After a career in NYC Steve joined Tech Coast Angels; he quickly started leading deals. Maybe it's his background as an attorney; whatever it is, he's tenacious when it comes to getting his deals closed.
If you're an entrepreneur trying to get funded in Southern California, you couldn't do better than to have Steve working your deal.
Jeanine Jacobson runs The Founder Institute in San Diego. She recently invited me to attend the graduation ceremony; that's where I met Julian Bryant who invited me to mentor the recent Startup Weekend, San Diego.
There's another 4-week program beginning September 21st; apply here.
The Tech Coast Angels rejoice as Green Dot (NYSE: GDOT) goes public. The original investors waited 9 years for this IPO, but it's worth it: as much as 110x returns for those who jumped in originally! Congratulations!
Take a trip back in time, 200 interviews ago, to listen to Steve Streit tell his amazing story.
For all the risk you take as an early-stage investor, wouldn't you love a 2 for 1 match?
JumpStart Inc's CEO Ray Leach and Tech Coast Angel Dave Berkus discuss angel funds and in Ray's case, he enjoys great support from the state of Ohio where they've recognized the importance of angel investors in creating jobs. Dave and I groan with jealousy as Ray describes the $3.5M Ohio has granted to 2 native angel groups.
Dave has his own news: today he announces the new TCA sidecar fund, the Angel Capital Fund. No government matching, but it does have many well thought out features that your angel group will want to implement.
These new funds mean more money for entrepreneurs.
Looking to brush up on international early-stage investing approaches? Tony can cite how it's done in many parts of the world and why more countries are keen to learn the best way to encourage and promote business angels in their countries.
What's the minimum viable feature set for a software product? Startups have limited resources, so how do they balance their ambitions with their finances?
Startups need developers, but in a shaky economy many good developers are staying with their current employers. How will Los Angeles find the talent to power all the technology startups that are itching to get going?
SoCal CTO blogger Tony Karrer still writes code at his TechEmpower development firm in Los Angeles. Once a month he runs the LA CTO Forum in Santa Monica which keeps him in touch with the issues early stage tech companies face, one he calls the founder-developer gap. How does he find good technical talent? He taught CS for 11 years, so he met a lot of good talent along the way.
Silicon Valley Bank's Laurie Lumenti Garty is a great supporter of Angel Capital Association. We're both on a committee that's planning the Annual Summit in San Francisco, May 5-7.
Computer Gaming Reinvents Computer Science: I recently met with Magda El Zarki and Walt Scacchi at the UCI Center for Computer Games and Virtual Worlds. Starting later this year UCI will offer a new major in Computer Gaming. Walt and Magda think that eventually, computer gaming will find its way into many other disciplines.
Are there investment opportunities for early-stage investors with the new smart games that will surely come from their lab? Chances are good since Orange County is rated one of the 10 best place in the world for gaming.
Got great early-stage technology, but don't know how to get it to market? Meet Chris Shipley. You know her from running DEMO for 13 years; today Chris sits on the DEMO advisory board, while her emphasis is assisting companies through Guidewire Group, her global market intelligence and advisory firm.
Designing Exits Into Our Investments, Basil Peters
"I don't think we're going to be seeing a lot of IPOs again any time soon," says Early Exits author, Basil Peters (no relation), "so the old model of building companies, ... is dead". But don't despair, Basil has several exciting new developments to share.
He's busy. He's putting on an Exits workshop for the Band of Angels. He writes a blog where his most popular post is Don't Blow the Biggest Deal of Your Life. He'll be speaking in Seattle this week at the NW Regional Angel Summit hosted by the Alliance of Angels. If that's too short notice for you, make plans now to see him kick-off the Angel Capital Association's Annual Summit in San Francisco, May 5-7.
"I don't have your check and I don't have your paperwork," so went the email. That's because I'm not investing in this pay-to-play round. "You're the only one who isn't," went the terse reply.
It's been that kind of year; hearing from my portfolio companies who haven't hit their stride, but continue to promise a bright future. Maybe I feel defensive, a need to justify why I didn't write a check and instead got converted to Common and diluted, terribly. I'm certainly no smarter than all the others who did write a check, but my conscience has been nagging at me and as therapy, I recalled the words of Kevin Covert in this podcast from the archives, so I thought I'd share it with you again.
Do your genes control your level of entrepreneurship? Your willingness to risk? To go it alone?
