TechWag

Tonight’s MIT Venture Lab in Seattle is a presentation by some of the Angel fund investors here in town. The room is absolutely packed with people tripping over each other to hear right from the Alliance of Angels here in Seattle. The Seattle alliance of angels is a group of 50 members who support high growth early stage companies in the Pacific Northwest.

There is a small panel of angel fund people, and they are going to tell the group a bit about what they do, and what they are looking for in a company to invest in. The Q&A session at the end of this should be more entertaining than the rest of this.

There are Alliance of Angels Re level, todd dean, northwest energy alliance, todd morris, tacoma angel network, john hughes, and a number of other folks. Rebecca Level from the Alliance of Angels is first up to speak. They are a non-profit organization that 1/2 of the membership is investment firms while others are certified investors. The alliance has been around for 10 years, looked at 2000 companies and invested in 70 with 44 of those being done in the last year. The angel business needs exits, the average exit is 5 to 7 years, with 4 IPO’s and 10 acquisitions. The saying is that “plums ripen slowly, but lemons go sour quickly”. Didn’t know that, there are always interesting internal phrases. There is a 4 step process. Apply on the web site using angel soft, where they set up a 1.5 hour meeting, with slide by slide pitch, with 19 meetings a month. Then they select 6 to move forward to the screening board, 10 minute presentation, with the membership seeing an even smaller pool. There are about 50% of folks that actually make it through this process, but there is a smaller number of folks who actually get funded.

They do provide services, like a pitch clinic, a 2.5 hour clinic on how to put together a pitch. With road shows for other cities in the state. They happen 4 times a month. They also do entrepreneur round every quarter. There is also a blog the AOA blog, the angel angel, and they are also doing an alliance of angels seed fund to open up to more deals.

Todd Dean from the Keiretsu Forum. There is an angel investor primer for the northwest community. There is a 50 billion marketplace for funding companies across the country. Angels tend to invest emotionally, but the Keiretsu forum tries to be more VC with an Angel outlook, in that they do look deeply at the fundamentals. It is getting a lot harder to raise capital so angels are specifically looking for new ways to raise capital. The VC’s are investing more dollars per company, but there is a gap between the startup and the VC. Angels help bridge this gap. Angels invest between 100 and 500K, as an individual investor or as a group of investors. The Keiretsu forum invests between 500K to 3 million dollars in a company if they do the deal. Keiretsu does a lot of due diligence to make sure that they will get pay out. Keiretsu is a for profit company, which is different from the the others in the Angel fund groups.

Keiretsu runs each company through the exact same process to ensure fairness. They have 200 investors now in their pool, with the investment per company going up. They also provide solutions to help fill management gaps, or solution gaps that will help carry them over to their exit strategy. They are also global in nature, europe and china are also areas that they invest in. There are fortune 500 company owners and members in the Keiretsu forum, but there are a lot of serial entrepreneurs in the group as well. They have had 4 M&A, 3 Bankruptcy, 3 turn around, and 1 IPO. They get over 100 inquiries a month, with only a small percentage that will actually get funded.

tags: angel fund, investor, mit venture lab seattle, seattle, investing, grade, cut.

Tags: funding, Participation //