NW Energy Angel Kiki Tidwell Seeks to Professionalize Angel Investing Through Kauffman Fellowship

10/18/10

Kiki Tidwell, when she was growing up, had planned on entering the family business. She was raised in Hawaii, and throughout her childhood she and her parents traveled to Aspen, CO often to tend to the family restaurant. When Tidwell graduated high school, she enrolled in the hotel and restaurant management program at the University of Denver.

She never expected then that she would become a prominent angel investor and burgeoning supporter of cleantech innovation.

After college, Tidwell moved to Sun Valley, ID, “to become a ski bum,” she says. She owned a restaurant for a while, before discovering that there were “a lot more lucrative ways to make money that is based on a less fickle customer,” she says.

Today Tidwell splits her time between Sun Valley and Seattle, where she has built a career as a leading cleantech angel investor. Tidwell sits on the Northwest Energy Angels board of directors. She is the president of the Tidwell Idaho Foundation, as well as Idaho Land & Pine, Inc., is a member of the Social Venture Partners, the Cleantech Group, and is an investor in Nth Power Fund IV.

In July Tidwell was admitted to the Kauffman Fellows Program, a post-graduate program, dedicated to identifying, developing, and networking emerging leaders in early-stage venture finance.

At the age of 51, Tidwell admittedly was not the typical candidate for the prestigious fellowship. Most of the fellows in her class are “fresh out of business school,” she says. This is because the program is really designed to give investors “hands on training early on in their careers.”

In fact, one of 32 fellows in the 15th class of the program, Tidwell is a minority—for more than one reason. She’s a woman. She’s a seasoned investor with years of experience behind her. And she’s one of the first angels to be admitted to the program. However, one of the primary reasons she applied to the program is that Tidwell is convinced that angel investors, particularly ones with years of experience under their belts, could benefit from the lessons venture investing have to offer.

“Up until this year they’ve only taken venture capitalists. So this is the groundbreaking year that I made the pitch to them that angels are really a key part of the entrepreneurial ecosystem as well,” Tidwell says.

An angel investor belonged in the program, Tidwell says, because traditional venture capitalists have gravitated toward larger investments in seed and late-stage companies, rather than the smaller deals it takes to get most startups up and running.

Angels, she says, are playing a growing role in the innovation world—especially in burgeoning industries like cleantech—in that they’re increasingly behind the early-stage funding that gets small projects out of the labs, and into the marketplace.

“There’s a gap that has emerged. Venture capitalists used to fund smaller amounts—now they’re raising billion-dollar funds,” she says. “We [angels] fund the really early stage companies, we nurture them along, so that the venture capitalists have more of a product to invest in.”

As part of her fellowship, Tidwell will spend 24 months working a full-time apprenticeship at a venture capital firm—a learning experience that will provide her with skills and knowledge that she hopes to bring back to her role as a cleantech angel. If angels want to play a larger role in early-stage investing, she says, the key is to organize.

“Angels are at the point that venture capital was maybe 10, 15 years ago,” Tidwell says. Her goal is to help bring about the “professionalization of angels as a career choice, as opposed to a hobby.”

Having worked in the cleantech space in Idaho since 2003, where Tidwell says things are finally moving, albeit at a “glacial pace,” she was more than happy to find an entire angel group dedicated to supporting the cleantech space in Seattle—the Northwest Energy Angels. There Tidwell, along with new executive director Margo Shiroyama, have both been able to take strides to help professionalize the space. The 53-member organization is capitalizing on the educational opportunities afforded to the group through field trips to local companies and research institutions, and the organizing of an investment advisory board, which Tidwell backed, to help give the angels a broad knowledge base about the variety of opportunities within the cleantech sector, so that are ready to invest when good opportunities present themselves.

“I push them a lot,” she says. “I’m pushing them to provide really good value to the members and provide the best deal flow.”

And there isn’t just one silver bullet. Success in the cleantech sector is going to depend on “a lot of wins in a lot of different sectors,” she says. That’s why Tidwell is spending two years behind venture capital lines—to bring “insider information on innovation, and investing” to the angel world.

“A critical piece of both angel and venture investing is to help companies succeed, and nurture them, and advise them,” she says. “Venture capital is very cyclical. There have only been two times where it has brought on huge returns in our history, and it’s only been around in its professional form since the mid’60s. I believe there are opportunities in cleantech that could mimic those returns in the future.”

But, in order for the cleantech sector to bring about similar returns, Tidwell says investors—venture and angel alike—need to take a stronger interest in their education surrounding the space. And, she adds, there needs to be an IPO market, an element that has been “pretty stagnant for the last few years.”

Tidwell expects this is all about to change. With companies like Tesla Motors and A123 Systems having successful IPOs, she says things are looking up. The next step, according to Tidwell, is for angel groups to band together, as the NW Energy Angels have, to “professionalize” and promote the education of its members, and take advantage of the research and innovation-rich environment around them.

“Ecosystems like Seattle are exactly perfect for expanding the sectors in cleantech,” she says. “Our group is a non-profit group, so we really only exist to add value to each other. As we educate the angels, as they start to get more into the due diligence of deals, they start to get more of a comfort level, and start to invest in things.”

Thea Chard is a correspondent for Xconomy Seattle. You can e-mail her at theachard@gmail.com or follow her on Twitter at http://twitter.com/theachard. Follow @

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