Social Impact Investors: How Lisa Graham of Notley Is Helping To Empower Nonprofits Making Positive Changes In Their Communities
Numbers: This is a big one. And simply put, they have to make sense to us. Stories are nice and it’s easy to quickly get really excited, but at the end of the day, numbers don’t lie and if they aren’t making sense then we won’t invest.
As a part of our series about “Social Impact Investors”, I had the pleasure of interviewing Lisa Graham.
Lisa Graham is co-founder & CEO of Notley, a catalyst for startups and nonprofits making positive changes in their communities. Under Graham’s leadership, Notley has revolutionized impact investing, giving away more than $1 million to nonprofits, creating affordable spaces for social impact organizations, and supporting diversity in entrepreneurship through Notley’s leadership workshops. An Austin native, Graham serves on the board for Friends of the Children and Austin Kite Festival. Graham earned her undergraduate degrees from The University of Texas at Austin as well as her Master’s from UT’s LBJ School of Public Affairs.
Thank you so much for doing this with us! 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?
My background is in public policy and public affairs. Before Notley, I was working in public school finance and wanted to do work with the government, writing policy. At the same time, my husband, Dan, had been growing his business, BuildASign. As the company grew, so did his desire to give back to his community, and he launched several programs to accomplish it. I wanted to make an impact without being bogged down by the bureaucracy of the public sector. There are a lot of hoops to jump through to get things done and it can take a very long time.
Eventually, we wondered about how we could combine all of our passions into something we could do together. Then in 2015, we started Notley, an organization that invests in great businesses and use those profits to make a meaningful impact in the nonprofit sector. Getting this exposure to the nonprofit sector and the for-profit sector and potentially merging the two was exciting for us.
In 2018, after we sold BuildASign, we found ourselves in a financial situation neither of us had experienced before. It was a little daunting and intimidating, but we quickly decided that we wanted to keep working. We wanted to create something that we would be passionate about for a long time, and we knew we wanted to be philanthropic, but wanted to make an impact beyond grant writing. Since then, through Notley, we’ve been able to make countless investments into organizations that are driving positive change in their communities.
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?
When we first started our work with Notley, I thought this was something I would be doing part-time. I quickly realized that when you are passionate about something, it becomes so integrated into your life that you can’t just turn it off. Flash forward to today and I’m in the office five days a week, have a CEO title, and wake up excited every day to get to work with the awesome people on our team.
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?
At Notley, the biggest tipping point happened when we decided to merge the investment side of the business with the philanthropic side of the business. That was the starting point for us getting to where we are today.
We wouldn’t have known that from the beginning, though, and that has been the biggest takeaway about doing this work. If you have an idea, you have to just start doing it. You can’t plan it out from the beginning and expect to stick to the plan 100%, because odds are it’s not going to go exactly the way you thought it would. It takes years to build something and there will always be something to learn that you didn’t see at the beginning. I learned that it’s most beneficial to have the flexibility to make iterations to a plan as you maintain your end goal in mind.
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?
It may sound cheesy, but I’m really glad I get to do this with my husband. I think there are many people who would love the opportunity to work with him and start a business with him. I’ve been very lucky to get to do that. I have one of the best mentors in town and I love that I can throw ideas in front of him and talk about them, or solve problems that we are both passionate about. It’s been amazing that we’ve not only built a business, but we’ve built a whole life and family unit together too. Getting to live through all those shared experiences has been such a driver of our joint success. I think Notley is really where it is today because we’ve done it together.
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 wouldn’t have had this perspective when I started Notley in my early 30s, but what I’ve learned through the years is that you’re going to fail — we all are, and we’re going to do it all the time in various ways. It’s all about your perspective when you do fail, though. If you view a failure as a pivot or adjustment to something that wasn’t working, then it doesn’t have to hold you back as a failure. We’re all going to make mistakes and we all have to expect change. It can be scary, but you have the power to turn a mistake into a different story if you just look at it a bit differently.
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?
It’s not a simple solution. Minorities, people of color and women are vastly underrepresented in the VC world. If we want to make changes to expand opportunities to underrepresented groups, people who are starting and running investment vehicles are going to have to go out of their network to hire and find businesses to invest in. So often our networks look just like us and have the same type of background. To build something that will expand opportunities, there will have to be a conscious effort to go beyond the comfort zone of what you know. This is true for any impact we want to make — we have to listen to others, and especially those who are different from us.
If we want women, minorities and people of color to have more VC opportunities, we need to put people who look like them in decision-making roles. The best way to do this is to build a diverse team from the beginning and put people from underrepresented groups in roles of leadership. At Notley, we have women at the helm of our investment and diligence processes, they are also in ownership and leadership roles in two investment firms where we are GPs.
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?
People assume that at Notley we do a lot of what is traditionally called impact investing. We do some of that, but we also do traditional investing. With impact investing, the idea is that you invest in a company because you want to make an impact knowing that you may get lower returns. At Notley, we take the returns from the more traditional companies we invest in and use that to make an impact investment in the for-profit and nonprofit spaces.
What is really cool is when you find companies with the ability to create high returns for investors while inherently improving humanity. Right now we are excited about what is happening in the bioscience technology space. These companies are creating technologies to cure diseases and solve healthcare challenges that will have a vast impact on humanity. We also invest in real estate in Austin, which is one of the fastest-growing communities in the United States. There’s an affordability and housing crisis here, and through some real estate investments, we have the opportunity to build things like multifamily housing so more people have access to and opportunity in the city.
