Have you ever wondered what truly drives someone to leap from curiosity about startups into the realm of angel investing—and what mindset shifts are crucial along the way? This episode of The Angel Next Door Podcast opens with that very question, as we explore the often untold personal and financial journeys that lie behind the checks investors write, and the ambitions founders chase. Our guest, Christa Downey, brings a unique lens as both an active angel investor and a leadership coach grounded in the vibrant startup ecosystem of Ithaca, New York. Christa Downey shares her path from engaging with the Cornell entrepreneurship community to backing mission-driven companies, investing alongside platforms like Chloe Capital and The Fourth Effect, and leveraging alternative vehicles such as self-directed IRAs to build wealth with purpose. Her commitment to fostering both financial returns and meaningful impact defines her approach and investments. In this conversation, Christa Downey dives into practical strategies for diversification, the pivotal role of money mindset for both founders and investors, and the often-overlooked emotional aspects of entrepreneurship—including navigating hard money conversations, founder agreements, and the difficult transition from founder to CEO. Listeners will gain concrete insights on angel investing, alternative wealth-building tools, and how intentional financial choices shape both companies and their leaders. This episode is a must-listen for anyone interested in reimagining their relationship with money, understanding the nuts and bolts of early-stage investing, and supporting the creation of a more inclusive, impactful startup culture.
Have you ever wondered what truly drives someone to leap from curiosity about startups into the realm of angel investing—and what mindset shifts are crucial along the way? This episode of The Angel Next Door Podcast opens with that very question, as we explore the often untold personal and financial journeys that lie behind the checks investors write, and the ambitions founders chase.
Our guest, Christa Downey, brings a unique lens as both an active angel investor and a leadership coach grounded in the vibrant startup ecosystem of Ithaca, New York. Christa Downey shares her path from engaging with the Cornell entrepreneurship community to backing mission-driven companies, investing alongside platforms like Chloe Capital and The Fourth Effect, and leveraging alternative vehicles such as self-directed IRAs to build wealth with purpose. Her commitment to fostering both financial returns and meaningful impact defines her approach and investments.
In this conversation, Christa Downey dives into practical strategies for diversification, the pivotal role of money mindset for both founders and investors, and the often-overlooked emotional aspects of entrepreneurship—including navigating hard money conversations, founder agreements, and the difficult transition from founder to CEO. Listeners will gain concrete insights on angel investing, alternative wealth-building tools, and how intentional financial choices shape both companies and their leaders. This episode is a must-listen for anyone interested in reimagining their relationship with money, understanding the nuts and bolts of early-stage investing, and supporting the creation of a more inclusive, impactful startup culture.
To get the latest from Christa Downey, you can follow her below!
https://www.linkedin.com/in/christabdowney/
Sign up for Marcia's newsletter to receive tips and the latest on Angel Investing!
Website: www.marciadawood.com
Learn more about the documentary Show Her the Money: www.showherthemoneymovie.com
And don't forget to follow us wherever you are!
Apple Podcasts: https://pod.link/1586445642.apple
Spotify: https://pod.link/1586445642.spotify
LinkedIn: https://www.linkedin.com/company/angel-next-door-podcast/
Instagram: https://www.instagram.com/theangelnextdoorpodcast/
TikTok: https://www.tiktok.com/@marciadawood
MARCIA DAWOOD
0:02
Christa, welcome to the Angel Next Door podcast.
CHRISTA DOWNEY
0:05
Thank you, Marsha. I'm excited to be here.
MARCIA DAWOOD
0:08
I am excited to have you. It's a little bit like we're going back to the true roots of the Angel Next Door podcast because we're going to get to talk to you as an angel investor, but then we're also bringing in wealth reimagined and all of the things related to money mindset and how that affects both angels founders, all the great things. So start us out. Tell us a little bit about your background and how you learned about and became an angel investor.