Case Western University economist Scott Shane has a new book, Born Entrepreneurs, Born Leaders: How Your Genes Affect Your Work Life which will confirm some of your hunches about entrepreneurs. "Entrepreneurship, job satisfaction, financial risk-taking", Scott says our genes influence all this and more.
I'm ready for Scott because Joshua Baer has me reading The HypoManic: The Link Between a Little Craziness and A lot of Success by John D. Gartner, which describes the Puritans as venture capitalists, but also as a "lunatic fringe whose paranoia was matched only by their grandiosity". Does that description still fit?
Think of the gene pool of this country... it contains remnants of all the settlers who abandoned the old country and came to America to seek their fortune. Maybe that explains entrepreneurship in this country, but Scott argues, no, that's not the case.
"Novelty-seeking", that's the new buzz-word, and Scott describes how it affects entrepreneurs' drive to do what they do.
Then as we wrap up, Scott helps me to apply these theories to my home life...
Come to an angel conference: Seattle: March 11-12, the NW Regional Angel Summit hosted by the Alliance of Angels Tucson: March 22, the SW Regional Angel Summit hosted by the Desert Angels Istanbul: April 15-16, EBAN's 2010 Congress. Join me as I moderate a panel on angel investing and 'animate' the Awards ceremony. Austin: April 21, the Texas Entrepreneur Funding Symposium. Come see Austin's vibrant entrepreneurial community for yourself; I'll keynote. San Francisco: May 5-7, Angel Capital Association's Annual Summit.
He's the co-founder of the Hub Angels in Boston, David Verrill is chair of the Angel Capital Association's Collaboration Committee, too. Hub is organized around a fund, so he had capital to invest and weathered the economic storms of 2009 better than some angel groups. Even so, David advocates that now is a good time to review "the terms we're using when negotiating these investments". So it's no surprise that he's organizing the ACA Syndication Webinar Series that will focus on syndication, due diligence and terms.
Could your startup use $20,000 in seed capital? Mind spending 10 weeks in Austin? If so, Joshua Baer is someone you're gonna want to know better!
Joshua's the Managing Director of Austin's Capital Factory, a seed-stage mentoring program. Startups must apply and out of the hundreds that do, 5 are selected. Each receives $20,000 in cash, $20,000 in stuff and, best of all, the attentions of 20 mentors over the 10 week program.
Since angel fundings are down, wouldn't most investors be suited to returning to the roots of what it means to be an angel? Can you picture a Capital Factory franchise in your neighborhood? What if you could organize those risk-averse investors and get them involved with a structured mentoring program like Joshua's? What could it mean to your local innovation economy?
Entrepreneurs, you better apply quickly...
P.S. During the interview I say I'll check out Joshua's OtherInbox email organizer. I signed up and have been using it happily for 2 weeks!
Mic shares the stories, the process, the syndication strategies and his refreshing attitudes about due diligence as we discuss getting deals done in New England.
What's the difference between a wind-down or work-out and bankruptcy?
Philadelphia-based Rob Bovarnick knows and he shares that and more in today's show.
Fox Business, Forbes, he's an expert on bankruptcies and he's building an audience in traditional media. Will an appearance on the show open his eyes to podcasting? Or, more likely, I'll be learning something from Rob.
On the show today: Hans Severiens Award winner Bill Payne, Tech Coast Super Angel Dave Berkus, the NVCA's John Taylor and Seattle's Dan Rosen, Chairman of the Alliance of Angels - that's a power panel!
John brings the NVCA 3rd Qtr report and the angels chew on the implications. "[A] deliberate industry shift towards a longer term venture capital investment strategy." We all know what that means: longer times for angels to exit. Is there an alternative to 8-9 year terms before exit? That's when things get lively!
Is the future of angel investing about to change?
Today many angel investments are the first round in a series of capital raises that will eventually include venture capital. But venture capital "resets the clock" according to Dave Berkus and can keep angels in the deal for a lot longer term while they seek a billion dollar exit. Bill, Dan and Dave have read Basil Peters' Early Exits and we discuss an alternate future for angel investing.
