Articles and News
August 5, 2021 - ARI 2020 Halo Report
March 1, 2021 - 2020 PACT Philadelphia Venture Report
January 28, 2021 - Big4Bio Philadelphia - Life Science 2020 Year In Review
January 18, 2021 - Venture Capital Funding Report Q4 2020 - PwC and CB Insights' Q4 2020 MoneyTree report highlights the latest trends in venture capital funding globally.
January 2021 - ACA Angel Funders Report 2020 - Highlights
January 14, 2021 - Venture Capital’s Best Year Ever, by Amy Whyte, Investor Institutional
Big VC firms led the industry to new records in deal making, exits, and fundraising.
September 28, 2020 -Building Your Own AngelList: 4 Expert Tips on How to Network to Find Investors for Your New Business, www.entrepreneur.com - Having a brilliant product, team, and business model are important starting points in your entrepreneurial journey; but at some point, you’ll need to start raising funds to take the next step. Getting in front of the right investors requires time—perhaps more than you thought—and a dedicated search for the right backer. (To read more click title above)
August 28, 2020 - Fox Rothschild & CBRE Philadelphia Life Sciences Market
June 15, 2020 - 14-investors-have-urgent-tips-for-your-first-meeting
March 19, 2020 - PCI Ventures 2019 Spotlight
March 4, 2020 - SEC Proposes Rule Changes to Harmonize, Simplify and Improve the Exempt Offering Framework,
The Securities and Exchange Commission today announced that it has voted to propose a set of amendments that would harmonize, simplify, and improve the exempt offering framework to promote capital formation and expand investment opportunities while preserving and enhancing important investor protections.
Feb 18, 2020 - PACT 2019 Philadelphia Venture Report
August 1, 2019 - 2018 ARI HALO Report, by https://angelresourceinstitute.org
July 29, 2019 - ACA Angel Funders Report, by www.angelcapitalassociation.org
May 3, 2019 - Business starter Ben Franklin says state funding shortfall puts Pennsylvania growth at risk, by Anthony Salamone, www.mcall.com
Many in the Lehigh Valley might be unaware that Ben Franklin Technology Partners of Northeastern Pennsylvania has been launching businesses since Ronald Reagan was president. But they’re probably familiar with the innovative companies the nonprofit has nurtured.
A very short list includes Bethlehem-area companies OraSure Technologies and Rea.deeming Beauty Inc.; Ciclon Semiconductor Corp., which is now part of Texas Instruments at Ben Franklin’s TechVentures facility; and organic toothbrush-maker Radius Corp. in Kutztown. Once fledgling businesses in Ben Franklin’s incubator, they were aided by money, technical support or office space from the organization, growing into pillars of the Lehigh Valley economy. (To read more click title above)
April 29, 2019 - Angel Capital Association Announces Angel and Company Awards and New Investment Data at 2019 ACA Summit, by ACA
CHICAGO, April 29, 2019 /PRNewswire/ -- The Angel Capital Association (ACA), the world's leading professional association for angel investors, announced the winners of national awards at the 2019 ACA Summit taking place in Chicago. Winners include Kansas City's Marianne Hudson for the angel who has advanced the field of angel investing and Joylux, a Seattle startup, as the most innovative company funded by ACA members.
The 2018 Angel Funders Report, based on the ACA Data Analytics platform, provides insights on data from 68 angel groups across North America. Among the key insights were: 23% of funded companies had female CEOs, the median deal size was $1.2 million (compared to $1 million in 2017), the average pre-money valuation of deals is $6 million, more than half of investments were in the seed round but angels continued to invest in later rounds, and angel groups nearly triple their investment when they are on the company boards. A formal report will be published in May. (To read more click title above)
February 7, 2019 - Seed-stage capital raising: Why you should keep the deal simple, by Jason Rose, www.smartcompany.com
I was recently in discussion with a fintech about going in on their seed round. Investing at any point in a startup’s lifecycle is challenging, but it is especially nail-biting at the seed stage because so many questions about the startup remain unanswered.That’s why any sensible investor going into a seed round knows there is a very high chance they will lose their entire investment. It’s an all-or-nothing play.
It doesn’t matter how many previous exits the founders may have had, how large the startup’s total addressable market may be or how impressive their technology is, seed investing always carries with it a very high chance of a total capital loss -- even with detailed due diligence.
(To read more click title above)
January 9, 2019 - Study: Ben Franklin Grew Pa.'s Economy by $4.1 Billion, Created 11,407 Jobs from 2012 to 2016,
January 8, 2019 - The Economic Impact of the Ben Franklin Technology Partners, 5th Edition, A study by the Pennsylvania Economy League
December 10, 2018 - A Philadelphia digital health accelerator shares how it created a blind selection process to boost diversity, by Stephanie Baum, https://medcitynews.com
The University City Science Center's DHA program created a blind initial application process that focuses on the founders’ ability to communicate their idea with the goal of removing biases associated with how screeners perceive the founding team. (to read more click title above)
December 6, 2018 - Do rising venture capital investments signal rising economic dynamism ahead?, by Brett Swanson, www.aei.org
Despite the recent drop in Silicon Valley stock prices, there is some good news beneath the surface of technology finance. In their most recent update, PitchBook and the National Venture Capital Association showed that US venture investments for the third quarter totaled nearly $28 billion. For the year, it looks like venture investments will top $100 billion, exceeding the previous record by more than $20 billion. (to read more click title above)
December 6, 2018 - Where Angels Don't Fear to Tread: Tips for Aspiring Early-Stage Investors, by Gosia Glinska, www.newswise.com
Like wealthy New York “angels” who funded Broadway productions a century ago, today’s angel investors have a healthy appetite for risk, providing personal capital to fledgling companies in exchange for equity. While angels don’t get the same attention as venture capitalists (VCs), who tend to focus on later-stage investment rounds, they do play a key role in the financial ecosystem for innovative, high-growth startups.
After friends-and-family financing, angel investors are the largest source of outside funding for nascent ventures, filling a critical gap left by VCs. In 2017, more than 280,000 U.S. angels funneled $23.9 billion into 61,560 startups.[i] And, according to a recent survey of U.S. angel groups, the average check written by an angel was $35,255, with a median of $25,000.[ii] (to read more click title above)
December 5, 2018 - How can angel investors support animal health innovation?, by Amanda Curtis, , https://animalpharm.agribusinessintelligence.informa.com
With a growing population putting demands on farmers and producers to create sustainable protein, and the transformation of pets from companion animals to family members, the animal health industry is seeking innovation. Consultant Amanda Curtis explains how angel investment could fuel this much-needed innovation. (to read more click title above)
September 25, 2018 - How Angel Investors And Angel Groups Work. by Alejandro Cremades, www.forbes.com
How do angel investors and angel groups work? Where do you find them as an entrepreneur?
