Just Write Checks, Be Humble but Unstoppable, and Boston VCs Are Dinosaurs: 10 Highlights from Angel Bootcamp

6/15/11Follow @gthuang

The pace of tech startup events is a little out of control this week. You can thank (or curse) David Beisel, Jon Pierce, Coolio, TechStars, DartBoston, Xconomy, and many others for that. With some more time and distance, though, we might all look back at this week as a flashpoint in history when the tech community was reborn in Boston.

Or not. These trends are cyclical, so it’s all a matter of degree. But you know it’s a busy week (not even counting the Bruins series) when I’m reduced to writing multiple stories in the form of top-10 lists.

Well, the second annual Angel Bootcamp, which was yesterday at MIT, warrants such a list. I couldn’t make all the sessions (in particular I missed Bill Warner’s closer), but here are the top 10 snippets I heard during the afternoon:

1. “All you have to do is write checks.” That was Dharmesh Shah, the famed investor and co-founder of HubSpot, saying that the reality of angel investing is that all you really need is money. (Which was followed by a slide saying, “I add minimal value beyond the cash. Maybe I can be a VC someday.”)

2. “Dharmesh is full of shit.” That was Laura Fitton of oneforty. Shah is one of her investors, and she was making the point that, of course, he actually adds a ton of expertise despite what he says about just writing checks.

3. “Humility.” Dave Balter of BzzAgent talked about the characteristics of successful founders, and which entrepreneurs angels should seek to invest in. He bluntly pointed out that lots of founders who’ve gotten money probably shouldn’t have, and consequently they have an inflated sense of themselves and their companies. Angels should look for humble teams who are always learning, work harder than others, have strength of conviction and a relentless, fearless, grind-it-out mentality, and believe they are “unstoppable.”

4. “Entrepreneurs need to run a process.” Brian Balfour, co-founder of Boundless Learning (and before that, Viximo), was talking about how to go about seed-stage fundraising. Startups need to follow a step-by-step plan and get their financing done efficiently, he said. Balfour, Fitton, Jeremy Levine (StarStreet), and Raj Aggarwal (Localytics) shared their experiences, which ranged from desperate to disorganized to definitive.

5. “No.” That was David Tisch of TechStars New York on whether he does due diligence on seed-stage investments; there is some debate about how much one can really analyze an early-stage company or idea. Another nugget from Tisch, on what he has learned about the dynamics of angel-VC investing syndicates: “I need to know every VC, so they don’t squash me out anymore.” (The flip side of that was Bijan Sabet of Spark Capital saying, “Choose your syndicates wisely,” and make sure your co-investors have the ability to finance the next round.)

6. “Boston VCs are dinosaurs.” In case you didn’t quite feel the undercurrent of angel-VC competition, that was one member of the startup community speaking on background. Dinosaurs in the sense of hanging on to old models, networks, and ways of doing things. An example: Not letting their entrepreneurs work on multiple projects, as Balter mentioned in his talk.

7. “Crazy shit is going to happen to your companies that you cannot control. You are along for the ride, whatever the destination.” That was David Cohen, founder of TechStars, talking about his experiences as an angel (18 personal investments, 156 total, and “12 exits that mattered”). He calls angel investing “addicting, surprising, and social.”

8. “The follow-on investment market now is quite good.” That was Eric Paley of Founder Collective, moderating an angel panel. How quickly things change: less than two years ago, people were talking about a bloodbath of consumer Web companies that would be unable to get follow-on funding. So maybe things have turned around, but…

9. “I’m seeing a bit of a funding gap—companies have high expectations for an A round. I try to invest in companies with some path to revenue.” That was the ever-pragmatic Roy Rodenstein, co-founder of Going.com and an active angel. (Spoken like someone who’s still investing during a recession or something.)

10. “You only need one giant win to pay for 100 stupid mistakes.” David Cohen again—and this gets to the heart of why angels should (and do) invest in companies they don’t necessarily know that much about. It also brings to life why angel investing can be so addictive (and surprising).

Analysis: For those scoring at home, that was 3 mentions of “VC,” 3 mentions of “checks” or fundraising, 2 mentions of “shit,” and 1 mention each of “humility,” “mistakes,” “addicting,” “fearless,” “unstoppable,” and “win.” (Zero mentions of “bubble,” by the way.)

I’m not sure what that all means, but the above words might hint at the direction the Boston tech angel community is headed. We’ll see how much farther it gets in the coming year.

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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