Stewart Craine, Barefoot Power: Selling Renewable Energy to the Poor
Stewart Craine and his Barefoot Power are out to eliminate kerosene lamps in impoverished areas and replace them with better and cheaper electric LED lamps. At first I thought such an undertaking might be the focus of a non-profit, but Stewart says "solving energy problems for 1.5 billion people, a $10-30B problem, non-profits just haven't scaled that much". Reminds me of Dan Pallotta's Uncharitable, How Restraints on Nonprofits Undermine Their Potential; listen to my interview with Dan, then I mention M. Yunus' Banker To The Poor: Micro-Lending and the Battle Against World Poverty, but that's not what Stewart's doing either, "close, but significantly different". Listen closely to my first guest in mainland China.
He's partnered with micro credit specialists Oikocredit to create the Barefoot Angels Fund.
He shuttled deals between 5 networks at Tech Coast Angels; over 8 years he's seen more than 100 companies get funded.
Today Jeff's with MHS Capital with a different investment strategy. But Jeff's heart is with VentureNet, he's helped run the event for the past 5 years, and since it's less than a week away it's time for you to jump!
Silva, Steig & Weilerstein: UMASS, NCIIA & Venture Well
Let's take a trip back to my alma mater, UMASS Amherst where Paul Silva volunteers as the Chairman of the Entrepreneurship Initiative, an organization teaching students how to become successful entrepreneurs; he's also the Managing Partner of Angel Catalyst. Nearby, Phil Weilerstein is the Executive Director for NCIIA and Joseph Steig runs its Venture Well program.
"Unproven and young" describes the challenges facing university entrepreneurs. My guests detail the programs that help them get that next stage of funding.
It's a challenging time for Seed funds, Jim tells you why. Challenging times? Maybe that makes it a good time for everyone to get together at the NASVF 16th Annual Conference next week in Oklahoma City.
A gem from the archives: Fred Farina on Caltech's approach to licensing technology. I wanted to re-issue this show since I met Siemens TTB chief, Stefan Heuser. And in just a few weeks you'll hear Joeph Steig and Phil Weilerstein of NCIIA descibe their work with colleges and universities.
Thanks to Tech Coast Angel Bill Collins for introducing me to Fred.
For many angel groups that's the case, but is this downturn in funding based on "the ability or the willingness to do it?" asks this week's guest Scott Shane.
It's easy to imagine, angel investors bring their own bias when it comes to making decisions. How do you make your investment decisions? How do you predict an entrepreneur's likelihood of success? And for Super Angels, those individuals making 50-60 investments, how does their process differ? One thought jumps out: due diligence, some Super Angels do less of it.
Rob Wiltbank of Willamette University and Richard Sudek of Chapman University team up on today's show to describe their research into how angels succeed. They're both academics and investors themselves, so I ask Rob, because he knows the statistical ins and outs, how does it influence his investing?
When it comes to decision making, if there are 2 kinds of angels out there, what are the implications for entrepreneurs? "It behooves the entrepreneur to know how the investor sees opportunities." And how might the investors' perspective change during the due diligence process? Join us for a fascinating discussion of the psychology of the investment process.
The rivalry on the coasts will go on, but one thing is certain, the New York Angels are paying less when they're investing in early stage deals right now. "The valuations sound outrageous to anyone raising funds three or four years ago."
David's the founder of the New York Angels, Angelsoft and The Incubator at RTV. Is anyone doing more to promote angel investing and entrepreneurship?
"CAPCO's are the most insidious, complex effort to raid city and state treasuries in the name of venture capital." I didn't know what a CAPCO was until I met with Bill Payne in Las Vegas last month. Over breakfast he described the work George Lipper has done over the years to expose these scams.
George has left NASVF in protest over the organization allowing CAPCOs as members, "it'll be a few years and they'll be running the organization". So he's built a new website to continue his crusade, LipperCurrent.com.
Besides scams we talk about Seed funds. Is it a good time to start a new Seed fund? "Only if you can be very patient."
For early-stage angel-backed deals it's been a measure of success when VCs come along and invest in the next round.
Angel investor Basil Peters suggests we re-think that outcome, "I think that there are things that have changed which angels should think carefully about, in developing the financing strategy for the companies in which they have invested and, even more importantly, to think about before they make their next angel investment".
As VC funds have grown to an average of $300 million, this means the math for each deal "increases the minimum exit valuation... probably into the hundred million dollar range". Angel investors will be waiting for years for these exits.
Basil discusses his new book: Early Exits, Exit Strategies for Entrepreneurs and Angel Investors (But Maybe Not Venture Capitalists). It'll make you think...