Angel investing has not only become trendy and highly profitable, it has emerged into being a powerful source of fuel for the national economy, jobs, and new innovation. For entrepreneurs, angels have become a primary source of funding, and for many startups, a vital part of their existence. How do angels and groups work? How is this type of fundraising different? How can founders connect with this money? (to read more click title above)
August 10, 2018 - ACA Angel Funders Report - Pilot
August 10, 2018 - Angel Investors Inject Nearly $39 Million into New Jersey Innovation Ecosystem in First Half of 2018, www.njeda.com
August 5, 2018 - 50 Angel Investors Based On Investment Volume And Successful Exits, by Alejandro Cremades, www.forbes.com
Who are the leading angel investors startup entrepreneurs should be pitching right now? How do you connect with them?
Effective fundraising for startups isn’t about how many people and firms you can blast your opportunity out to. It’s about getting in front of the right investors, with a strong pitch deck. A recent DocSend survey shows successfully funded startups contacted an average of just 58 investors, made 40 meetings, and took just 12.5 weeks to close their funding round.
Once you know who to pitch, it’s all about perfecting the pitch deck to close your next round of funding. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash. Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400M (see it here)
As a follow up to this piece, and if you are looking for institutional investors, in this Forbes report you will be able to find the 10 Venture Capital Investors to be pitching based on recent activity. (To read more click title above)
August 2, 2015 - How Venture Capital Works, by Alejandro Cremades, www.forbes.com
Venture capital firms are without a doubt the muscle behind innovation as they support the company they may invest in, from the early stages, all the way to IPO — especially those with larger funds that have billions of dollars under management.
Defining the Roles at a VC...As described in my book, The Art of Startup Fundraising, VC firms have different types of individuals working at the firm. (to read more click title above)
June 6, 2018 - How Women Angels Are Good For Innovation And The Economy, by Geri Stengel, www.forbes.com
Angel investors — wealthy individuals — give seed money to startups with the potential to scale. They are also often involved in providing advice, and making introductions to other investors, customers and talent, and sit on the boards of high-growth startups. Only a tiny percentage of companies are funded by angels — less than 1%. Research finds that startups that have angel backing are more likely to survive. Angel-backed firms also hire more employees and are more likely to have a successful exit. The economy needs angels and it needs angels who understand underinvested markets. (To read more click title above)
May 21, 2018 - VC valuation trends in 7 charts, by Dana Olsen, www.pitchbook.com
Venture valuations are continuing to increase across all stages, according to our 1Q 2018 VC Valuations Report. The recently released analysis puts a spotlight on valuations in the US across all stages, along with detailed information on step-up valuations, exits, deal terms and more. Below is a roundup of charts with highlights from the report, from the median time between rounds to the drop in the number of deals with participation rights. (To read more click title above)
May 7, 2018 - Delaware Bio Applauds Passage of Angel Investor Tax Credit Legislation, www.businesswire.com
The Delaware BioScience Association (Delaware Bio) applauds the Delaware General Assembly’s passage of the Job Creation and Innovation Act for Small Technology Companies (HB 170). This establishes incentive for angel investors to provide crucial capital to early-stage companies engaged in innovative scientific or high-tech work. (To read more click title above)
For additional information please go to http://delawarebio.org
May 2, 2018 - Who is the American Angel?, Source - Laura Huang, Andy Wu, and Angel Capital Association (Marianne Hudson, Elaine Bolle)
April 26, 2018 - Angel deals see big increase in female firms and greater geographic diversity, according to HALO Report, By Robert Ksiazkiewicz, https://ssti.org
In 2017, 25.7 percent of all angel capital group deals went to a founding team with at least one female founder, up from 17.0 percent in 2016, according to the Angel Resource Institute’s (ARI) HALO Report: 2017. The report also found a sizeable increase in the number of deals made for companies that included at least one minority female founder – 5.5 percent in 2017 (1.0 percent in 2016).
The HALO Report: 2017 is based upon data collected from angel groups as well as individual angel groups across the country. To collect the data, ARI uses both survey responses and PitchBook online resources. In total, the study’s database includes 3,617 deals made by angel groups. ARI, however, excluded deals with first-time investment rounds greater than $4 million to avoid skewing the data. ARI also excluded deals made by individual angel investors outside of groups in 2017 – they report that 1,499 such individual angel investor deals were made. (To read more click title above)
April 20, 2018 - 2017 HALO Report Released Analyzing Angel Investment Activities in U.S.
January 8, 2018 - Our Favorite Articles About and By ACA Members in 2017, By: Marianne Hudson, ACA Executive Director
November 28, 2017 - The American Angel Campaign (full study)
November 13, 2017 - Angel Group Leader Compensation Results from Fall 2017 Survey of ACA Members, By Christopher Mirabile
November 6, 2017 - 2017 1H ARI Halo Report
November 2, 2017 - PACT 2017 Philadelphia Venture Report -
October 6, 2017 - Eight essential questions for startup founders looking to raise venture capital by Martin Kovas, www.smartcompany.com
Startup founders seeking to raise venture capital should expect to face tough questions, and lack of preparedness may see investors choosing to focus their attention elsewhere.The questions will likely come thick and fast, and it is best to have all bases covered when fronting investors. But what are some of the more common questions that startup founders can expect to face? (To read more click title above)
September 29, 2017 - Seeking capital? How to clear a sophisticated investor’s bar by Andrew Walsh, https://westfaironline.com
An entrepreneur whose business plan includes seeking growth capital for a growing business — perhaps after initial self-funding or obtaining seed capital from family and friends — should be aware of the business and legal attributes an experienced “sophisticated investor” will look for. Regardless of whether the investor is an angel, an angel group, a venture capital firm or a family office, the sophisticated investor will have evaluated hundreds of opportunities, achieved liquidity in some, but also written off others as failures. This investor knows the key markers of a business equipped to grow sustainably. (To read more click title above)
September 21, 2017 - More women are becoming angel investors, and many want to help make the world a better place, by Carrie Ghose, www.bizjournals.com
Women are rapidly changing the face of startup investing at the earliest stages, and soon could be changing its impact.
There is not yet parity among angel investors, but women are gaining: 22 percent were female in a survey this year of Angel Capital Association members. Women made up 30 percent of those investing for two years or less, compared with 18 percent of veteran investors.
"Growth in angel investing is coming with women," said Marianne Hudson, the trade group's executive director.