CHRISTA DOWNEY
0:34
I love this. I got involved when I was involved in the startup community in Ithaca, New York, at Cornell University and learning all about entrepreneurship and hearing people talk about angel investing, not really knowing, what is this? What does that mean? And could that be me? What would it look like for that to be me? So when my friend Alyssa Miller out started Chloe Capital, I started asking, what does this look like? How do I learn all of this? And she gave me some books and resources to dig in and I started digging in and shortly after found your podcast and started listening to every episode and just learning little ins and outs. Some of it doesn't quite apply to me today. And also it's been helpful to piece it all together and make sense of what this really means. What does it mean to be an angel investor? And how does one really make the most out of this journey?
MARCIA DAWOOD
1:36
Yeah, I love that. And so tell us a little bit about when you wrote your first check. What did it feel like? What was it like?
CHRISTA DOWNEY
1:43
Yes, I remember writing a few small checks at the same time. And I think the very first one was for a platform, was for the fourth effect.
MARCIA DAWOOD
1:56
And how do we love them? Just had dinner with them not too long ago.
CHRISTA DOWNEY
2:03
I was on one of their sessions today. It was fantastic. And the team is doing some such great work to support founders. And I thought, I want to be a part of this, right? That whole idea of I'm investing because I believe this product, the service, will grow into something. This company has some value. And also they have impact. They're making an impact in some way, and I want to be a part of this. And so I definitely look at both the financial side as well as the impact.
CHRISTA DOWNEY
2:35
What are the ripple effects of this? What's the world that I want to be a part of? And how am I using my money to help build that?
MARCIA DAWOOD
2:41
Okay, we've talked about the fourth effect and we talked about Chloe Capital. Tell people. So for our listeners who don't know what each of those groups do.
CHRISTA DOWNEY
2:49
I know. Yeah. So Chloe Capital is a venture fund and we look to invest in companies where founders are coming from diverse backgrounds. And these are tech companies looking to invest in everything from energy to healthcare and workforce development, as well as education tech. And so we run accelerator programs. We've got one right now in New York City. I'll be there in a few days for as part of that program. And then the fourth effect is a platform.
CHRISTA DOWNEY
3:22
I got involved because they were talking a lot about how founders can build a board. And I was thinking I wanted to be on a board. I want to. How can I use my skill as a strategic advisor? How can I support startups beyond the coaching work that I'm doing, beyond the angel work that I'm doing, doing and just looking to spend more time with people that are doing cool things, building cool things and seeing how I can make an impact. So I joined and I'm still exploring, just uncovering the different opportunities and ways that people can connect on that plot platform and learn and grow.
MARCIA DAWOOD
3:56
And so basically connects founders to potential board members, potential investors, all those things, right?
CHRISTA DOWNEY
4:03
Yes.
MARCIA DAWOOD
4:05
Perfect. So tell us a little bit about the types of companies that you've invested in. Carry on.
CHRISTA DOWNEY
4:13
Very mission driven. There's one company that I invested in because of the founder, a very cool famous founder that I wanted to get more time with. But mostly the companies were doing something. I thought the world needs this thing. So think healthcare, health, tech, right. So they're solving some problem around healthcare, over the counter, birth control, things like that. I have invested in companies because of some different climate tech. Often there's an overlap between climate and health in some way.
CHRISTA DOWNEY
4:44
Companies that are around wealth building. So I was also on one of, I think it was the early SPV for Play Money, which is a platform for angel investors.
MARCIA DAWOOD
4:55
On the show before, yeah, you are
CHRISTA DOWNEY
4:57
writing smaller, but I would say smaller checks what's in my budget. And so the platform is amazing for really showcasing what these founders are offering, what they're building and also for educating people on how to invest. What does it mean to be an angel investor? So just quick and easy online education. And what I loved was I just discovered their educational piece just as I was getting started with a self directed IRA and looking at, okay, am I on the right track in terms of investing some of my retirement dollars into startups? So I love that we're helping people to think about angel investing as something that is for everyone, something that everyone can do. Many people, right, can do and also the different ways that one can do that with and build wealth in that way.
