At some level, don't we all envy the French? When you listen to Philippe you'll wish you were a French entrepreneur!
Representing 3,500 business angels in 80 angel groups, France Angels has grown at a rate close to 50% per year!
What kind of economic force can you bring to bear with a group that large? According to President Philippe Gluntz, "we invested last year in 300 deals which means we invested 60M eruos last year". Wow! But like investors everywhere, Philippe knows that's not enough.
I spent time with the founder of the San Diego Band of Angels yesterday. Vern Yates will be appearing here soon, but until then enjoy this teaser clip. The fledgling angel group would soon join forces with the Tech Coast Angels who were expanding from their Orange County and Los Angeles footholds. Today TCA has 5 networks from Santa Barbara to San Diego.
He created a simulator, like Flight Simulator, but for scuba divers. It started out as a hobby, now he's generating revenue. He thought it would grow into a video game, and it still may. What's changed? He began with one vision then the customers got involved and reshaped his business plan. It's a classic tale and one that investors everywhere look for: When does that great idea morph into something people will pay for?
Turns out the simulator is the ideal way to demonstrate and train users on the features of their dive computers. These snazzy watches cost up to $1500 and who in a retail store can learn all the features of all the dive computers they offer? Enter DiveNav. Alberto's created animated commercials to sell these gadgets then offers training programs that the user can take at their leisure. The training classes introduce the trainee to the simulator, so why not take a virtual dive or two? It's a great way to plan your next dive or your next vacation!
Since his last company exited at over $100M, Alberto's a serial entrepreneur and an angel investor. Can he do it again?
You're invited! Come to the DiveNav Holiday Party 11:30am Wed Dec 16th at 4311 Jamboree Road (at Fairchild) in Newport Beach. Alberto's bringing the food and me the champagne. RSVP to frank@theFrankPetersShow.com
Show #265 (36:06) Listen Disclaimer: I own stock in DiveNav.
He has a little more spring in his step today after charges were dismissed in his options backdating trial. The Los Angeles Times called it "a dramatic twist" when US District Judge Cormac J. Carney decided his transgressions were not a crime.
Henry Samueli is the billionaire co-founder of Broadcom and he's used his wealth, in part, to contribute to many local charities in Orange County. The Schools of Engineering at both UC Irvine and UCLA bear his name. Listen to how he created his empire.
Thoughts after the Puerto Rico Venture Forum #PRVF
It's fun to observe the start of an angel group. The challenges almost overwhelm; are there enough Investors, enough good deals, acquirers and are there basic cultural issues (e.g. "business is private in Puerto Rico") that will make you question: is my time better spent on other projects?
I can relate. As Tech Coast Angels considered expanding east I helped lay some of the first bricks that would eventually build a network in Riverside/San Bernadino, called the Inland Empire. The first big break was finding a local champion, Riverside is a little more than an hour from my home plus it has serious rush hour traffic issues; getting to a dinner meeting meant leaving Orange County at 2pm! So the champion came in the form of Los Angeles member Mike Napoli, not an IE resident, but he had a 2nd home in Palm Springs, so he was driving through the IE frequently. Plus he had the perspective, besides TCA, he'd recently joined the new Coachella Valley (Palm Springs) Angel Network, so he could see just what had to be done to get the IE angel network going. Fast forward a few years and, in retrospect, it all looks easy.
I hope my new friends in San Juan take heart.
Fellow panelist Mic Williams, founder of the Boston Harbor Angels, and I kept echoing this mantra: it only takes one! Find the one person you need to get an angel group started in Puerto Rico. Build some support around your champion. In Southern California local university students are eager to intern for TCA. Interns might grow with you and eventually become an executive director. Angelsoft will take care of most of your deal flow, applications, due diligence coordination and membership roster. Get a few corporate sponsors, my favorites are law firms with a long-term perspective. Set the membership dues (many angel groups charge $2,000/yr or more) and hang out a shingle! Set a quarterly meeting schedule for the first year; the time between will give you the time you'll need to groom and polish the most promising deals. Quality is more important than quantity. Showcase your best deals, your members will spread the word that the meetings are worth attending and entrepreneurs will value the time you've invested in preparing them even if they don't get funded. They'll walk away feeling positive and your reputation in the entrepreneur community will be off to a good start.
Continue your own education. We met at the ACA Annual Summit in 2008; save these dates now: EBAN in Istanbul, April 15-16 and the ACA in San Francisco, May 5-6-7. You'll learn more about best practices and continue the process of building trust with stateside angel groups who you may syndicate with someday.
Fast forward a few years and it will all seem easy.
"Tit -for-tat's a principle any lead investor needs to understand," according to James Geshwiler.
He's the co-Managing Director of the Common Angels in Boston and here he shares stories about leading deals, managing early-stage financial risk and how game theory affects angel group co-investing across New England.
Tech Coast Angels Chairman elect Richard Sudek has handed out 20 copies of Spencer Johnson's Who Moved My Cheese to grease the wheels of resistance to change prior to our 2nd annual offsite strategic planning day set for tomorrow at Chapman University. It's a great start for his reign and might be just the nudge we need to rethink some of our processes. As a 12 year old angel group, it's easy to get set in our ways. Maybe angel groups are especially prone to resistance to change because their members aren't exactly spring chickens. We all become more comfortable with the routine as we age and the nature of angel investing is making many of us older fast. Once venture capital makes an investment in a portfolio company our timelines to an exit are growing well beyond the 3-5 years we all imagined when we started angel investing; today we're more likely to see 7-8-9 years (and counting) to exit, so we're only becoming more prone to being set in our ways. I often say that the original founders of TCA, many of whom are still involved, weren't so young 12 years ago.
But speaking of books that might prompt change, Basil Peters' Early Exits gets my vote for Book of the Year. The premise is refreshingly simple: as soon as you fund a company get started on crafting the exit. Too often it seems we let the company muddle along on its own and as the cash reserves get thin the founders make the venture capital pitch. But venture capital has to put a lot of money to work, the average venture fund being $250M, and they need big exits to make the fund successful and billion dollar exits don't happen overnight. Contrast this with Basil's concept of funding a startup entirely with angel fundings, maybe 2 or 3 small rounds, then finding an exit partner to acquire the company for somewhere in the $20-30M range. Angels get a nice return, entrepreneurs often see a 100X return and we get out of the deal in much less time.
Our angel peers in the life sciences need venture capital relationships to fund their ambitious startups, but that's their model and it works for them. Too many times we've been tempted by the siren song of venture capital, as my recent guest, Momentum's Andy Wilson, has admitted, and end up with less well-suited deals involved in endless timelines as venture capital seeks their ultimate objectives. Meanwhile we're getting older.
"From a high of 35 investor members, we're now down to about ten active participants," Chapter President Steve Murchie was quoted. "A group that size isn't financially sustainable using our membership model, nor is it likely to drive investment volume at a pace that is fair to entrepreneurs."
Turns out the simulator is the ideal way to demonstrate and train users on the features of their dive computers. These snazzy watches cost up to $1500 and who in a retail store can learn all the features of all the dive computers they offer? Enter DiveNav. Alberto's created animated commercials to sell these gadgets then offers training programs that the user can take at their leisure. The training classes introduce the trainee to the simulator, so why not take a virtual dive or two? It's a great way to plan your next dive or your next vacation! 