She outlined the survey results for the first time at the annual VentureOhio dinner this week in Columbus, a statewide annual conference for statewide technology entrepreneurs and investors. Nearly 1,700 of the group's 13,000 members participated.
More telling, 51 percent of female angels say the gender of a startup's founder is important in making an investment decision, compared with 6 percent of male investors.
"A lot of women care about investing in women-led companies," Hudson said.
Women also were twice as likely to say they cared about a startup’s social impact. (To read more click title above)
September 16, 2017 - 10 Steps To Investing Successfully In New Ventures, by Mark Zwilling, http://blog.startupprofessionals.com/
Investing in entrepreneurs and startups is a fun but different world from investing in conventional stocks, bonds, and commodities. First of all, it’s more of an investment in people than in a business, since the startup is usually an idea barely half-baked when they need your money. Secondly, the risk is very high, since as many as 90% of startups fail in the first five years.
On the plus side, it’s an opportunity to get in early and really help make things happen that will change an industry, or change the world. It’s an opportunity for that “big bang” return of 10X to 100 times your initial investment, like early investors in Google, Microsoft, and Apple. Finally, it’s an opportunity to “give back” what you have learned in your own career for the next generation. (To read more click title above)
August 25, 2017 - Here’s a list of 45 women investors in Philly, by Roberto Torres, https://technical.ly/philly/
Earlier this year, as the annual Angel Venture Fair was wrapping up,MilkCrate CEO Morgan Berman dropped some truth to Philly.comreporter Diane Mastrull:
“It is a little bit awkward for me to just go up to all these middle-aged men in sports jackets in the Union League.”
A diversity-challenged angel and venture capital scene isn’t just a Philly issue. The problem also goes beyond just gender. And as our sister site Generocity has reported, the lack of diversity is also found in the impact investment scene.
That’s why when a reader and community member — who wished not to be credited — sent us a list of 30+ women investors, we knew we had to publish it. Here’s the list, with additional contributions from Archna Sahay, Red and Blue Ventures’ Brett Topche, SRI Capital’s Doc Parghi and Safeguard’s Heather Hunter. (To read more click title above)
May 11, 2017 - Angel investors are the first stop in a new era of drug development, by Elana Gordon, www.newsworks.org
Once a month, 40 or so executive types break from their regular routines to meet up for the day. There's schmoozing, a catered lunch, and of course presentations. Lots of them."We get 300 to 400 applications a year, and screen it down to about 200 applications," said Ellen Weber, director of the group. They further whittle down the stack to a select few, who then make it to this in-person round, or rather, the monthly get together of Robin Hood Ventures in Philadelphia.
This is where aspiring start-ups make their direct ask for money from members of Robin Hood. It's an angel group, made up of independent certified investors (though mostly men, they're business-types, not men in tights).
In many ways, spaces like this have become a critical entry point for those in the biotech and pharma world, looking to transform an idea into an actual therapy or treatment. (To read more click title above)
May 4, 2017 - Catherine Mott Honored with Hans Severiens Award, by Marianne Hudson, ACA Executive Director, www.angelcapitalassociation.org
It was with great enthusiasm that the Angel Capital Association honored Catherine Mott with the prestigious Hans Severiens Award at last week’s 2017 ACA Summit. The Hans Severiens Award is presented annually to recognize one individual’s work in advancing the field of angel investing. Catherine is a great representative of the spirit of the award, with impacts ranging from developing and educating angel best practices to regulatory policy work to advocating for startups and helping expand the diversity of the angel investing community. (To read more click title above)
April 31, 2017 - 2016 Halo Report - Annual Report on Angel Investments - www.angelresourceinstitute.org
April 12, 2017 - 2017 Angel Capital Association Summit: Angel Investors Drive the Success of American Startups and Economic Growth; Angel Capital Association
The Angel Capital Association (ACA), the world's largest professional organization for accredited investors, will host investors from around the world at its 2017 ACA Summit, April 26-28 at the San Francisco Marriott Marquis. ACA Summit speakers will address topics impacting individual investors and investment strategies, including building diversity among entrepreneurs, Trump Administration impact on healthcare investing, and growth in new sectors such as blockchain and cannabis startups.American angel investors pumped an estimated $24.6 billion into more than 70,000 startups across the country in 2015. Many of these companies are innovative, high-growth firms that create the most net new jobs in our economy and distribute new products and services that make a difference in people's lives. ACA will celebrate great investments and 60 successful exits for ACA members and their portfolio companies at the ACA Summit, demonstrating how "Angels Drive the Success of Great Startups and Economic Growth." (to read more click title above)
April 12, 2017 - Invent Penn State’s Fund For Innovation helps start seven new ventures, by Nena Ellis Koschny, http://news.psu.edu
A little less than two years after the launch of the Fund for Innovation, Invent Penn State has backed nearly 50 emerging Penn State technologies and has provided startup funding to promising new ventures that were born out of the program.“Although many universities have commercialization programs,” said Vice President for Research Neil Sharkey, “the speed and volume of success that Penn State has experienced recently is unique.” (to read more click title above)
March 31, 2017 - The Best Routes to Angel Liquidity, By Marianne Hudson, www.forbes.com
The biggest question for angel investors in the last decade is: “How do I get a return on my investment?” Without financial returns, most angels aren’t able to keep plowing money into new startups.
So, what does an angel need to do to get their money back, or better yet, make great returns? Here is the best advice I’ve gotten on getting to liquidity or exits from some of my favorite angels and experts over the years. Interestingly, the advice covers before, during, and after you invest.
Align with the entrepreneur on exit plans by asking good questions when you’re first evaluating a company
John O. Huston, a founding member of the Angel Capital Association, suggests that great exits start with three entrance questions, including “Is there exit goal congruence between the investors and the entrepreneur?”