MARCIA DAWOOD
5:57
So talk a little bit more about self directed IRAs. We've talked about it on the podcast before. We haven't talked about it for a while. So tell our listeners who might not know what it is. How'd you do it?
CHRISTA DOWNEY
6:07
Yeah. So it's an opportunity. A self directed IRA is an opportunity to take your retirement funds from your ira, either traditional or Roth, and invest them in any number of alternative investments. So for me, I'm focusing on startups. It could be focusing on other alternative assets, real estate, precious metals, art, whatever is of interest to you. And I wanted to invest more money in startups than I had in my checking account each month. And so I remembered back to this Roth ira, which I remember back in the day setting up a Roth IRA and not really knowing why. I had been that person that straight out of grad school, got a job, started putting money into my retirement.
CHRISTA DOWNEY
6:53
There was the 403B. I worked for nonprofits. So 403B and put in a little extra. I'm now putting. But then one year someone said, oh, you need a Roth ira. And I don't really know why, but okay, following along, it sounds like a good move. And then realized a few years ago I could take those funds and invest them through a self directed IRA into any number of investments, including these startups that I was really excited about. And then the beautiful thing about that, which I am believing is going to pay off, is that this is pre tax dollars.
CHRISTA DOWNEY
7:31
And so forever that money has already been taxed and whatever comes back into that Roth ira, I can continue to reinvest and grow and hopefully build some generational wealth right after tax dollars. Yeah, sorry.
MARCIA DAWOOD
7:46
Yes, yes, I knew what you meant. So, yes, that's so interesting. And actually in my book Do Good While Doing well, I talked about how Peter Thiel from his days at PayPal was able to gain a tremendous amount of wealth because he took some of the very early shares of PayPal when they weren't worth nearly as much as they were when they exited, and put them into a Roth ira. And that's the whole beauty of it. You've already paid the taxes on the money that's going in there or the asset, and then you can grow it. And if it grows really big, you don't pay taxes on that. Yes, we have several episodes on tax and how you can really utilize because at the end of the day, the government really does want people to invest in innovation and so that's why there are tax breaks. Not like we're trying to get around the taxes.
MARCIA DAWOOD
8:38
What we're trying to do is make sure that we can get the innovations into our country that we really want. Right? Yes, yes. And of course, you don't have to use all of your retirement dollars. You can just be part of it. And I love that you talk about it seems like you've done quite a good job with diversification, which we talk a lot about here on the show. So tell us your strategy there.
CHRISTA DOWNEY
9:01
Yes. So I do believe in diversification of investments. I'm using just a small portion of my retirement funds and a small portion of my regular income to invest in startups. I'm doing that by investing very, what I consider small, good for me, amounts in individual companies. And then I've invested in three. I'm an lp limited partner in three venture funds. And so then these funds each are investing in a couple dozen startups each. And so through that, I'm getting some diversification.
CHRISTA DOWNEY
9:36
I did get pretty excited. I tend to jump into things, so I don't have a lot of diversification yet. In terms of years, I put. I was really jumping in in 23 and 24, well, 25, whatever those years were, I really jumped in. But I look forward to building again and slowly diversifying. In terms of vintage years, let's call it over in my future, I don't see this ending. I see this as a way to both build wealth for me and, like I said, put resources into things that I believe in.
MARCIA DAWOOD
10:09
Yes, yes, that's. We talk a lot about that on the show, for sure. And I love how you're talking about making some individual investments, but also investing through funds. We talk about funds a lot here. And it sounds like in a relatively short period of time, a few years here, you've been able to get exposure to a lot of different companies, which is what I'm always a huge fan of, because we want to be able to make sure that people have access to more than one or two companies. That's very scary when I hear somebody say, oh, yeah, I invested in my friend's startup. And I'm like, but that's. It doesn't work out, then what? Then you're going to hate angel investing for the rest of your life.
