Lisa Friedlander: Reflections And Insights On What It Means To "Venture" Beyond Expectations In Life And Career
Lisa Friedlander, Marketing Business Development Executive, NEXT powered by Shulman Rogers
The word “investment” can mean many different things to many different people. As women, we invest so much of our time, passion, and yes, our money, into the people and causes that matter to us as individuals. Together those investments power the whole world.
Lisa Friedlander knows more than a little about investments. As an angel investor, entrepreneur, financial expert, and philanthropist, her expertise covers multiple intersections and combines a deep understanding of both the world of business and the world of individuals.
The Fem Word’s Monika Samtani and Emily Montague had the privilege of sitting down with Lisa to discuss her views on life, finance, and the many ways our human potential unfolds in the financial realm. We hope you enjoy hearing from her as much as we did!
First off, thank you so much for taking the time to talk with us, Lisa. Before we dive into the big topics, we were hoping to learn more about you. What were your first experiences with money and finance like? How did they shape your views and perspectives on life?
It is such an honor to be part of The Fem Word community! I have been watching and reading since you launched and so impressed and inspired by TFW’s journey! Thank you for having me!
My first introduction to real world finances was when I held my first job in high school. As soon as I was able to drive, I got a part time job at a clothing boutique after school. I loved so many things about this job – the feeling of independence, helping people feel and look good, fashion, and of course making my own money! I do remember being shocked when I received my first paycheck, as every young person is, and learned about taxes for the first time! Quite a rude awakening! Growing up, my Dad always instilled in me a sense of personal responsibility for finances and budgets. He worked so hard as an attorney and taught all of us about the value of a dollar at an early age. However, it wasn’t until I was married that I really took an interest in personal finances and financial wellness. It was very important to me that I contribute financially to our family and my husband Scott always stressed that I needed to be equally knowledgeable about our family’s financial well-being and future. We too have made it a part of our parenting style to always instill in our kids the value of hard work and financial responsibility and financial independence. Of course when I co-founded my startup, and then became an angel investor, I learned so much more about finances from a business perspective. While I have never been a “math person” per se, I now love digging into the numbers and watching companies take investment dollars and scale a company.
Lisa founded the Heartsongs Luncheon Fund in 2001 for Children’s National Medical Center
I do want to add that I have always been keenly aware of the blessed life I have had an opportunity to lead, both financially and otherwise. I have never had to experience significant financial stress and for this I am extremely grateful each and every day. Giving back to my community is an integral part of this gratitude.
So it’s a lesser known fact that married women were only guaranteed the right to own credit cards in their own name in 1974. Until that point, banks could and did deny married and single women credit unless a husband or other male co-signed for them.
As one can imagine, it’s pretty hard to start or maintain a business without lines of credit from a major bank. How have barriers to financial access like this one impacted the trajectory of business ownership for women in the USA? Are we still seeing the effects of negative bias against women business owners when they seek funding today?
There is no question that an implicit bias exists for women business owners across a variety of areas, including seeking financial assistance via our lending institutions or via raising capital. The statistics are abominable and honestly pathetic. A mere 3% of all venture capital investments go to women-led companies, .6% to Black female founders, and .4% to Latinx founders. Despite the fact that female founded companies tend to exit faster than the overall market, female founders only are a mere percentage of all Venture Capital investments. We also know that 1.5% of high-net-worth women are angel or venture investors while 30% of high-net-worth men are angel or venture investors. While these stats improved slightly in 2020, they were back down again in 2021 and overall have not changed in decades. It’s an embarrassment. This is a critical reason why I joined Citrine Angels – women investing in women – and we hope to dramatically change these numbers by creating more female investors while providing capital to female business owners.
As more and more services adapt to digital business models, there’s going to be some major fluctuations in how much funding a startup needs to, well, start up. Working with and on Shulman Rogers’ NEXT platform, you probably have a more long standing perspective on the pros and cons of a fully digital business model.
Could you tell us a bit about the principles and goals behind NEXT? How has “digitizing” legal services impacted accessibility in relation to your firm, and what could it mean for the industry in general?