To determine if there is exit goal congruence with entrepreneurs you are considering investing in, Huston suggests sharing data on recent exits in their industry and region. The data discussion opens eyes and builds understanding, as many entrepreneurs plan on an unusually large exit such as Facebook’s $19 billion acquisition of WhatsApp but a $50 million to $200 million is more likely. (to read more click title above)
March 16, 2017 - CY 2016: Ben Franklin Approved $10.6 Million in 52 Companies, www.sep.benfranklin.org
March 14, 2017 - Pittsburgh tech startups continue to attract investors, by Aaron Aupperlee, triblive.com/local/allegheny/
Pittsburgh technology startups bucked a national trend by attracting more venture capital investment in 2016. Funding for Pittsburgh-area companies from venture capital firms increased 8 percent in 2016, jumping from $217.4 million in 2015 to $235.1 million, according to a report by Innovation Works and Ernst & Young released Tuesday. Nationally, venture financing dropped 32 percent in 2016, falling from $77.3 billion in 2015 to $52.3 billion. “In a year when venture capital dropped significantly across the United States, Pittsburgh was up in every category,” said Rich Lunak, CEO of Innovation Works.The report found that in 2016: Total investment in Pittsburgh-area technology companies was up nearly 35 percent to $376 million; Investment from venture capital firms rose 8 percent to $235.1 million; The number of deals increased from 35 in 2015 to 39; Seven companies raised $15 million or more; only two did in 2015; Ten companies were acquired by larger firms in deals that topped $275 million. (to read more click title above)
March 7, 2017 - BusinessWomen First Winner: Catherine Mott, by Richard Cerilli, www.bizjournals.com/pittsburgh
When the Dodd-Frank Wall Street Reform and Consumer Protection Act was under review, Catherine Mott stepped up to make sure her industry wasn’t adversely affected. As a member of the public policy committee of the Angel Capital Association, she helped affect changes in proposed regulations. “One of the provisions would have changed the definition of an accredited investor for companies,” she said. “It would have eliminated one-third of the activity in our industry.” To view a slideshow of the 2017 BusinessWomen First winners, click here. Mott started her company, BlueTree Capital Group, long before angel investing companies became ubiquitous. “At that time (2003), there were about 100 angel groups around the country,” she said. “Now there’s at least 500.” (to read more click title above)
February 27, 2017 - What Angels Need To Do To Get The New, Best Deals, By Marianne Hudson, www.forbes.com
The holy grail of angel investing is finding the best entrepreneurs and companies to invest in, and then to support those companies and protect yourself after you invest. I recently saw a piece with insights on a new trend behind the formation of some of the best startups – the kinds of companies that draw many investors and require quick action to ensure you get into the deal. What do angels need to do to make sure they have a chance to invest in these startups? (to read more click title above)
February 1, 2017 - $6.3B in Life Sciences investments are woven into economic fabric of the region, www.sep.benfranklin.org
As previewed at the IMPACT 2016 Capital Conference, the Greater Philadelphia Life Sciences Report details investments in Life Sciences companies from 2011 through the first half of 2016. This study explores our region's Life Sciences footprint and investment activity over the last five years and details the key findings that characterize the sector’s evolution in the region. It was jointly created by Ben Franklin, BioAdvance, CEO Council for Growth, the Chamber of Commerce for Greater Philadelphia, EY, Life Sciences PA, PACT, Philadelphia Works, Select Greater Philadelphia Council, and the University City Science Center, in collaboration with IHS Markit. According to the report, the Greater Philadelphia Region (GPR) is positioned to lead the next stage of disruption within the spectrum of Life Sciences disciplines, thanks to its world-renowned research institutions, top biomedical programs, and a healthy ecosystem of small and large enterprises and investment activity. (To read more click title above)
January 30, 2017 - 25 Must Reads for Angels From 2016, By: Marianne Hudson, ACA Executive Director, Originally appeared on Forbes.com
On my mission to get smarter and smarter about angel investing, I think it’s important to read as much as I can from leading investors and experts in entrepreneurship. There were some really great articles last year that made a difference to my own investing and thinking about trends and policies. Here are 25 top articles that caught my attention in 2016. (to read more click title above)
January 27, 2017 - Reg A review: Mini-IPO, or mini-IP, oh? By Grant Harvey, crowdfunding360.com
This week, Scott Purcell of FundAmerica provided his take on a report released by the SEC on Regulation A. Tracking all campaigns and funds raised through Q3 of last year, the report had a lot of insight, especially for those who’ve drank enough Kool-Aid to consider launching what many are calling a “mini IPO” in place of a real IPO.After reading through Purcell’s highlights and some other choice reading materials from last week, those of us at Crowdfunding 360 thought it would be worth putting together our own Reg A review to analyze what it would take to kick off one of these deals and make it worth an issuer’s time and expense.
First, a brief review of the SEC’s findings. Through Q3, 147 offering statements were filed, of which 81 were qualified by the SEC. 49 of those were Tier 2, and 32 were Tier 1. Personally, I’m surprised anyone would bother with a Tier 1 due to Blue Sky limitations and the $20 million cap. Out of these filings, there was an $18 million average max raise, 87% raised equity while 13% raised debt, and your typical Reg A issuer had no assets, revenue, or net income to speak of. Pretty straight forward, no real surprises.
The bigger surprise to Purcell was the SEC’s finding of an average 121 days between initial filing to qualification. This is actually in line with what I saw during my time working on Reg A marketing campaigns, where there would be a hurry to launch the testing the waters campaign as if it were the real deal, only to wait months and months to go live and subsequently, losing all momentum from that initial push. (to read more click title above)
January 25, 2017 - 3 charts that show the effect of venture fundraising on founder ownership, by Adley Bowden, http://pitchbook.com
Raising money inevitably dilutes the stakes of company investors, employees and founders, but the idea is that a growing valuation results in a net positive, as it increases the value of everyone’s now-smaller slice of the pie. That's how we end up with billionaire founders like Bill Gates, Jeff Bezos, Mark Zuckerberg, etc.
So what does that dilution actually look like for founders/founding teams as they move through their capital raises? How much should founders expect to own after raising over $50 million? Hint: It's not a lot. To get cold hard data, we turned to the results of J.Thelander Consulting’s private company option pool and ownership survey, which includes responses from 380 private venture-backed companies in the US.
One key thing to know is that when it comes to capital requirements and valuation multiples, no two industries are the same. As a result, founders see different levels of dilution depending on their industry. So instead of showing all companies lumped together, we had J.Thelander Consulting break it out by biotech, medical devices and tech. (To read more click title above)
January 13, 2017 - 25 Must-Reads For Angel Investors, By Marianne Hudson, www.forbes.com
On my mission to get smarter and smarter about angel investing, I think it’s important to read as much as I can from leading investors and experts in entrepreneurship. There were some really great articles last year that made a difference to my own investing and thinking about trends and policies. Here are 25 top articles that caught my attention in 2016. I think they’re worth another read, or a first read in case you missed them. (to read more click title above)
January 6, 2017 - 3 Types of Capital – An Overview for Entrepreneurs, By Erica Drake, CEO of Maverick Entrepreneurs
To be completely blunt, the battle to find funding is so competitive that most likely you’re going to take whatever funding you can get to start (and that’s all right). Remember you can always exchange expensive money for cheaper money later. The war isn’t over until you cash out with an exit strategy and there’s a long way to go before you need to make that decision.To tell an entrepreneur that a prospective investor may not be ideal is like telling a starving man that the food doesn’t taste very good. As a fellow entrepreneur, I can tell you that the passion and desire to find funding — any funding — often outweighs a logical business decision. If you must take expensive funding from a less than desirable source, be sure to structure your deal using a strategic long-term plan, specific milestones, strong corporate bylaws and a predetermined exit strategy for this funding round.