MARCIA DAWOOD
10:52
But that was just one thing. You can't necessarily always think that. Right. So let's talk a little bit about money mindset. I know that's something that I, of course, finding super fascinating. Recently, of course, the launch of Unapologetic wealth. So tell me your thoughts there.
CHRISTA DOWNEY
11:09
Yes. It's so important. I try to have these conversations at home, too. I have a teenage daughter, and we talk about the reframe. Okay. Is it that we don't have the money for that, or is it that we are choosing to make other choices? How are we spending our money? How are we spending our time? These are intentional things. And let's talk about it in that way. And let's talk about it in that positive, joyful, optimistic, you know, way.
CHRISTA DOWNEY
11:38
Instead of getting down on ourselves about choices that maybe feel we have to make, how about the opportunity if we get to make these choices? Right. So that reframe is something that I am still working on as an adult, reframing some of the things that I grew up with. And I'm a learning as I'm figuring out what works for me and what doesn't work for me, and also doing my best as a parent to help my daughter with that reframe. Because messages about money and many other things in life are coming at us from so many different angles that we need to catch ourselves and to take a minute and say, is this my way of thinking about it, or is this what someone else has told me? Or planted a seed that I didn't even realize?
MARCIA DAWOOD
12:24
Totally. And we talked a little bit before we were on the show about founders and their mindset around money to talk a little bit about that.
CHRISTA DOWNEY
12:34
Yes, we talk. It's a lot of. It's a lot to sign up and say, I'm going to start a company, right? And just this is what I'm going to dedicate the next several years of my life to. And there are so many ducks you have to have in a row, right? To do that. So many things that need to be organized. And. And one of those things, I think, is that money mindset. It's about, okay, I'm building this.
CHRISTA DOWNEY
13:00
What does that take? What does that mean for me financially? What does that mean for my family? What does that mean for my team? And what does that mean for my investors? So when I'm going and I'm talking to potential investors, it's not just about, I need money to build this thing that I'm excited about, and can you help me or support me? It's not philanthropy, as many of us have talked about. It's, I'm building something amazing. And I want you to know about this in case you want to join me, in case there might be a reason that it would make sense for us to Work together so you can have a seat at the table and we can build something amazing together. So it's asking someone if they want to be a part of it, and you get to decide, do you want that person to be a part of it. You don't have to say yes to everybody. And it takes a lot of intention and confidence around what you're building and why and your money mindset in order to have those conversations and make good decisions around that.
MARCIA DAWOOD
14:02
Yeah. Too often I see entrepreneurs that are. They just think, oh, I just need money. If I could just get money, it's going to solve all my problems. And I'm like, no, that doesn't really happen like that. Like, money can actually cause more problems. So knowing where and how you're going to build your business, the focus that you're going to put on the business, meaning if you do have a product and you think it could be used in multiple industries, let's pick one to start, not eight. Okay.
MARCIA DAWOOD
14:36
And then how are you actually going to build and scale? So I was talking to somebody the other day and I'm like, okay, scalability is really the number one thing that investors care about. That's why they're going to invest in your company. That they see something that has a. Is a big problem, very sticky, you have a great solution that is scalable. Yes, yes. So all of that said with money mindset is, I think, so important and like, also thinking the whole idea of like, enough, when is enough. Some people are like, no, I have to raise 2 million, 3 million, $5 million. But is that what you need, what you really need? Do you need all that now? Do you need more than that, less than that? What is enough? Talk to me a little bit about that.
CHRISTA DOWNEY
15:25
Yes. You're setting goals, you're setting measurable milestones and determining what does it take to get there? What are the pieces and that's where. Depending on the type of business that you have, you might need to really do a lot of research to figure that out, if there's manufacturing involved or something like that. And so finding experts, building a strong advisory team who can support you is going to be crucial. And figuring out, how can I operate lean, what is most important here? What's the balance between making enough money now for myself and my team versus bigger picture longer term? There's a lot that, again, that confidence with decision making and decision making around money is going to keep coming up. And so feeling comfortable with having those conversations and doing that type of reflection and alignment is important work and Something that takes time.