Lisa with the NEXT team at Nasdaq
NEXT, powered by Shulman Rogers, is an innovative new model for the delivery of legal services to startup and emerging growth companies. NEXT delivers the highest quality legal services at predictable, reasonable and sustainable fees. Our core philosophy is “CLIENT FIRST” which drives everything we do. We meet our clients at the intersection of legal, business, and strategic advice and take the journey with them. Our experience as entrepreneurs, investors, and attorneys informs our every move and allows NEXT to be a true partner. NEXT has productized a broad range of legal services for the full life-cycle of startup and emerging growth. NEXT clients have direct access to senior business attorneys on all strategic and key business/legal decisions. Each client also receives a customer relationship manager to coordinate and manage services across projects. NEXT leverages a range of cloud-based technologies and new business models to create and deliver a unique and powerful client-centric experience. We believe that this innovative model is the “future of startup law” if not an entirely better legal approach. Shulman Rogers is a full-service law firm with its principal office located in Potomac, Maryland and branch offices in Tysons Corner, Virginia and Washington, D.C. Today, with 80+ attorneys, 30 legal assistants and more than 50 other staff and support personnel, the firm is organized into six general operating departments: real estate, business & financial services, commercial litigation, technology, media & telecommunications, contingent litigation, and trusts & estates.
For those unfamiliar with the term “angel investors,” we wanted to give a bit of background on what this type of investment is meant to accomplish. Could you give us a quick summary of what angel investing is, and what it means to you, specifically?
Angel investing is when individuals (typically high net-worth individuals or groups of individuals who qualify as accredited investors under SEC regulations) provide capital to early stage companies typically in exchange for equity in the company. Angel investors often contribute funding alongside a “friends and family” round or even following this initial fundraise. Angel investors may also provide advisory services alongside capital in many cases.
Lisa Friedlander and Ilene Miller founded Activity Rocket in 2013. Lisa led the company as CEO, and Thrively, a west coast edtech company, acquired Activity Rocket in 2017.
Angel investors were critical to the growth of Activity Rocket, the startup I co-founded with my dear friend Ilene Miller. We each had put a small amount of money into developing our beta product or “minimum viable product” to test the concept of Activity Rocket. Very quickly we knew we were on to something and wanted to launch a full service e-commerce marketplace platform connecting busy parents with a variety of activity and camp providers in the DC Metro Area. To take this next step, we knew we had to raise outside capital. Alongside several family members and friends, we secured investment from two incredible Angels whose expertise and guidance was equally if not more valuable than their monetary contributions. I firmly believe that, if it were not for the support, financial and otherwise, of these 2 individuals, Activity Rocket would not have been successful; ultimately selling the company to a west coast education technology company. It was this experience that introduced me to angel investing and I promised myself if I ever had the opportunity to pay it forward I would jump at the chance! Citrine Angels provided me with this incredible opportunity and we just celebrated our two year anniversary in September of 2021.
We’ve seen a major trend in community-supported artists and platforms lately, and a lot of experts are predicting that the business world will become much more “personal” over the next decade.
When we’re talking about funding and startup investment, what role does a company’s brand or mission play in attaining support?
I believe it plays a huge role; especially for investors that are particularly thoughtful about their investment thesis. An investment thesis guides an investor and helps narrow down the types of companies that one is willing to support. For me – my investment thesis is focused on funding women-led companies, social impact companies, disruptive companies, and health/wellness companies. This doesn’t mean that I will never invest in other types of startups but this is where I choose to focus my dollars and attention. I absolutely believe that a company’s brand/mission plays a critical role in investment decisions and will continue to do so. I further believe that a company’s brand/mission plays a critical role for its customers too and will be key to its overall success. Both customers and investors have limited dollars and attention spans and I believe will only be loyal consumers to those companies that are brand/mission aligned to the community, or communities, that those customers and/or investors also belong.
How does accountability to this mission factor into the funding process?
For angel investors, and angel groups tied to specific industries or missions or investment theses, running an authentic company that is walking the walk and talking the talk is paramount. It will be difficult to seek funding based upon a stated mission/brand if the founding team is not truly aligned with such a mission. Smoke and mirrors are easily discarded.
“I guess my core belief on feeling powerful or being powerful can best be summed up by one of my favorite quotes (which may also resonate with other women on this topic) is from Nelson Mandela – it reads, in part:
“Our deepest fear is not that we are weak. Our deepest fear is that we are powerful beyond measure. It is our light, not our darkness, that most frightens us. We ask ourselves, who am I to be brilliant, gorgeous, talented, fabulous? Actually, who are you not to be? … You playing small does not serve the world. …”
Since community fundraising seems to be more and more popular, especially thanks to platforms like GoFundMe in the personal realm or IndieGoGo on the business end, there’s this perception that fundraising has become somehow easier for the average person to achieve.
Is there any truth to that assumption? What are some of the realities or challenges of fundraising that you wish more people were aware of?