Remember, this is a long, grueling war and more die than live. So it’s almost arrogant and naive to think your company is so unique that cheap money will fall into your lap. Hopefully, it does. However, unless you have a rich uncle, personal trust fund or your own wealth don’t count on it. So, be open to ALL options right now. (To read more click title above)
December 31, 2016 - The American Angel Campaign,
In 2014 200,000+ American angels invested an estimated $24B in more than 73,000 startup deals. Although angels have powerful impact, little else is known about these high-net worth individuals. This first-ever study will define the American Angel today. Take the survey now. Help us unveil the American Angel today, uncovering emerging trends and perhaps changing age-old, but wrong, assumptions.
Jointly launched by the Angel Capital Association and Wharton Entrepreneurship, this ground-breaking campaign will benchmark the mix of angel investors across America by age, gender, ethnicity and pinpoint any commonalities such as the path that got them there or how they discover and fund early-stage companies.
December 22, 2016 - What the Heck Are Warrants? Answers To Questions Some Angels Are Afraid To Ask, By Marianne Hudson, www.forbes.com
Don’t you just hate it when technical jargon is used and isn’t explained? The term “warrant” is used all the time in angel discussions, but when I talked with several newer angels recently, almost none understood what a warrant really is and they didn’t want to ask for fear of sounding stupid. Their thinking is along the lines of “if I’ve been an angel for a year and heard this term again and again, I must be an idiot if I don’t understand the basics.” I’m here to say that isn’t true.Here are some FTQs (Frequently Thought, but rarely asked, Questions) about warrants:
What is a warrant? Like stock options for company employees, stock warrants are contractual rights for investors or other key third parties to buy stock in the company at a preset price for a set time period . In the case of early stage deals, they are offered as an incentive to invest – a mechanism that will allow an investor to increase their position in the future for today’s price. Early stage companies also use them in connection with the establishment of a credit facility – some lenders will ask for warrants as part of the lending deal. (To read more click title above)
December 15, 2016 - Eleven More Central PA Companies Just Received Ben Franklin Funding!, cnp.benfranklin.org
This week, at our December 2016 Board of Director’s meeting, eleven company projects were approved to receive funding and business support services from the program. Companies included - FairTech Labs, LLC, Atoptix, LLC, CRIMEWATCH Technologies, Inc., Sensor Networks, Inc., Adiaon, LLC, Persea Naturals, LLC, SIG Medical Corporation, PressBox Media, X Materials Processing, LLC, SAY Plastics, Reflexion Interactive Technologies. (to read more click title above)
November 17, 2016 - Startup Valuations -- There Is No Universal Truth, By Marianne Hudson, www.forbes.com
585,000: the number of links Google provides if you research “startup valuations.” If you dig in you will discover calculators, techniques, methodologies and many opinions. What you won’t find is one approach that works every time. That’s why hearing valuation insights from top angels is incredibly useful. These views help separate the wheat from the chafe, and help us shape our own personalized valuation process.
To help you refine an individualized approach to determining the correct valuation for startups you invest in, I tapped the sage advice from a handful of professional angel investors from across the country. All Angel Capital Association (ACA) members, these angels and others connect to share investment ideas, strategies and deal flow. The following views offer an excellent place to start. (To read more click title above)
November 1, 2016 - 12 Angel Investor Tips For First-Time Entrepreneurs, By Christopher Mirabile, Adapted from a piece that originally appeared on The Seraf Compass
I was speaking with Jim Connor of Sand Hill Angels in Silicon Valley and Catherine Mott of BlueTree Allied Angels in Pittsburgh and the subject of fundraising advice for first time entrepreneurs came up. I took the opportunity to jot down answers to 12 questions every fundraising entrepreneur should think through. Here’s an edited transcript of the discussion. (To read more click title above)
October 11, 2016 - Estate Planning For Angel Investors: How To Maximize Investment Returns For Your Family And Future, Marianne Hudson, www.forbes.com
Many angels think about building great returns from our investments, but how many have thought through the strategies and techniques to ensure most of those returns actually get to our children, grandchildren and preferred charities? So many angels have goals to share our wealth, and a recent event,Celebrating Women Angels opened my eyes to some helpful ways to think about estate planning for angel investments to meet those goals. In addition, estate planning can be used to share the knowledge and joy of angel investing with your children.
At this event, I met estate planning experts Adrienne Penta and Anne Warren, both of Brown Brothers Harriman. Adrienne and Anne have great tips for how to marry estate planning with angel investing. Anne explains, “Many think estate planning is about what happens to your assets when you die, but some of the most interesting and fulfilling planning can, and should, happen during your life.”
Including -
September 8, 2016 - 8 Steps To Becoming An Angel Investor, Marianne Hudson, www.forbes.com
If you’ve acquired some wealth in your life, you may have heard the buzz around angel investing and considered the idea of being an angel investor. Not only is it a blast to help innovative entrepreneurs, it also offers a chance to make superior financial returns. Even so, perhaps directly investing in and mentoring startups still sounds scary. You may wonder: How do people really get started as angels? And how do you know it is right for you? Looking back at a decade of angel investing at the Angel Capital Association, I see eight main steps to successfully getting started in angel investing (and most aren’t scary at all).
