TiE Angels Boston, Now in Second Year, Looks to Make More Deals
“Some angel groups tend to have more executives who are high net worth. We tend to have a more entrepreneurial bent,” says Abhishek Jain, chairman of TiE Angels Boston.
That sure is an understatement. The “entrepreneurial bent” he refers to includes a couple of inventors extraordinaire who invest as part of the angel group. Like Venkat Krishnamurthy, co-founder of Align Technology (NASDAQ: ALGN), the maker of invisible dental braces. He founded the CAD software company Paraform and also worked for metrology and RFID startups. Oh, and he also won an Oscar for his development of the 3D Paraform software used to create special effects for movies like “The Mask,” starring Jim Carrey. There is also Jit Saxena, co-founder of Netezza (which sold to IBM for about $1.7 billion in 2010), and Sushil Bhatia, whose patents span Glue Stic, seminar name badges, binding systems, and inks for use on milk cartons, food containers like bottles, boxes, plastic bags and paper pouches, and much more.
TiE Angels Boston is connected to The Indus Entrepreneurs, a global nonprofit group focused on nurturing entrepreneurship. The parent organization just held its annual TiEcon East event last Thursday and Friday, so I thought it would be a good time to catch up with Jain and learn a bit more about what the Boston angel group has been up to, since it first launched in January 2011.
The group has grown to 40 angels and has invested in three companies, starting in July 2011 with Boston-based Buzzient, the maker of social CRM (customer relationship management) software.
TiE Angels Boston allows entrepreneurs to submit pitches directly through its website, and holds monthly meetings to review business plans, says Jain, who is also a vice president for The Blackstone Group. Through this process, the group has evaluated about 170 deals, invited 25 companies to present, and has done due diligence on 10, Jain says. It promises the entire process for looking at a startup will be complete in 90 days.
Because it’s part of a nonprofit, TiE Angels does not manage its own fund, but acts to connect the angel investors with potential opportunities. It invests up to $500,000 per deal, but can syndicate with other investors for rounds of up to $2 million. Its preferences are for startups located in the northeast.
In addition to the enterprise software maker Buzzient, the group has backed AdverCar, a New Orleans-founded startup enabling companies to buy ad space on consumers’ cars, and New York-based Vizibility, whose technology unifies all the social and Web information for a given person in search results. What’s the common theme here?
“We do look for companies that can create disproportionate value by not having a huge burn,” Jain says. “We generally have not—at least yet—invested in the dream projects—like, ‘I’m creating an automatic robot that can do everything around the house.’”
That’s not to say its deals have been a snooze, though. Some current prospects for the group include a maker of a mobile app that uses binocular refraction technology to scan users’ eyes and predict eyeglass prescriptions with up to 90 percent accuracy. (He didn’t name names but our guess is it’s the MIT Media Lab startup EyeNetra.) Not exactly right for the U.S. healthcare market, perhaps, but the $2 eye exam has big potential for emerging markets. The angel group is also exploring startups with different approaches to online dating and online reviews, Jain says.