These aren’t social impact investments based on the traditional definition, but we get to do the impact work afterward and know that the initial investment is also helping to solve a very real problem. Because we have an incredibly varied portfolio, we have a high rate of return and can stretch our influence further. For every dollar that we bring in, we consider three opportunities: we can reinvest it, donate it or hire someone to help us drive more impact and investments.
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?
Leading up to the creation of Notley, we had a lot of conversations about how we wanted to live, how we wanted to raise our family and what we wanted to do for the rest of our lives. The conclusion we came to was that we knew we wanted to work, we knew we wanted to make an impact and we wanted to make it entertaining and fun for us to do. We didn’t want to build wealth to pass on for generations, we just really liked being around people who want to make our world a better place to live in. The best way for us to bring all of this together was to build a business model that would allow us to work every day to invest in people who are determined to make a positive impact.
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?
I’m particularly proud of an investment we’ve made in a company called Civitech. Civitech offers technology solutions that build a fairer and more equitable democracy by ensuring that Americans are able to exercise their vote and elect people that represent the diversity of our country. I’m passionate about what they do because there are states with very restrictive voting laws and lots of hoops people have to jump through. For a lot of populations, this can be so burdensome that they would never register otherwise. It’s an incredible equity move on their part and so important to make sure everyone has access and knowledge about their voting rights and the elections they are eligible to vote in.
The founder is also an incredibly brilliant, fascinating and good person who teaches me something new every time we have a conversation. That’s gone to prove to me that investing in good people is never a bad idea. It’s a philosophy we follow now with every investment because life is too short to work with people or invest in people that you don’t actually want to work with. That’s been a huge lesson for me.
Can you share a story of an Angel or VC funding failure of yours? What was its lesson?
We’ve definitely made investments where we’ve seen no returns, and there have been companies we’ve invested in that started to pivot to a point where we didn’t understand the business model anymore. We’ve been pretty good at spotting those moments and tend to get out if we can. The biggest lesson that we’ve learned over time is that if we don’t understand the business, we shouldn’t invest. If a founder can’t explain it to us in a way that leaves us with full knowledge of how their business works and financials that make sense, we won’t invest in it.
Is there a company that you turned down, but now regret? Can you share the story? What lesson did you learn from that story?
Honestly, no. And here is why: you are always going to miss out on a deal. Whether it’s a company that took off and we didn’t invest in it or we chose to invest in a similar company that didn’t take off, there will always be something to look back on and feel we missed.
Investing in startups and early-stage companies is so risky that it’s easy to create a story based on what you missed out on or what was a success — and it’s incredibly unproductive to make decisions for the future that way. We honestly don’t have many conversations where we look back and wish we had invested in a company that became successful. Instead, it becomes more of a conversation around whether we see ourselves investing at the current stage. Just because we may have “missed” it the first time doesn’t mean we can’t still invest in it later.
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.
- Numbers: This is a big one. And simply put, they have to make sense to us. Stories are nice and it’s easy to quickly get really excited, but at the end of the day, numbers don’t lie and if they aren’t making sense then we won’t invest.
- The founder: I always ask myself: Is this someone I would want to work with and want to be on this journey with? It’s important to me to make sure that the founder is someone who’s making good decisions and that it’s going to be enjoyable and fun to work together.
- Grit and hard work: We love organizations that are willing to run at problems and solve them along the way. The determination of the team to make an impact is huge for us.
- Understanding the space: If we hear a pitch and we don’t understand the business model well, that’s a red flag, because customers and stakeholders might not understand it either. We like to make sure we know the ins and out of what we’re investing in.
- Traction: This, of course, depends on the stage of the company or organization and even how well you know the person you’re working with. However, seeing movement and success in the ideas and models an organization brings us heavily impacts our decision-making process.
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. 🙂
I want people to talk to each other, and I would love to make that happen by continuing to expand Notley. Creating an impact starts with listening to other people and having conversations. And really great ideas can be spread across communities — whether they’re related to business, philanthropy, or quite frankly, life.
If we think we always have the best ideas and the best solutions for a problem, we begin to silo ourselves. The more we open our minds to learning from each other, the better off we’re going to be when solving problems within a neighborhood, community, or city.
That’s what my movement would be and that’s what I work for every day at Notley. I want to expand the flow of ideas and conversations further out than our backyards. If we broaden our reach, we broaden our impact and we can find solutions to problems we never even knew existed.
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?
I don’t think making a positive impact in society has to come from a place of privilege, but often, doing it on a larger scale does. If you are in a position to be able to even consider making an impact and have a level of privilege you can take advantage of — I say do it.
At Notley, we define changemakers as innovative, purpose-driven leaders addressing issues impacting their communities. They are not limited to nonprofit founders and philanthropists — changemakers can come from any industry and any sector.
This means that we all have the ability to improve the world around us. The way we do that looks different depending on the person because we have different gifts. The hardest part is just taking action, but when you do, be proud that you were brave enough to do it because most people aren’t.
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. 🙂
There are many incredible people I’d love to sit down with — too many. But these days I’d love to be able to make time for myself. I learn a lot from other people all the time, but the luxury to actually sit back, reflect and then act on those learnings sounds amazing!
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Thank you so much for this. This was very inspirational, and we wish you only continued success!
Social Impact Investors: How Lisa Graham of Notley Is Helping To Empower Nonprofits Making Positive… was originally published in Authority Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.