August 3, 2016 - Pa. regulators issue advice on equity crowdfunding; Tim Stuhldeher, http://lancasteronline.com/
Interested in raising money for your small business through equity crowdfunding? The Pennsylvania Department of Banking and Securities has some advice for you. The department has just issued a two-page primer (PDF) on the new fundraising method, which became legal nationwide this spring. It's posted in the "Entrepreneur Education" section of the department's website, which offers in-depth information on various ways of raising capital. Equity crowdfunding allows ordinary people to buy shares in startup firms, with the prospect of earning returns if the company succeeds. Previously, only well-to-do "qualified investors" could do so. It's distinct from ordinary crowdfunding, in which people donate to a cause or project, sometimes in return for a gift or a product. (to read more please click title above)
July 27, 2016 - BioAdvance investments hit $2.9M in fiscal 2016, by John George, www.bizjournals.com/philadelphia
BioAdvance, the operator of a $50 million early stage life sciences fund that work with health-care entrepreneurs in the mid-Atlantic region, invested $2.9 million in companies and technologies targeting human health during fiscal 2016The investments, according to a report released late Tuesday by BioAdvance, included nine new companies and technologies plus six follow-on investments of exiting portfolio companies. (to read more please click title above)
July 21, 2016 - The Smart Tax Question - Invest In LLC Or C Corp Startups?; by Marianne Hudson, www.forbes.com/
Angels have many factors to consider when reviewing investment opportunities. Here’s another one that not many angels think about: which type of startup entity is better for your taxes? Should you insist on a C Corporation startup, with the potential for the Qualified Small Business Stock(QSBS) perk of no federal tax on your investment gains? Or, should you hedge your bets and invest in a startup formed as a Limited Liability Company (LLC), which offers more flexibility, ensures you pay only a single tax, and also is the structure that many acquirers prefer?I consulted a tax expert who has advised angel investors through this decision.Jeffrey Kelson, Tax Partner at EisnerAmper LLP, says, “Whatever you do, don’t go in with blinders on – you have to be educated.” (To read more click title above)
June 29, 2016 - Angel Investors Maintain Diverse Portfolios, with Median Check Size of $25,000, According to Early Results of "The American Angel" Campaign; PRNewswire, www.angelcapitalassociation.com
Angel investors – accredited individuals who collectively support the American startup industry with some $24 billion of capital per year – maintain diversified portfolios that represent roughly 5 percent of total held assets, with median investments of $25,000 per deal. Today, the Angel Capital Association (ACA) andWharton Entrepreneurship at the University of Pennsylvania released these and other early insights from the ongoing "The American Angel" survey, which is designed to provide the deepest research to date into the characteristics of angel investors. The survey is open for more angels to participate.Additional preliminary research findings to date:
June 21, 2016 - Angel Syndication: Strategies To Engage Investors Quickly - Effective angel syndication is all about speed and momentum, plus a dash of scarcity. CHRISTOPHER MIRABILE; www.inc.com/
Filling out your round through angel syndication is something entrepreneurs need to be savvy about. Having a basic plan and strategy in place for approaching the syndication process is fundamental. However, the key success factors are engagement and speed. It boils down to whether or not you can engage investors enough to start writing checks, and doing this as quickly as possible so that you can get back to your real job - running the business. (To read more click title above)
June 14, 2016 - 10 reasons for having an advisory board; by Marc Kramer, www.bizjournals.com/kansascity
Entrepreneurs focus a lot of attention, and rightfully so, on building the best product or service followed by attracting capital and recruiting great sales/marketing people. They spend a fair amount of time selecting an accountant and attorney, which are equally critical to the success of the organization.
One area that a lot of entrepreneurs overlook or put low on the priority list is putting together an advisory board. (to read more click title above).
May 31, 2016 - How Do You Compare to Other Angel Investors?; by Marianne Hudson, ACA Executive Director, www.angelcapitalassociation.org/
Ever wonder how your investment activity and background compares to other angels in the US? Take The American Angel survey to put in your information and get early access to detailed reports to learn more.
ACA is partnering with Wharton Entrepreneurship to develop the first ever large dataset of US angel investors to understand who angels are demographically, how they became angel investors, how angels make decisions, and what level and type of investment activity they have. The project should benefit angels as an asset class as it brings more visibility to angels, supports a stronger early-stage investing environment, and lead to better public policies to support angel investing and innovative startups. It just might refute a lot of assumptions about angel investors that are incorrect. (to read more click title above)
May 16, 2016 - Notes from the 2016 ACA Summit; by Craig Mullett, www.angelcapitalassociation.org/
Smart money
Kay Koplovitz (USA Network/ Springboard Enterprises)
April 2016 – A Snapshot of Pittsburgh’s technology investment landscape. Trends and highlights, 2011-2015, Innovation Works and EY.
Ernst & Young LLP and Innovation Works, Inc. are pleased to present our fourth annual review of investment trends and highlights for the Pittsburgh region’s technology sector. This report reviews the investment activity in our region from 2011 to 2015, analyzes the companies attracting capital and tracks the funding sources that support their growth — including venture capital fi rms (VCs), angel investors (angels), corporate/strategic investors, seed funds, accelerators, public offerings and other sources. (To read more click title above)
April 20, 2016 - New Study on Angel Investing Returns, Valuation Trends & Crowdfunding Rules to Highlight Angel Summit In Philadelphia May 9-11
Angel investors annually fund an estimated $24 billion in early-stage companies, but what kind of returns do they achieve? Are startups getting too expensive for seed-stage funding to be an acceptable risk? How will equity crowdfunding change the way capital is raised by startups? How can angels build more diversity into their community and investments? The Angel Capital Association (ACA), the world's leading professional association for angel investors, is providing answers to these questions and others at the 2016 ACA Summit – the preeminent annual gathering of angel investors.
Robert Wiltbank will present his latest comprehensive study of returns to angel investors, updating data from his 2007 study that demonstrated an average 27 percent internal rate of return. Wiltbank is professor of strategic management at Willamette University and lead research on angel investing for the Angel Resource Institute. (To read more click title above)
March 29, 2016 – What makes angel investors tick?; By Stephanie Baum, www.medcitynews.com
How do folks become angel investors? What career path led them to this role? And how old are they? These are the couple of questions in a survey by University of Pennsylvania Wharton Business School professor’s survey as part of a quest to provide a better understanding of who angel investors are and what motivates them.
The survey is part of a partnership between Wharton Entrepreneurship and the Angel Capital Association. Rev1 Ventures’ John Huston Fund for Angel Professionalism is bankrolling the survey. Active, accredited investors can participate confidentially in the benchmark study at TheAmericanAngel.org. Wharton Entrepreneurship will administer and analyze the data.
Marianne Hudson, executive director of ACA, said in a statement: “We believe this study will help identify characteristics of angel investors that have never before been understood…It is critical for entrepreneurs, economic development entities, private market makers, regulators and legislators to understand who angel investors are, in order to drive effective policies to ensure a robust angel investing marketplace and for startups to better access equity capital.” (To read more click title above)
March 28, 2016 – The Rise of Angel Investing; By Honathan Ortmans, www.kauffman.org
As I wrote last week, the annual Global Entrepreneurship Congress brought to light new insights for policymakers as to how the world can develop more robust ecosystems for our entrepreneurs and their investors and supporters. Over the next few weeks I plan to dive deeper into some of the learnings and outputs on specific topics. Today, we look at early stage investing.