I would not say it's easier to raise capital but I would agree there are more opportunities to do so for the average person, as you say. Crowdfunding was a huge change to our capital system, and with even more recent rule changes, an entrepreneur has the ability to raise up to $5 million via equity crowdfunding. Another benefit is the marketing aspect of raising funds from a potential community of customers that then hopefully become your most loyal and ardent followers and brand ambassadors. We at NEXT work with our clients all the time to use this powerful resource (and yes we do have a fixed fee crowdfunding package). However, a crowdfunding campaign still requires significant resources in money, time, marketing power, and expertise. You have to start with a minimum investment typically of $50,000 for example. Not every company is a good fit for crowdfunding as well. We spend a lot of time speaking to our clients about whether equity crowdfunding is right for them; including putting on webinars and publishing articles like this one on our blog.
Switching gears a bit, let’s talk about Activity Rocket, a company that you co-founded and ran as CEO in 2013 - and later sold to edtech company Thrively in 2017. Activity Rocket was a marketplace for kids camps and activities via one aggregated platform.
When you were working to found and run this company as CEO, how did you gain recognition for the company’s mission and attract funding on that basis?
When we raised money for Activity Rocket, we had already proven the concept that both parents and activity providers were interested in and would use a marketplace website to advertise and book afterschool activities and camps. However, when we raised [our initial funds] we were pre-revenue so all our investors had to go on when making this investment decision was us – the team – and the traction we had shown to date with our beta website. Thankfully it was enough to attract sufficient capital to move to the next stage of growth. Then, after we successfully raised for Activity Rocket, the majority of the funds went to building out our e-commerce website. This meant we had very little money for marketing. This, in turn, meant we had to be super scrappy and grassroots focused to get the buzz out to both parents and activity providers to spur growth. We used both digital marketing tactics as well as participated and created live events to help spread the word in our community. We hired a team of dedicated Rocketeers to drive revenue and recruited local ambassadors at schools to talk about this new great tool for parents.
I think throughout the whole process Ilene and I showed great passion, dedication, determination, and willingness to learn quick [and] fail fast to get us to the next level of growth and this was key to our ultimate success.
During the "Great Resignation" of 2021, many people, especially women, have left their day jobs and turned to entrepreneurship as they reevaluated their lives. According to the US Census Bureau, about 4.3 million new business applications were filed in 2020.
Today there is a new wave of feminine leadership - and female co-founders are less of a rarity. But there’s no job description to tell you how to manage the co-founder relationship - whether it’s female or not.
As a business owner and entrepreneur yourself, how did you deal with the stress of building Activity Rocket from the ground up? What ground rules did you set in place with your female co-founder? Is there anything you’d do differently if you could go back in time and start that project over?
Lisa Friedlander and Ilene Miller, Activity Rocket
I could talk about this topic for forever! I have to say I struck gold with my work wife/co-founder Ilene Miller. You can’t plan what may or may not happen when you launch a business with someone (whether family, friend or stranger) but Ilene and I expectedly or unexpectedly were a fantastic pair. Our skill sets and demeanors were the perfect complement – my yin to her yang – and we both had and still have the utmost love and respect for one another. There is NO way I could have launched Activity Rocket without Ilene. I just simply would never have taken the leap. I am forever grateful that we found each other and both blindly jumped off the cliff together!
I will say, maybe because we are both attorneys or maybe because we are process driven (Ilene way more talented in this area), we did set ground rules right off the bat and when we formed our company we executed an agreement between the two of us outlining a whole variety of circumstances of how we would handle the company. We also set up clearly defined roles and responsibilities and, while we both did a lot of everything, we each took onus for our areas and deferred to the other when making decisions in our sectors of expertise. I highly recommend doing the same! As you have heard, even with the best of intentions with people you care about and even love, shit happens and things go wrong! Best to have as much outlined ahead of time as you can, even knowing you won’t be able to predict everything that might come your way.
There are SO many things we would have done differently! But honestly if we had known better in many cases we may not have moved forward - so in some sense ignorance was bliss. Our biggest Achilles heel, no doubt, was launching a tech company without a technology team member. We knew this was our great weakness and we were constantly looking to fill this role but sadly we never did. But if any founder looks back and says there is nothing that should have been done differently, there is something seriously wrong and I call BS! Part of launching a startup is making mistakes – lots of them – learning and growing from them and doing it better the next time!
