Meet the Angels

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Thursday, October 02, 2008 | By: MIT Venture Lab Seattle

Investing in energy and new alternative energy is becoming quite popular in the angel and VC groups right now. This makes sense with all the issues that we have with Oil, and what could happen with the next president. Getting angel and VC funds into that right now looks like this could lead to a bigger payday for these funds. Risky though because no one knows who will be the president. But worth the risk, especially on the longer term view that angels tend to take.

Puget Sound Venture Club was founded in 1985, and they do seed/early stage companies. They want to have the product done because of the original bubble, so if you want money from PSVC, then you will have a real product that is ready to go. They do try to do low/no tech deals as well. They interview the company, screen all the companies downtown seattle or bellevue and start judging business plans and products. They have seen 1300 executive summaries since they have been in business, 830 companies have presented to the group.

They have invested in starbucks and in symbologic, with far too many failures along the way. Membership requirements are heavy as well, 1 million dollars net worth, history of investing, with a maximum membership of just 50, with only 31 seats taken. They are always looking for interesting companies to invest in. But this does feel more like an older school network, with a longer history than most of other groups here tonight.

Seraph Capital Forum, They are another angel fund that provides money, expertise, and help building relationships between groups, companies, and exchanging of knowledge. They have been in business since 1998, they are also a group of all women investors. This is part of the growing network of woman owned and operated seed/angel funding groups. They will invest in any company that meets their quality criteria. Their idea was to help women become active investors in companies, and how to invest in smaller entrepreneurial companies. They have 40 members, there is no paid staff, all members are volunteers, with an investment range of 10K to 100K per member with a typical investment range of 25K to 50K. They also use angel soft for people to enter all their data into. Angel soft seems to be the software package that people all over the region are using, meaning people who want money, should learn that software package.

They do a luncheon format for the pitching, with each entrepreneur making a 10 minute pitch, but depending on what table they sit at, they might get a lot more questions after the pitch. They will invest across many different industries, so this is a fairly open network depending on what your service/product is.

Tacoma Angel Network - They have 43 investor members, and invest 50K per year per member for early stage deals. They invested 3.4 million with an average investment of 150K and 35% of people who pitched got funded. The companies must be investor ready, meaning there has to be a good amount of attention to detail for companies who want to do this. They are in process of moving to angel soft, but use different software. The company wanting money needs to fill out the on line profile to find out exactly what the deal will look like along with the business plan. The investor materials should point out that there is a 15 minute presentation for this group. Customize your pitch for this group, this also shows that you are paying attention to them. They also like Proforma P&L, and other cash revenue sheets and how the model was developed. They want to see five years in this, so that they can figure out how they will make the money from the angel fund stretch out. Only 15 companies usually make it through the process to get funding. 6 are selected get to present, and those that are not selected get a detailed response back with great information back to the company. 3 of the 6 companies get forwarded to the selection committee, and those last 3 are the ones that actually get to pitch to the fund. Companies pay to pitch as well to the group, and then the winners are given money.

Zino Society - They have been around for about 3 years and to connect accredited investors with entrepreneurs that are seeking startup capital. They have seen 130 companies across all business sectors. 80% are consumer product/service with the other 20% being bio/tech. They are doing an investor education series to help people learn how to invest in companies. Members can also participate in an angel opportunity fund as well. They have 98 accredited investor members, and they have a lot of experience in this field. They have a blend of sophisticated and new angel investors. There is a 150 dollar application fee and they use angel soft. The entrepreneurs get access to investing and business education and networking opportunities by starting the process. They have invested 8.9 million dollars over the last three years. 130 companies have pitched, and generally 1 in 5 or 6 gets an investment.