Entrepreneurs have an earthly connection to angels. Most entrepreneurs initially finance their firms using their own savings but an investment by an angel investor who puts his or her own money directly into a startup, if done at the right time, makes a critical difference to the success of the firm. Policymakers know already how vital access to capital is to business survival rates but do they fully understand the importance of angel investors?
For millennia, wealthy people have provided startup capital to entrepreneurs. Professor Bill Wetzel of the University of New Hampshire (UNH) coined the term “angel” in 1978 to describe early-stage investors. As expert John May reports in his new book, Angels Without Borders, the organized, systematic form of angel investing only began about 20 years ago – and angel groups only began to emerge after 2000. Today, the U.S. has about 300,000 angels and about 400 active angel groups. (To read more click title above)
March 23, 2016 – The SEC could change the requirements for investing in startups, and that’s not good; By Evan Engstrom, Anna Duning, www.techcrunch.com
As strange as it may seem, only a small percentage of Americans can legally invest in most startups today. Under long-standing rules governing who qualifies as a so-called “accredited investor,” only quite wealthy individuals (those make at least $200,000 in annual income or have $1 million in assets, excluding their home) can buy shares in a fast-growing, privately held company.
This “accredited investor” definition is extremely important for the startup ecosystem, since the most common legal arrangement that startups use to raise funds limits participation almost exclusively to accredited investors. (To read more click title above)
March 17, 2016 – Who is the American Angel Investor? Survey Campaign to Answer the Question;
Precious little is known about the 200,000+ American angels who wield immense economic influence in the U.S. startup economy. In 2014 angels invested an estimated $24B in more than 73,000 startup deals, fueling the economic engine of our country. Today the Angel Capital Association (ACA) and Wharton Entrepreneurship announced a partnership to complete the first comprehensive study to understand who angel investors are, how they became angels, and what factors influence their investing activity. Active accredited investors can confidentially participate in this first-of-its-kind benchmark study at TheAmericanAngel.org, thanks to funding by non-profit Rev1 Ventures’ John Huston Fund for Angel Professionalism. (to read more click title above)
March 9, 2016 - 2015 Annual Halo Report
December 21, 2015 - SEC Staff Recommends Updates to Accredited Investor Definition; By Marianne Hudson, ACA Executive Director
December 18 was a very big day for angel investors. Not only did the SEC put out a staff report that recommends tweaks to the accredited investor definition, but Congress passed a big tax act that makes permanent the 100% exemption of capital gains. Here’s what you need to know in connected blog posts: Accredited Investor Definition – A mix of gifts and lumps of coal in our stockingsNot far from the US Capitol Building, the SEC quietly released a report from its staff on the Accredited Investor definition on the same day. As many angels will remember, the SEC is required to study the definition by Congress in the Dodd-Frank Act. Time will tell if this staff report fully addresses the requirement or if it informs future rulemaking by SEC Commissioners. (To read more click title above)
December 21, 2015 - Big News on Accredited Investor Definition and Tax Breaks – All in the Same Day; By Marianne Hudson, ACA ED
December 18 was a very big day for angel investors. Not only did the SEC put out a staff report that recommends tweaks to the accredited investor definition, but Congress passed a big tax act that makes permanent the 100% exemption of capital gains. Here’s what you need to know in connected blog posts: Tax Benefits - The holiday party starts early with a gift from Congress
The House and Senate passed the PATH Act (Protecting Americans from Tax Hikes) which included the Angel Capital Association’s top tax priority, extension of Section 1202 of the US Tax Code which allows a 100% exclusion of gains on Qualified Small Business Stock has been made permanent. Mark as favorite
Do rising venture capital investments signal rising economic dynamism ahead?
August 5, 2021 - ARI 2020 Halo Report
March 1, 2021 - 2020 PACT Philadelphia Venture Report
January 28, 2021 - Big4Bio Philadelphia - Life Science 2020 Year In Review
January 18, 2021 - Venture Capital Funding Report Q4 2020 - PwC and CB Insights' Q4 2020 MoneyTree report highlights the latest trends in venture capital funding globally.
January 2021 - ACA Angel Funders Report 2020 - Highlights
January 14, 2021 - Venture Capital’s Best Year Ever, by Amy Whyte, Investor Institutional
Big VC firms led the industry to new records in deal making, exits, and fundraising.
September 28, 2020 -Building Your Own AngelList: 4 Expert Tips on How to Network to Find Investors for Your New Business, www.entrepreneur.com - Having a brilliant product, team, and business model are important starting points in your entrepreneurial journey; but at some point, you’ll need to start raising funds to take the next step. Getting in front of the right investors requires time—perhaps more than you thought—and a dedicated search for the right backer. (To read more click title above)
August 28, 2020 - Fox Rothschild & CBRE Philadelphia Life Sciences Market
June 15, 2020 - 14-investors-have-urgent-tips-for-your-first-meeting
March 19, 2020 - PCI Ventures 2019 Spotlight
March 4, 2020 - SEC Proposes Rule Changes to Harmonize, Simplify and Improve the Exempt Offering Framework,
The Securities and Exchange Commission today announced that it has voted to propose a set of amendments that would harmonize, simplify, and improve the exempt offering framework to promote capital formation and expand investment opportunities while preserving and enhancing important investor protections.
Feb 18, 2020 - PACT 2019 Philadelphia Venture Report
August 1, 2019 - 2018 ARI HALO Report, by https://angelresourceinstitute.org
July 29, 2019 - ACA Angel Funders Report, by www.angelcapitalassociation.org
May 3, 2019 - Business starter Ben Franklin says state funding shortfall puts Pennsylvania growth at risk, by Anthony Salamone, www.mcall.com
Many in the Lehigh Valley might be unaware that Ben Franklin Technology Partners of Northeastern Pennsylvania has been launching businesses since Ronald Reagan was president. But they’re probably familiar with the innovative companies the nonprofit has nurtured.
A very short list includes Bethlehem-area companies OraSure Technologies and Rea.deeming Beauty Inc.; Ciclon Semiconductor Corp., which is now part of Texas Instruments at Ben Franklin’s TechVentures facility; and organic toothbrush-maker Radius Corp. in Kutztown. Once fledgling businesses in Ben Franklin’s incubator, they were aided by money, technical support or office space from the organization, growing into pillars of the Lehigh Valley economy. (To read more click title above)
April 29, 2019 - Angel Capital Association Announces Angel and Company Awards and New Investment Data at 2019 ACA Summit, by ACA
CHICAGO, April 29, 2019 /PRNewswire/ -- The Angel Capital Association (ACA), the world's leading professional association for angel investors, announced the winners of national awards at the 2019 ACA Summit taking place in Chicago. Winners include Kansas City's Marianne Hudson for the angel who has advanced the field of angel investing and Joylux, a Seattle startup, as the most innovative company funded by ACA members.
