Wherefore Art Thou Angels? Boston Startup Scene Gears Up for Angel Bootcamp on June 14 (and Wants a Little More Froth)
Yes, I’m well aware that “wherefore” means “for what reason.” In this case, the reasons for being an active angel investor in Boston have to do with being part of a bigger and collaborative ecosystem, giving back to the startup community, and helping create the future of technology. It’s exciting stuff—especially in this day and age when the Boston tech scene is looking for some big successes (or at least more startup activity) to rival Silicon Valley and, increasingly, New York.
That’s all according to Jon Pierce, an entrepreneur, hacker, and founding member of the Awesome Foundation, who is organizing an event called Angel Bootcamp on June 14 at the Tang Center at MIT. I sat down with Pierce recently to chat about the landscape of Boston-area tech angel investing and what has really changed (and what hasn’t) in the past year.
But first, a little more about the goals of his event, which is now in its second year. “As much as it’s about education, it’s also about getting people excited about being an angel,” Pierce says.
Last year’s inaugural boot camp drew about 275 people—mostly investors and aspiring angels, but also plenty of entrepreneurs, as well as leaders from universities, government, and the media. As indicators of its success, one could point to a handful of New England angels who have become much more active in the early-stage scene—people like Ty Danco, Jennifer Lum, Roy Rodenstein, and David Tisch. (Apparently, Tisch met TechStars founder David Cohen at last year’s boot camp; that was where they first talked about the idea of TechStars New York.) Meanwhile, more angel and venture funds seem to be making seed-stage investments. And at least one Boston-area startup, Locately, made a key investor connection at last year’s event.
“We sent a message to the entrepreneurs that we’re serious,” Pierce says.
So what has changed, more broadly, over the past year—and why is this gathering as important as ever? Let’s talk about the f-word. “Seed-stage investors and angels are now starting to highlight the fact that things are a little bit frothy,” Pierce says. “It’s not a bubble, but [company] valuations are high in the Valley and New York. It’s not as true in Boston. We could use a little more froth in Boston.”
Pierce also points to the need to get people who have built successful companies—and in some case have had big exits—involved in angel investing. He’s talking about firms like Where, Kayak, and CSN Stores, and older companies that have been acquired for large sums in recent years, like Quattro Wireless, Maven Networks, Third Screen Media, Starent Networks, and ATG. To some extent this is already happening: just today, Boston startup TurningArt announced a $750,000 seed financinground led by NextView Ventures, an up-and-coming micro VC firm, with Niraj Shah and Steve Conine, co-founders of CSN Stores, also participating along with other angels.
All in all, it’s a good start. “The angel community [and investing activity] has picked up in monstrous levels,” says Gus Weber, entrepreneur in residence at Dogpatch Labs in Cambridge (run by Polaris Venture Partners). Weber also points to a lot more organic, grass-roots events, such as last night’s RubyRiot in Boston, that are helping entrepreneurs and investors make connections, meet potential co-founders, and so forth.
Yet some key problems remain. Weber points to the issue of “restocking” the startup community, in terms of both talent and dollars. Startups around Boston—and everywhere else, it seems—are having to dig deeper and pay more to get talent on both the engineering and business sides. That’s a consequence of big companies and well-funded, established small companies playing hardball with the competition over job offers, signing bonuses, referral fees, and other forms of talent acquisition.
Still, these are all signs that the Boston startup scene is getting more competitive, which should be good for the region. Pierce’s event, in any case, mainly addresses the rise of consumer-facing Web and mobile startups, which he feels is still an under-represented sector among Boston angel investors. But, as observers often point out, all it would take is one or two big successes, like Google, Facebook, PayPal, or Twitter, to change things. And Pierce hopes his event will support the early-stage part of that.
“We want to grow the angel investor community smartly,” he says. “We need to experiment more than we are now.”