For this week’s edition of FinanciElle “Statements”, I had the opportunity to interview Tracy Gray, Founder and Managing Partner of The 22 Fund, and Founder of We Are Enough.
From the moment I read about her in the Girlboss Article “4 Finance Founders Share The Real-Talk Business Advice They Wish They’d Gotten”, and watched her TEDx Talk, I knew I wanted to interview her.
The 22 Fund is a growth venture capital and advisory firm focused on increasing the export capacity of Southern California companies, positioning these companies to accelerate growth and scale via international sales.
We Are Enough, is an organization whose mission it is to educate women globally at every socioeconomic level and age on WHY and HOW to invest in women owned businesses and/or with a “gender lens”. They curate all the best options and make it easy for women to decide what’s right for them, based on their risk tolerance, level of participation, economic reality, investment amount, etc. Whether it’s $25, $25K or $25M, They believe there are ways to harness women’s investing power and align their investments with personal values, generate wealth…AND change the world!
Paolina: What has been your hardest experience dealing with your business and finance and what did you learn?
Finding the right people to work with and following my intuition regarding people has been the hardest experience. You can have the best idea, technology, product and all the money in the world BUT if you can’t execute on the vision or strategy, then all you have is an idea, technology or product, NOT a business.
It takes people to execute and it’s really hard and nearly impossible to start/grow a business on your own. It took me 3 years to find the right partners to start my fund. Once I did, “magic” started to happen and we were now positioned to execute on our strategy and have begun to receive capital. Without the right partners, I was constantly pouring my own money into my business which is never sustainable. You need the right people to help you along the path.
Paolina: As the founder and managing partner of a venture capital firm that focuses on small and medium sized enterprises (SMEs) and women and minority-owned businesses, what is the most common finance issue you see with companies that you target or that come pitch for you?
Lack of good financials, a realistic understanding of how much money they need to raise (men tend to think they need more than necessary and women tend to ask for too little) and being able to communicate how they will use the capital. I see this from entrepreneurs of every demographic. Know your numbers!!
Paolina: In your roles as funder through The 22 Fund and as an executive-in-residence at the Los Angeles Clean-tech Incubator, where you advise portfolio companies on all aspects of their business, you’ve come across a lot of businesses, what are three things that every business owner/entrepreneur should know/learn/understand about finance?
Take the time to learn, create and maintain the right financials and projections.
Investors want to know that you understand your numbers because we are putting our money under your stewardship. If your financials are a mess or do not make sense, it’s hard for an investor to have confidence that you will be able to manage their investment. If you are starting a business, make your financial projections the number one priority or if you are an existing business, get your financials and projections in order before you approach potential investors.
So those are my three things with my investor hat on, if I put my Buddhist’s hat on, I would add these three additional pieces of advice;
1) Have compassion – Compassion for yourself and your team, be kind. Starting or growing a business is one of the hardest adventures of which a person can ever embark. Unfortunately, capital and financials can make or break a company. Don’t beat yourself up if you mess up or fail – we have to fail to learn. I think of failing more like practicing. Be patient with your team. No one wants to follow a bully…other than other bullies. To me, a leader is someone people want to join, not just follow. They share your passion and are attracted to your energy and therefore want to see your vision come to life and see you (and themselves) succeed.
2) Just ask – Don’t worry about looking stupid. Every successful person on this earth got to where they are by asking what they didn’t know. We don’t ask questions because we want to pretend we know what we think everyone already knows. Financial stuff is hard and it doesn’t come naturally.
3) Practice Fearlessness – I have a tattoo on my wrist that says “abhaya”. Abhaya is Sanskrit or Hindi for fearlessness or non-fear. Our fears hold us back and cause us to suffer. So, how can we be successful financially, personally or collectively if we start from a place of fear or scarcity? We all need to start from a place of wonder, joy and unlimited possibilities. I especially think this about women entrepreneurs. We tend to start from a place of conservation and fear when it comes to our capital; whereas, men are overly confident and shoot for the moon. It’s not our fault. We are socialized this way. Research shows that when women pitch their companies to potential investors, they are asked question, by male and female investors, geared toward protecting the investment. Men are asked question more about how massive they can become. We need to ask for what we want and deserve NOT for only what we need.