Carlos Miguel Gutierrez is the Founder and CEO of Highline Point Group, LLC, a strategic advisory firm based in New York City. An investor and advocate for entrepreneurship, he is also a Managing Director of Golden Seeds, one of the nation’s most active early stage investment firms. Carlos also serves as the Executive Director of the Ignite Institute at Saint Peter’s University, which focuses on fostering entrepreneurship. He is a contributor to The Huffington Post, The Times of Israel, Asia Times, and The Jerusalem Post. His writing has also been featured by CNBC, Univision, and El Pais. You can follow Carlos on Twitter @cmgutierrezjr.
I'd love to start with a little bit of your background and how that led you to the world of early-stage startups.
I've had experience in various Industries: politics, government, international development, government affairs. I'm a lawyer by training and I also went to grad school for business leadership. All of these things helped me when I decided to really get into investing.
I was always interested in public companies. But as you know, investing in public companies is very passive.
I had the opportunity to make my first angel investment a few years back, and I realized I could really be more hands-on, almost like a part of the extended team of the company. I could use my background and network to help the company and really see myself adding value -- so I was hooked. It’s very interesting to work with people who are passionate and who have identified a solution to a big problem. I think just by osmosis, it makes you passionate.
Can you talk a little bit about some of the roles you had within the venture ecosystem?
I've been an advisor, a mentor, and an investor. I have gotten involved with various groups and organizations, not only to invest in Innovative companies and entrepreneurs, but also with a mission-driven approach that has a social impact.
I was introduced to Golden Seeds a couple of years ago and was very impressed. Golden Seeds is the most active angel group investing in women-led companies in the United States, having invested over $110 million in women-led companies over the last 10 years. We all know about the funding gap that exists for women and minorities -- even geographically. So naturally there is a great opportunity there. I always tell people that yes, there's a social component to it, which is helping women who are not receiving funding anywhere near the levels of men. But the second part is that if you look at the data, women-led companies tend to perform better than those led by men, and diverse teams perform better than homogeneous ones. You can create a pretty strong investment thesis behind that.
Through my work with Golden Seeds, I was introduced to Chloe Capital, an early stage VC firm that invests in women-led founders and diverse teams by ethnicity, gender, and geography. They’re an extremely passionate team, so I’m very glad to be able to lend my insight to that mission as an advisor.
I’ve also invested as an angel across various verticals, including cybersecurity, ed-tech, financial services, entertainment, and retail-technology among others. Additionally, I’m a mentor with the Stanford Latino Entrepreneurship Initiative, a program that helps Hispanic & Latino entrepreneurs learn about scaling their businesses.
I really enjoy being around entrepreneurs.
When making investments, are you mission-oriented or financially driven?
A little bit of both. I'm industry agnostic, and like any investor, I’m looking for businesses that have the potential to grow to be very big. I’m not focused on any particular market.
Yet, within that basic thesis, I am also looking for underrepresented founders, who by the way are just as good as everyone else; but who are not receiving the attention that they should be, or they don’t have access to networks or mechanisms that will allow them to go out and raise funds.
With that said, there are many opportunities within specific segments. For example, there are businesses targeting certain demographics that may perhaps only come from a demographic that understands that need. That’s where, as an investor, you have to keep an open mind, because there have been many great opportunities that have been passed on by investors because they lacked that open mind. If you look at Spanx, the founder had a tough time convincing male VCs about the product, and those who didn’t invest missed out on an amazing story.
One thing that you mentioned that keeps me up at night is access. So much of the traditional venture landscape is premised on raising friends, family, and angel money in order to build traction, reputation, and network to then raise venture capital. Especially with underrepresented demographics, this track becomes increasingly challenging, especially on a socio-economic basis. Do you think there has been any sort of structural solution to this challenge of getting ‘inception’ capital, and has it changed over time?
I do think that never before has there been so much attention placed on the problem. Everyone is talking about it. From a structural perspective, I think that there are more VC funds and angel investors who are specifically looking to be the very early stage investors in companies that are founded by entrepreneurs of backgrounds that are typically underrepresented. So there is a lot of activity.