How can smaller businesses or individuals with less capital engage in angel investing without taking on too much risk? Without the resources of a larger, well-funded corporation or individual investor, the margin for error is wider and most small entities simply choose not to participate in angel investing at all. Is there a way for these entities to take part in this kind of investment without taking on as much risk as better-funded participants?
As mentioned, to be an angel investor and provide capital directly to startup companies one has to qualify as an accredited investor under SEC guidelines; this may prevent people with less financial resources from participating in this manner. However, with equity crowdfunding platforms, like WeFundr and Republic, anyone can invest and do so in much smaller dollar amounts. You can also participate in other non-equity crowdfunding platforms like Kickstarter. Typically you will see investment advisors recommending that high risk investments like those made when investing in early stage companies be no more than 5-10% of your total investments made and correlate to your appetite for risk.
CSR, or Corporate Social Responsibility, has been a major topic of conversation lately. How can small or midsize businesses and their stakeholders maximize the impact of their investments in social programs, charitable causes, or other initiatives for the common good?
CSR and/or ESG initiatives are really important and I am very happy to see they are being implemented by many companies, both large and small. Conscious capitalism is here and is the wave of the future and something that I personally believe in to the core. There are lots of ways small or medium size businesses can get involved in these programs and have social impact. For one, a business owner can get involved in a local chamber of commerce or small business association and mentor or advise other business owners that may have less expertise or experience. Business owners can also get involved with their own startup ecosystem and focus on social impact organizations like Halcyon, Seed Spot, or Conscious Venture Labs here in the DC Metro region. Finally, there are companies like Goodworld who, through their payment processing systems and other services, help companies give back in a greater way!
You are an attorney, entrepreneur, and angel investor - and a mother of three wonderful kids [including two daughters]. There’s one question we always ask our guests, and it gets to the core of your unfolding story. Could you tell us about a moment when you felt truly powerful?
Powerful. Hmm. When I think of the word, so many thoughts come to mind as [to] what it means to feel powerful. Strength of course, in both body and mind, successful, grounded, accomplished, grateful, and proud all resonate. In my personal life, I can say I have certainly felt powerful as a Mom many times - typically when one of my kids shows his/her own resilience, strength, or has a successful moment - I feel power in my pride and gratitude for them. I have also felt like a powerful friend or family member when I have made a difference in someone’s life. I have felt powerful in numbers when joining, for example, the Women’s March in DC in January 2016 or a Black Lives Matter protest with my three kids on Juneteenth in Annapolis, MD. I have felt the power of philanthropy after hosting a successful fundraising event for Heartsongs or at the conclusion of a Teens with Heartsongs program. I have felt the power of inclusivity after attending a Main Street event. I realize these thoughts may not be exactly responsive to “when did you feel powerful” but I truly found my power in each of these examples.
Lisa Friedlander with her family
I have also had many professional moments, large and small, over my career as an attorney and founder when I felt powerful. Most significantly, when Ilene and I sold Activity Rocket and flew to California to meet our new owners and joined their team as successful entrepreneurs that built something literally from nothing – this was powerful indeed. And on the small moment side, when Ilene and I would pitch potential investors we had this tradition that we raised our arms up high over our head right before walking in – “arms up ladies” we’d say! We had read that this exercise made one feel powerful and imbued positive energy and we agreed! It worked! We often still say “arms up” to each other to mean you got this, or you go girl, or you are powerful!
I guess my core belief on feeling powerful or being powerful can best be summed up by one of my favorite quotes (which may also resonate with other women on this topic) is from Nelson Mandela – it reads, in part:
“Our deepest fear is not that we are weak. Our deepest fear is that we are powerful beyond measure. It is our light, not our darkness, that most frightens us. We ask ourselves, who am I to be brilliant, gorgeous, talented, fabulous? Actually, who are you not to be? … You playing small does not serve the world.”
This quote reminds me to lean into my power (all of our power) and not to be afraid of how strong I am (we are) or could be if I (we) unconditionally and whole-heartedly recognized my (our) own power and refused to let anyone, myself (ourselves) included, limit this power in any way.
This interview is made possible by our partner Foumberg, Juneja, Rocher & Company (FJR), a Certified Public Accounting Firm licensed by the California State Board of Accountancy which allows The Fem Word to highlight women leaders.
The views, thoughts, and opinions expressed in this article belong solely to the interviewee, and do not necessarily reflect the position of The Fem Word organization. Any content provided by our interviewees are based on their opinions and are not intended to malign any religion, ethnic group, club, organization, company, individual or anyone or anything.