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Dahna Goldstein: “Building a business is hard”

…Humble founders who know what they don’t know. Confidence goes a long way, but knowing what you don’t know as a founder is important. It creates an openness to other expertise and to other ideas that can help the business in sometimes unexpected ways. Halcyon Angels investors invest more than their capital. They also bring […]

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…Humble founders who know what they don’t know. Confidence goes a long way, but knowing what you don’t know as a founder is important. It creates an openness to other expertise and to other ideas that can help the business in sometimes unexpected ways. Halcyon Angels investors invest more than their capital. They also bring their experience and networks to bear on investments whenever it makes sense, and look for founders who will be excited to leverage that experience to benefit their venture.


As a part of our series about “Social Impact Investors”, I had the pleasure of interviewing Dahna Goldstein, Director of Halcyon Angels.

As the Director of Halcyon Angels, a regional network of impact-focused angel investors, Dahna Goldstein is helping to build the social entrepreneurship ecosystem, building on experience as a social entrepreneur and advisor to social impact organizations.

Dahna is co-founder of Resistance by Design, and a Senior Fellow in the Digital Impact and Governance Initiative at New America. She was the founder and CEO of PhilanTech, which was acquired by Altum in 2014 where she continued to serve as Director of Philanthropy Solutions. Prior to starting PhilanTech, Dahna worked for venture philanthropies, including Ashoka and Blue Ridge Foundation New York.

Dahna was named one of Newsweek’s “13 Women Entrepreneurs to Bet On” and one of BusinessWeek’s “25 Most Promising Social Entrepreneurs.”


Thank you so much for doing this with us Dahna! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a story about what brought you to this specific career path?

When I was in college, I stumbled upon the concept of social entrepreneurship before I even knew what to call it. As part of a service learning class my sophomore year, I volunteered as a tutor in the local middle school. I learned that the school library hadn’t had a budget to buy new books in over five years, so I collaborated with a group of student musicians of which I was a part to create an album of original songs, sell it, and donate the profits to the middle school to buy books for the library. The project was so successful that we recorded an album each of the next two years, and donated proceeds to different local community groups. That experience inspired me to pursue that combination of entrepreneurship, creativity, and social impact. I went on to start PhilanTech, which created software to streamline the grants administration process for nonprofits and foundations, and co-found Resistance by Design, which amplifies and empowers underrepresented voices through the alchemy of art and activism.

Can you share a story with us about the most humorous mistake you made when you were first starting? What lesson or take-away did you learn from that?

In hindsight, many things are humorous that are not so funny at the time. In the early days of PhilanTech, I was impatient and eager for product development to move more quickly. I’m not a developer. I can read code and write a bit, but it’s not my skillset. I thought I might be able to speed things up by jumping in and contributing some code. My developers very quickly — and politely — asked me to stop. My takeaway (other than a bit of patience) is to hire the best people, then support them and get out of the way.

Are you able to identify a “tipping point” in your career when you started to see success? Did you start doing anything different? Are there takeaways or lessons that others can learn from that?

I was fortunate to participate in a program created by the marketing visionary Seth Godin with 10 other women entrepreneurs. We spent a few days with him, during which time he effectively helped us break down our businesses into component parts, and build them back up again. The tipping point for me was talking to Seth about sales. I’m not a natural salesperson — I’m reticent to make specific asks and as a result was having a hard time closing deals. Seth laid out the sales dynamic for me in a way that changed my mental model. He said, “When you ask for someone’s time, for a meeting or a phone call, you’re essentially creating a compact with that person. You’re asking for their time, and they’re giving it to you with an expectation that it will be worth their while. If you enter a meeting without an objective and leave without making an ask, you’ve broken your end of the compact.” The first sales meeting after my time with Seth, I ended the meeting by saying, “I’m here because I want your business.” I closed the sale and the prospect became one of my company’s best customers. The takeaway isn’t necessarily to be that direct, but to know that making an ask is not only ok, it’s often expected.

None of us are able to achieve success without some help along the way. Is there a particular person or mentor to whom you are grateful who helped get you to where you are? Can you share a story about that?