Yet, at the same time, it is a little bit disappointing when you see how much activity there is, and then you see the data, and you’re like, ‘Wow, we barely made a dent’. So, there's definitely a disconnect there. Going back to your question, often times, you might hear investors ask an entrepreneur, “Who’s invested in your company? Have your friends and family invested?” Some investors consider that your friends and family know you best, and if you can’t convince them to give you money, then, something’s not right there and they might move on.
The problem with looking at it that way is that, as you mentioned, not only are you missing out on a potential opportunity, but you're also ignoring socio-economic realities. Not every entrepreneur has access to friends and family that can fund their company.
So, I think that requires a shift in thinking. I think there are people -- both angel investors and firms -- that understand the reality of the underfunding gap, and they’re looking at it differently. One change that’s taking place -- and will take a few more years to reach a critical mass -- is increased diversity in investors -- not only in angel investors and LPs, but also in venture capital fund investors who bring a different perspective and mindset. But as I mentioned, it does still appear from the data that there's a lot of work that needs to be done.
Also, founders to a certain extent are very important in this discussion. For example, I've spoken to founders who say that they wanted to talk to Golden Seeds because they want women investors because they don't want all their investors to all fit one certain profile.
And, then there's also pressure even just from society. You see that across all Industries, whether it’s changes to representation or to pay. A societal shift is going on, and we're all putting pressure to create positive change.
I’m really interested to see how the dynamic will change from the LP level and whether there will be pressure from institutional investors, fund-of-funds managers, even high net worth individuals who are making investments into funds, and whether this topic is going to become a priority for them. What's your experience been with that from an LP perspective? Is this something that's picking up momentum?
I think the rise and success of funds investing in underrepresented entrepreneurs is indicative of the desire of LPs to invest in those companies. The conversation does come up more, and I think it goes back to what I mentioned earlier -- not just from a societal perspective, but also in terms of the recognition that there is a thesis behind investing in underrepresented founders.
I think the signs are positive from all angles, moving in the right direction. It’s incremental and it's going to take time, but I think the industry is moving in the direction of better representation.
How do you think about your different investor roles, as an LP, a fund manager, and an angel investor? What are the benefits of the different structures/vehicles for you personally?
One very basic answer is just for the sake of diversifying. As you know, it’s very risky to invest in early stage companies. The risk of failure is very high. In terms of diversification, I think it makes a lot of sense to invest as an LP in funds that have greater resources than you do as an individual, not only to conduct due diligence but to be able to source deals and cast a wider net in building a portfolio.
In terms of being an angel, it's very rewarding. To do your due diligence, go through the process, meet an entrepreneur, learn about what they're passionate about, and be able to say ‘I can be helpful’. So if I meet companies where I don't understand the industry or have a background/network that can be helpful, then it's not as exciting or interesting for me because I can't really add a lot of value. I like to be able to help when/where I can, which is what entrepreneurs are looking for as well -- they want strategic value beyond just writing a check.
Both methods are great ways to get exposure into a very exciting asset class.
What advice do you have for people who do not typically have experience with a start-up or even with technology necessarily, but are looking to gain exposure to the VC industry, which can be very daunting and insular from the outside looking in?
If you’re interested in learning about venture, start going to events. Start going to pitch events, demo days, panels -- there are so many activities where you can just go and learn not only about the industry, but also the language and terms used in the industry. Over time, when you're involved in venture capital or angel investing, there are things that you learn from being involved and gaining experience. You can read a book, but it's not the same. So I would say number one is to just get involved and seek out opportunities where you can be around people who know the industry, gain that entry level knowledge, and start networking.
Beyond that, I think joining an angel group is a great way to learn about investing. In my case, I had my own due diligence process that I had learned on my own. Golden Seeds has a very institutionalized due diligence process and I learned a framework that I could place on top of my own framework when I invest. Also, in an angel group, you're surrounded by other individuals who have broad experience across various Industries and verticals, and it's helpful to hear how other people are thinking about companies and what questions they’re asking. This expands how you would assess a potential opportunity.
It’s also a little bit tough if you're just entering the investing world, looking for deals and sourcing deals by yourself. It helps to have an angel group that not only sources but also screens deals, so you look at companies that are at a certain stage, have been derisked a little bit, and have been evaluated by people who know what they’re doing. That way, you don’t have to go out there and invest blindly.