exits are incredibly exciting! One of our Brazilian startups, founded by one woman and two men spanning Brazil and Ireland, developed Love Mondays which provided insights on local businesses. We mentored them from the beginning, accelerated them and they took off. Not long after, they were acquired by Glass Door which has a similar offering and that was a memorable experience.
GD: Thank you, Gina for your perspective and the contributions you’re making to NJ businesses and entrepreneurs from around the world.
For those that want to learn more about investing, the benefits of a diverse portfolio and other insights from the Golden Seeds Angel network, consider registering here to register for next week’s webinars (Oct 21, 22 and 30).