I’ve been fortunate at every stage of my career to have been supported, inspired, and surrounded by amazing people. Being a founder can be lonely at times. The weight of the venture — its employees, customers, investors — rests on your shoulders, and while having a strong team is critical, there are some challenges that benefit from an outside perspective. I’m very lucky to have a peer advisory board: three other women founders. We get together regularly (virtually at the moment) and leverage each others’ experiences as peer mentors. It’s a structure and support system I highly recommend, if you can find a group of people who have somewhat shared entrepreneurial experiences and a willingness to be open and giving with each other. It’s particularly important for underrepresented founders to have access to those kinds of support systems and networks as they navigate the challenges and opportunities of social entrepreneurship.

You have been blessed with great success in a career path that many have attempted, but eventually gave up on. Do you have any words of advice for others who may want to embark on this career path but are afraid of the prospect of failure?

I understand that the prospect of failure is scary; it was (and is!) for me, too. It’s important to remember that most failures are not catastrophic. Entrepreneurship is filled with small failures — everything from a product feature that isn’t well received to a marketing initiative that flops and so many more. Each of those failures creates a learning opportunity: what went wrong? What could be tweaked to make the next attempt more successful? It’s on the backs of those small failures that success is built, and learning from failures shows the kind of resilience that Halcyon Angels and other investors look for in entrepreneurs.

Ok, thank you for that. Let’s now jump to the main part of our discussion. The United States is currently facing a very important self-reckoning about race, diversity, equality and inclusion. This is of course a huge topic. But briefly, can you share a few things that need to be done on a broader societal level to expand VC opportunities for women, minorities, and people of color?

By now, many people are aware of the stats — 77% of founders of VC-backed companies are white; woman-funded startups receive less than 10% of venture funding annually. The problem is clear, and has been for a while. The investing world — and the country at large — has such engrained patterns and barriers that they might seem intractable. But they aren’t. There are two narratives that need to change: the stories that pervade public imagination about successful entrepreneurs, and the stories that investors tell themselves.

Stories like this one help with the first narrative. We need more stories in mainstream media highlighting the successes of women founders and founders of color — not in special sections or issues, but in everyday coverage. The investor narrative that needs to change is the mistaken idea that successful entrepreneurs look like the successful entrepreneurs investors have seen before. For investors, this may mean getting out of comfort zones, and stretching beyond existing networks. For any investors who aren’t sure where to start, find the organizations in your local ecosystem that are supporting women entrepreneurs and founders of color. Talk to them. Learn about the ventures they’ve incubated or seeded or watched pitch. It’s up to investors to be proactive to change the narrative, and that’s a big part of what we’re trying to do with Halcyon Angels.

You are a VC who is focused on investments that are making a positive social impact. Can you share with us a bit about the projects and companies you have focused on, and look to focus on in the future?

Halcyon Angels’ thesis is that impact-driven companies outperform their competitors because they have impact baked into their DNA. We’re industry agnostic, and look for companies that are pursuing some positive impact in a way that’s so intrinsically tied with their business model that when the company succeeds financially, it creates impact, and when it creates impact, it succeeds financially.

We don’t see pursuit of impact as concessionary. Customers and employees increasingly care that companies are doing the right things, not just saying the right things, which creates opportunity. It’s not just that customers might be willing to pay a premium for, say, a certified green product — it’s that the product is actually better — for the customer, for the world, and more profitable for the company. Our first two investments are in companies that manifest that intersection of impact and profit in very different industries: community solar, and ed tech. We will continue to look for those companies that are leveraging their impact to create sustainable competitive advantages.

What you are doing is not very common. Was there an “Aha Moment” that made you decide that you were going to focus on social impact investing? Can you share the story with us?

I’ve been focused on impact for most of my career; the shift to the investing side of the social impact table is relatively new for me. I thrive in environments where I’m creating something that does something good for the world, and the “aha moment” for me was when it clicked that social impact investing was in fact creating something — not my own thing, but marshalling resources to help others build theirs.

For Halcyon, the “aha moment” was a little bit different. The Halcyon Incubator has provided residential fellowships including cash stipends, coaching and mentorship, legal and technical support, and more to social entrepreneurs for over six years, without taking equity in their ventures. In getting to know fellows, the Incubator learned firsthand about the limited investment vehicles that existed for social entrepreneurs, particularly those who didn’t fit the traditional mold demographically. So they set about forming the Halcyon Angels to fill a gap they knew existed in the investment landscape.

Can you share a story with us about your most successful Angel or VC investment? Or an investment that you are most proud of? What was its lesson?

