Calling All Angels: Experienced, Aspiring Angel Investors Confer in Cambridge

6/2/10Follow @wroush

If you Google “Angel Boot Camp,” the first seven results refer to a Victoria’s Secret competition to find the next “runway angel.” Well, there were no models or runways yesterday at the Microsoft NERD Center in Cambridge for Angel Boot Camp (the eighth result on Google)—but there were plenty of entrepreneurs vying for the attention of potential investors.

A free, grassroots event spearheaded by Jon Pierce, founder of Beta House and co-founder of the Awesome Foundation, the point of the boot camp was to build stronger connections between active entrepreneurs, existing angel investors from the Boston area, and former entrepreneurs who’ve succeeded well enough to consider becoming angels. Accordingly, attendees wore colored dots on their name badges: green for those handing out money, orange those seeking it, and yellow for angels-in-training.

Interestingly, the green and yellow dots seemed to outnumber the orange ones: this was one startup event where the focus wasn’t solely on matchmaking between entrepreneurs and investors (as it will be, for example, at tonight’s TechStars Demo Night, also at the NERD Center). The goal was simply to talk through the basics of angel investing—the risks, rewards, and challenges—and to inspire people with some money to spare to take the leap.

It doesn’t take all that much money to get into angel investing, the veterans on hand explained. Many angel investments are as small as $10,000 to $25,000. (Of course, an individual angel probably needs to invest more than that, across a range of deals, to raise the chances that the occasional wins will cover the inevitable losses.) And choosing the right deals as an angel isn’t really a matter of doing exhaustive due diligence, speaker after speaker emphasized; it’s about finding a team that impresses you, in a business where your expertise will help, and then going with your gut feelings.

As prominent local angel Bill Warner, the founder of video editing giant Avid Technology, exhorted: “Figure out what piece [of angel investing] excites you and just do it. Write a check. Join a group. Network with other people. Syndicate. Figure it out.”

Seed stage investing panel at Angel Boot CampThe boot camp event featured a parade of experienced angels and other investors, from the relatively young (27-year-old Alex Ohanian, founder of Reddit, and 32-year-old Angus Davis, now CEO of Swipely) to the more experienced (Warner, John Landry, and Google’s Don Dodge). For the benefit of readers who weren’t at the event, I thought I’d sum up a few of the thoughts that stood out to me as the most original or provocative. Most of these are direct quotes. [Programming note: WBUR's Radio Boston will feature a segment on angel investing today at 3:00 p.m.]

David Cohen, co-founder, TechStars (who has made 25 angel investments, not counting 60 through TechStars): “People ask me, ‘Isn’t angel investing really risky? The answer is of course, yes, it is very risky. But many of us have had companies that have been successful by leveraging the communities that we were in, so for me it was almost a moral imperative to give back and help the up-and-coming companies.”

Sim Simeonov, CEO, FastIgnite: “Studies show a 58 percent annual return on angel investments. That’s not bad—it’s doubling your money every 1.25 years. There’s a problem, though—50 to 70 percent of all angels are making nothing. It’s a world where some people do well and others don’t do well at all. What distinguishes them? Based on my experience, four things: … Next Page »

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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  • Jean Hammond

    I did say “A lot of things are missing from the angel community here in Boston.” BUT in the context that Boston it already a winner in angel investing.
    Over 20 angel groups in New England maybe as many as 600 active investors (no other region except for Silicon Valley has more. (In these groups new angel investors can learn from experienced folks). We have training, efficient syndication going on in New England….
    entrepreneurs can find us and we grow a lot of companies.

  • http://BostonHarborAngels.com Mic Williams

    The “TechStars Boston 2010” yesterday was very exciting. The enthusiasm of the presenters and the crowd was palpable. The ACA New England Regional Quarterly Meeting was another interesting activity which previewed earlier in the afternoon. I was not able to attend the Angel Boot Camp; however, the reviews have been marvelous.
    As a result of the flurry of angel activity, there was an impressive flood of truly wonderful blogs. Don Dodge’s “The Next Big Thing”, Brad Feld ‘s “Feld Thoughts” and Xconomy’s are filled with superb thoughts and information. These blogs contain a wealth of “spot on” information garnered from “tested” sources. There is much to be learned here.
    One benefit of “angel investing “ touched on by some, but not emphasized, is the opportunity to meet great people and form associations. These associations oftentimes develop into relationships of respect, enjoyment and business deals– within and/or without the Angel Group. We can’t help ourselves. We meet great people and we want to do “stuff” with them. “They” may be the entrepreneurs or fellow members and most likely both.
    Obviously many deals are cut by relationships developed in clubs, churches, charities, social activities, and yes, Angel Groups. These are places where you can see the talented, if not the brilliant, interact. The interesting thing about Angel Groups is that they are a catalyst for capable, successful and probably “Well Heeled” individuals to get to know each other. The odds are that you will have trouble finding someone attending an Angel Group who is not interesting, and there is a good chance you will find many fascinating.
    It almost goes without saying that if you put good people together good things happen. Looking for feedback from an important member, I asked if he was finding value in his association with Boston Harbor Angels. He emailed succinctly, Saw some great deals, invested in a few. Met some wonderful people, made a few great friends. As the founder, it made my day.

  • http://www.racepointcapital.com Christopher Mirabile

    I’m with Jean. There are always opportunities for improvement in any complex ecosystem, but after spending time with angel groups from across the United States (and overseas) at the Angel Capital Association Annual Meeting in California last month, it is clear to me that Boston is near heaven for angels and entrepreneurs compared to many places; many would gladly trade their problems for whatever problems we think we have. We need to stop the silly comparisons to the Valley and stay focused on creating and funding innovation. That’s where the value lies – let’s dig it up, get it exposed to the light of day, and into the market. Go Sox.

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