MARCIA DAWOOD
16:25
Yeah. I also see it with founders or co founders, two, three, who's actually doing what work and then how are each. How is each person being compensated and is it fair? And if you don't have those really hard conversations early on, it can be really bad down the road, right?
CHRISTA DOWNEY
16:47
Yes. Yeah, absolutely. So that founder agreement, figuring out everything from equity to decision making to what's our plan for exit and what happens if this, that and the other thing, and in our personal lives as well as in our business life, how does that all come together? These are all conversations about money.
MARCIA DAWOOD
17:10
Yep. So tell us a little bit about your coaching business and how you help people. Yeah.
CHRISTA DOWNEY
17:17
So very similar in terms of that mindset and that the identity shift around money is the identity shift around being a founder to then becoming a CEO. And so you were talking about how money doesn't solve all problems. In some ways, money just changes the dynamic. I don't want to say brings up new problems, but certainly when you have investors, you now have people who are expecting a return, quite nice return, and you need to deliver on that. And so it's not about, can you build this exciting thing? It's about can you build a team who then you can empower to lead in each of their respective areas to build this exciting thing. What is your role as now a CEO and how is that different from being a founder? And how do you approach each day and each week and think about your priorities and your communication style? And there's a lot that goes into that. And the interesting thing that I've noticed from getting involved in this community over the years is a lot of people come at this from a strong technical background. They are an engineer or a physician or have something that they've been doing very well for a very long time, and never in that time have they had to manage a team.
CHRISTA DOWNEY
18:44
And certainly not the complexities of managing a team and managing the financials of IT and the growth and scaling a company. And that's where my work comes in, is helping founders to see all that entails and to know that there are resources there. The same way you learned about what a cap table was and a pro forma and all of these things the same way you learned about fundraising, because most people don't come at it from that background. You can learn about leadership, organizational alignment, strategic clarity. Right. So these are things that brilliant people. If you have what it takes to start a company, you have what it takes to become a CEO. And it doesn't just happen naturally.
CHRISTA DOWNEY
19:29
So I'M here to build out some tools and resources to support founders on that journey.
MARCIA DAWOOD
19:35
I love that. So what are some of the things that you see these very brilliant people getting wrong? Like you keep seeing the same patterns.
CHRISTA DOWNEY
19:45
Yeah, yeah. The biggest one is around delegating, feeling like, this is my baby, I built this my idea, and now I don't know how to effectively distribute the work and trust that other people share my vision. I don't know how to communicate that vision, trust people with that, figure out where I can best contribute with my strength in the current environment and still have enough, you know, of my eyes and ears on the work to know that things are going well and we're going down a path and thinking about accountability and communication and how all of that comes together. Yeah. Prioritization, delegation, accountability, communication, it's all tied together and it just oftentimes gets overwhelming and that's when people start to see burnt, feel burnout and then the whole team starts to feel burnout and confusion and it. There's a ripple effect out to the investors and if you've got a board, sometimes it goes that far as well. And yeah, I would say that's the biggest one.
MARCIA DAWOOD
20:55
Yeah, delegation is a big one. And that's something that I don't think founders really anticipate because like you said, they think, well, oh, wait, this is my thing. I have to keep control of this part and I have to keep control of this part. And they don't realize that if they could start to get let a little bit of that go, it'll actually make the whole thing go better and. Yes, right. Yes, yes, yes. Well, this has been great, Krista, where can people find you?
CHRISTA DOWNEY
21:26
Yes, I'll share my LinkedIn and my website and people can follow along and I look forward to connecting with anybody who wants to learn more.
MARCIA DAWOOD
21:35
Yes, we'll make sure that all that is in the show notes and we will also link to Shalini's episode on Ready Set Jet. Yes. Since you were the one who referred her and she has such an interesting company, speaking of brilliant people who are growing amazing things. So we will be sure to link to that as well. So thanks so much for being here, Krista. Thank you.
CHRISTA DOWNEY
21:57
I enjoyed this.