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April 01, 2008

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Comments

John Wall

I'm always watching VCs and their groups, I didn't realize that Angels were that organized!

Omer

"Software accounted for the largest share of Angel investments, with 27%, followed by Healthcare Services/Medical Devices and Equipment (19%) and Biotech (12%)."

Seeing this mix change already, with biotech ascending more rapidly and Software declining. Reason being setup costs for tech startups are declining rapidly, read - Joyent, Amazon web services, Open source software....

Paul Kedrosky

The trouble is, as Don knows, that angels are moving up-market into being VCs, leaving fewer useful people behind doing true angel investing.

Case in point: I met with a startup today that finally gave up and created a 4-inch d/diligence folder for dealing with angels. That is absolutely absurd, a statement about the essential stupidity of most angel investors.

Don Dodge

Angels are definitely filling the void left by VCs who used to do most of the seed stage or first round funding. VCs have moved up to doing much bigger deals, a minimum of $5M..and larger. There are still some great early stage VCs in Boston and Silicon Valley, but not as many as before.

Angels are great for smaller deals, especially where they already know you or your business area well. If they don't know you or your business it will be just as hard, perhaps harder, than VCs to get them to invest.

Angels have the same investment thesis as VCs and do all the same due diligence and filtering. Angels are not benevolent distributors of cash...they are investors.

I think Angels are a great source of capital and personal help for startups. But the deal has to be right for all involved.

Daniel Weinreb

Indeed, at Common Angels we restrict ourselves to business areas that we feel that we (our members) know well. Also, we generally restrict ourselves to companies in our geographical area, so that we can keep in close touch and provide as much help as possible to the them. Yes, we do due diligence and filtering. I'm told that we are more stringent than Silicon Valley investors (I don't know from my own experience). We also sometimes syndicate with VC firms when the company needs more cash than we can provide ourselves. And we spend a lot of time helping with and participating in future rounds.

You are totally right that the deal has to be right for all involved. We have declined to fund several companies that I expect will find funding and have a great chance of success, that just did not turn out to be the right fit for us.

Jules Carney

“Wow,” it is in truth good to say a post from someone that knows a subject well and is able to get their point across. I am really looking forward to your following post.

I had to take a moment and thank you for the post you wrote.

Angels Den

ahhh 2007, but how the Angel Investment world changed in 2008! Any news when the next report will be out?

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