Halcyon Angels is just getting started! We closed our first two investments in July and August and are really excited to see where they go. We’re incredibly proud of both investments — one in community solar venture Solstice and the other in ed tech platform MajorClarity — because they demonstrate right out of the gate how committed this group is to impact across sectors. The dollar amount behind those investments — a combined 630K dollars — is also something to be proud of, because it shows Halcyon Angels will be a major player in the early-stage impact investing landscape.

Can you share a story of an Angel or VC funding failure of yours? What was its lesson?

It’s entirely possible we’ll have funding failure stories and lessons to share as Halcyon Angels makes more investments. Every angel group has its failures, but this one is especially set up to incorporate learning experience so that the investors grow from engaging with one another and participating in the process. Even investments that don’t work out as well would ultimately be beneficial to the group in their own way.

Is there a company that you turned down, but now regret? Can you share the story? What lesson did you learn from that story?

No angel group or VC can invest in every venture that pitches. We use our best judgement to evaluate companies that we think best fit our criteria and will be the most successful. Time will tell where we’ve missed out on great opportunities to create impact while generating financial returns.

Super. Here is the main question of this interview. What are your “5 things I need to see before making a VC investment” and why? Please share a story or example for each.

There are a number of things that are table stakes. Entrepreneurs need to be passionate about their venture and knowledgeable about their space. They need to have a clear path to profitability and significant growth. The business needs to have good product-market fit. The market needs to be large and growing.

Beyond that, here are five things that we specifically look for:

  1. A clear pain point that can be articulated and quantified by customers. There are lots of great ideas out there, but a great opportunity addresses a clearly articulated pain point for customers, and does so in a way that makes the cost of the product smaller to the customer than the perceived cost of the pain point.
  2. Resilience. Building a business is hard. Things almost never go completely according to plan. Founders who stay true to their mission, who bounce back from setbacks, and — importantly — who think through contingencies enough to mitigate the impact of inevitable setbacks are positioned well for success.
  3. Humble founders who know what they don’t know. Confidence goes a long way, but knowing what you don’t know as a founder is important. It creates an openness to other expertise and to other ideas that can help the business in sometimes unexpected ways. Halcyon Angels investors invest more than their capital. They also bring their experience and networks to bear on investments whenever it makes sense, and look for founders who will be excited to leverage that experience to benefit their venture.
  4. The right team. Just as we look for founders who know the limits of their own knowledge and expertise, we look for founders who have already started to complement their skills and experience with team members who help create a whole that’s greater than the sum of the parts. Halcyon Angels invests at an early stage, so the company may not have a large senior team, but early hires and board members or advisors send a strong signal.
  5. Impact. Halcyon Angels’ thesis is that companies with impact at their core will outperform. Impact can mean different things, but in our lexicon, an impact-driven business is one where the impact is so core to the venture that when the business model works, the venture creates impact, and when the venture creates impact, the financial model works. And that impact has to be quantifiable.

You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂

If I could inspire a movement, it would be for all businesses to think not only about their financial performance but also about their impact on their community, their employees, the environment, and the world. While not all businesses will be impact-driven, all businesses can be forces for good — not just engaging in things like philanthropy, but thinking about and changing how the business operate. There are, of course, tremendous differences in available resources between mom and pop shops and multinational corporations, but there are opportunities to make both small and big changes that impact lives, communities, and the world for the better.

If you could tell other young people one thing about why they should consider making a positive impact on our environment or society, like you, what would you tell them?

When I applied to business school, my essay began, “There are people who want to do well and there are people who want to do good. I want to do both.” It’s easier now than ever to do both.

We are very blessed that a lot of amazing founders and social impact organizations read this column. Is there a person in the world with whom you’d like to have a private breakfast or lunch with, and why? He or she might just see this. 🙂

I’m fortunate that I get to share meals every other month (virtually at the moment) with brilliant minds from entrepreneurs to experienced investors to philanthropists exploring impact investing for the first time. Being part of the social impact community in general and Halcyon Angels in particular means that I’m able to learn from amazing founders and investors all the time. One of the things that excites me most about this work is that the founders who pitch and the investors who catalyze their ventures are among the many people driving significant change!

How can our readers follow you online?

On Twitter I’m @dahnag, and I write periodically at http://medium.com/@dahnag. Follow Halcyon @halcyoninspires on all your favorite social media channels.

Thank you so much for this. This was very inspirational, and we wish you only continued success!

Thank you for having me!


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