When an entrepreneur wants to launch a company, they typically seek start-up funding through their personal networks or, if they have a track record in business, from conventional sources such as bank loans, government grants and venture capitalists.
But if they're new to entrepreneurship and aren't close to people with the means to invest in their vision, it can be difficult to get off the ground.
The challenges faced by first-time founders—especially women—were the inspiration for a group of 10 current and former female employees of the e-commerce giant Shopify, who in March 2021 established Backbone Angels, a collective of investors dedicated to supporting businesses and ideas that are often overlooked.
"There's a misconception that there aren't a lot of women, women of colour and non-binary people looking for funding, which is simply not true," says Konval Matin, a Carleton University commerce graduate and one of the collective's 10 founding partners. "There are a lot of them. We know this from the number of applications that we see.
"The majority of these founders want to address problems that they've faced themselves," adds Matin. "People who've experienced a problem tend to be more aware of and passionate about the solution. They can design products or services that are tailored to the user experience, which gives them a good chance of succeeding.
"But when you're looking for an investment through a 'friends and family' round of financing, if you're like me, you probably didn't grow up knowing people who could write big cheques, because that type of wealth is just not equitably distributed."
By its first anniversary on International Women's Day in March 2022, Backbone Angels had invested more than $2.3 million (USD) in 42 companies, half of it going to women of colour.
Entrepreneurs apply through an online form, explaining the issue they're addressing, what their background is, who their team is comprised of, what traction they've had so far, how much money they're asking for and how they plan to use the funds. If one of the collective's members is interested, the applicant is asked to present a more detailed pitch.
Backbone Angels Offer a Spectrum of Mentorship and Guidance
Matin and her partners at Backbone Angels decide as individuals whether to invest and what amount. And beyond monetary support, they offer a wide spectrum of mentorship and guidance, tapping into their experiences at Shopify and other jobs to assist the companies they fund in areas such as customer service, law, culture, human resources, product development, design, data management, government relations, marketing and finance.
"We all have a different perspective, a different way of thinking," says Matin, who was Shopify's Director of Culture and Talent Development for six years and is one of three Carleton alumni in Backbone Angels, along with Sprott School of Business graduate Brittany Forsyth, the former Chief Talent Officer at Shopify, and Alexandra Clark, a Political Science graduate and Shopify’s VP, Strategic Initiatives.
"Even if a venture receives funding from one or two of us, the beautiful thing about Backbone Angels is that you access the expertise of all 10 of us."
Among the companies that Matin has invested in are Texas-based sustainable pre-fab home builder Astreia, digital trademarking platform Haloo and Toronto-based Daily Blends, which uses smart fridges to serve ready-to-eat fresh food 24/7 and meshes with her interest in helping people access healthy, nutritious food.
"I'm really interested in solving problems at an infrastructure level," says Matin, "and as a collective we're interested in companies that specifically solve problems through scale, because that's what we all experienced at Shopify."
As much as Matin enjoys working with her partners in Backbone Angels—women who trust and respect one another—and believes wholeheartedly in their mission, she stresses that it's not a charity, that they see business success as the key to progress.
"We all think that there should be more women starting companies, that they should own a bigger piece of the pie and become investors themselves," she says.
"I also think that the experiences they've had can play a major role in their ability to launch viable businesses.
"They can come up with better, more creative solutions because of their lived experiences, and the restraints they've faced can give them the resiliency they need to keep going and push through barriers. The problems they're tackling need to be solved. They have critical skills and knowledge—and so do we."