Committed Capital: Springboard's Al Rossiter
At a recent Tech Coast Angels meeting I took on the task of polling other angel groups that operate with a fund. Dave Berkus said, "call Marianne Hudson at the Angel Capital Association and find out who has a fund". Good idea. Marianne recommended Springboard Capital in Jacksonville and the Alliance of Angels in Seattle. Well now you know who next week's guest will be.
"Entrepreneurs have a difficult time discerning actual angel investors from tire-kickers." In today's show Springboard's Al Rossiter describes his angel fund. He sees 400 funding applications each year and culls through every one to find the paradigm breakers. There's no Bozo filter, he wants to see everything, unfiltered.
The advantage of his fund? He has the assets in the bank and he's able to fund deals even during difficult economic times.
He's thinking of raising Springboard III, but it's a challenging time for fund raising.
Show #219 (39:54) Listen
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Comments
You just keep bringing it with these podcasts... wow! Frank, I'm impressed!
Posted by: Norris Krueger | March 3, 2009 10:13 AM
You didn't pin down their selection criteria. He mentioned that they use referrals because they have gone through a certain amount of vetting before they get to him, but did not indicate what the vetting is.
It sounds nice that so far they are not in the hole, but is that due to operating as a fund or the vetting? Do they do lower risk lower reward deals?
For example they have a car repossession business, which must be doing well given the current state of the economy, but surely doesn't have global scale potential. Is this the sort of success you are after when considering creating a fund?
If you are leaning toward a fund, you must already have someone in mind that would properly influence the vetting process. How about a show on that person or people and what their track record(s) is/are?
Posted by: Matthew Artero | March 3, 2009 08:12 PM
Frank: I listened to your interview with Al Rossiter and I thought you did a great job in bringing up the important issues in a fund model and I thought his comments were very interesting.
I was surprised that they don't make everyone register on their web site and at the few exits they have had although it sounds like they have a couple of hot ones that should pop over the next 24 months. I think there is a lot to be said about having the capital available to fund great deals when they have been fully vetted and I'm sure the existence of those funds makes Springboard more attractive to the entrepreneurs looking for funding.
PS Also enjoyed hearing you and Eric Greenspan
Posted by: Jim Connors | March 4, 2009 03:07 PM
This is a response to the comment posted by Jim Connors. In referring to the fund model Jim stated "there is a lot to be said about having the capital available to fund great deals".
It has been previously stated on The Frank Peters Show that Angels need to make 25 investments at $25k each. Therefore, depending on how much a fund has raised and how many investments the fund is required to make to reduce risk, the amount of capital that is available for the "great deal" Jim mentioned still may not be enough.
Maintaining capital reserves equates to less diversification, which equates to more risk per dollar. According to the article in Forbes, there's no shortage of funds that haven't paid off.
It's not enough to say "when [the deals] have been fully vetted". The optimum vetting process remains to be identified.
Posted by: Matthew Artero | March 4, 2009 05:24 PM