The 2018 Angel Funders Report, based on the ACA Data Analytics platform, provides insights on data from 68 angel groups across North America. Among the key insights were: 23% of funded companies had female CEOs, the median deal size was $1.2 million (compared to $1 million in 2017), the average pre-money valuation of deals is $6 million, more than half of investments were in the seed round but angels continued to invest in later rounds, and angel groups nearly triple their investment when they are on the company boards. A formal report will be published in May. (To read more click title above)
February 7, 2019 - Seed-stage capital raising: Why you should keep the deal simple, by Jason Rose, www.smartcompany.com
I was recently in discussion with a fintech about going in on their seed round. Investing at any point in a startup’s lifecycle is challenging, but it is especially nail-biting at the seed stage because so many questions about the startup remain unanswered.That’s why any sensible investor going into a seed round knows there is a very high chance they will lose their entire investment. It’s an all-or-nothing play.
It doesn’t matter how many previous exits the founders may have had, how large the startup’s total addressable market may be or how impressive their technology is, seed investing always carries with it a very high chance of a total capital loss -- even with detailed due diligence.
(To read more click title above)
January 9, 2019 - Study: Ben Franklin Grew Pa.'s Economy by $4.1 Billion, Created 11,407 Jobs from 2012 to 2016,
January 8, 2019 - The Economic Impact of the Ben Franklin Technology Partners, 5th Edition, A study by the Pennsylvania Economy League
December 10, 2018 - A Philadelphia digital health accelerator shares how it created a blind selection process to boost diversity, by Stephanie Baum, https://medcitynews.com
The University City Science Center's DHA program created a blind initial application process that focuses on the founders’ ability to communicate their idea with the goal of removing biases associated with how screeners perceive the founding team. (to read more click title above)
December 6, 2018 - Do rising venture capital investments signal rising economic dynamism ahead?, by Brett Swanson, www.aei.org
Despite the recent drop in Silicon Valley stock prices, there is some good news beneath the surface of technology finance. In their most recent update, PitchBook and the National Venture Capital Association showed that US venture investments for the third quarter totaled nearly $28 billion. For the year, it looks like venture investments will top $100 billion, exceeding the previous record by more than $20 billion. (to read more click title above)
December 6, 2018 - Where Angels Don't Fear to Tread: Tips for Aspiring Early-Stage Investors, by Gosia Glinska, www.newswise.com
Like wealthy New York “angels” who funded Broadway productions a century ago, today’s angel investors have a healthy appetite for risk, providing personal capital to fledgling companies in exchange for equity. While angels don’t get the same attention as venture capitalists (VCs), who tend to focus on later-stage investment rounds, they do play a key role in the financial ecosystem for innovative, high-growth startups.
After friends-and-family financing, angel investors are the largest source of outside funding for nascent ventures, filling a critical gap left by VCs. In 2017, more than 280,000 U.S. angels funneled $23.9 billion into 61,560 startups.[i] And, according to a recent survey of U.S. angel groups, the average check written by an angel was $35,255, with a median of $25,000.[ii] (to read more click title above)
December 5, 2018 - How can angel investors support animal health innovation?, by Amanda Curtis, , https://animalpharm.agribusinessintelligence.informa.com
With a growing population putting demands on farmers and producers to create sustainable protein, and the transformation of pets from companion animals to family members, the animal health industry is seeking innovation. Consultant Amanda Curtis explains how angel investment could fuel this much-needed innovation. (to read more click title above)
September 25, 2018 - How Angel Investors And Angel Groups Work. by Alejandro Cremades, www.forbes.com
How do angel investors and angel groups work? Where do you find them as an entrepreneur?
Angel investing has not only become trendy and highly profitable, it has emerged into being a powerful source of fuel for the national economy, jobs, and new innovation. For entrepreneurs, angels have become a primary source of funding, and for many startups, a vital part of their existence. How do angels and groups work? How is this type of fundraising different? How can founders connect with this money? (to read more click title above)
August 10, 2018 - ACA Angel Funders Report - Pilot
August 10, 2018 - Angel Investors Inject Nearly $39 Million into New Jersey Innovation Ecosystem in First Half of 2018, www.njeda.com
August 5, 2018 - 50 Angel Investors Based On Investment Volume And Successful Exits, by Alejandro Cremades, www.forbes.com
Who are the leading angel investors startup entrepreneurs should be pitching right now? How do you connect with them?
Effective fundraising for startups isn’t about how many people and firms you can blast your opportunity out to. It’s about getting in front of the right investors, with a strong pitch deck. A recent DocSend survey shows successfully funded startups contacted an average of just 58 investors, made 40 meetings, and took just 12.5 weeks to close their funding round.
Once you know who to pitch, it’s all about perfecting the pitch deck to close your next round of funding. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash. Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400M (see it here)
As a follow up to this piece, and if you are looking for institutional investors, in this Forbes report you will be able to find the 10 Venture Capital Investors to be pitching based on recent activity. (To read more click title above)
August 2, 2015 - How Venture Capital Works, by Alejandro Cremades, www.forbes.com
Venture capital firms are without a doubt the muscle behind innovation as they support the company they may invest in, from the early stages, all the way to IPO — especially those with larger funds that have billions of dollars under management.
Defining the Roles at a VC...As described in my book, The Art of Startup Fundraising, VC firms have different types of individuals working at the firm. (to read more click title above)
June 6, 2018 - How Women Angels Are Good For Innovation And The Economy, by Geri Stengel, www.forbes.com
Angel investors — wealthy individuals — give seed money to startups with the potential to scale. They are also often involved in providing advice, and making introductions to other investors, customers and talent, and sit on the boards of high-growth startups. Only a tiny percentage of companies are funded by angels — less than 1%. Research finds that startups that have angel backing are more likely to survive. Angel-backed firms also hire more employees and are more likely to have a successful exit. The economy needs angels and it needs angels who understand underinvested markets. (To read more click title above)
May 21, 2018 - VC valuation trends in 7 charts, by Dana Olsen, www.pitchbook.com
Venture valuations are continuing to increase across all stages, according to our 1Q 2018 VC Valuations Report. The recently released analysis puts a spotlight on valuations in the US across all stages, along with detailed information on step-up valuations, exits, deal terms and more. Below is a roundup of charts with highlights from the report, from the median time between rounds to the drop in the number of deals with participation rights. (To read more click title above)
May 7, 2018 - Delaware Bio Applauds Passage of Angel Investor Tax Credit Legislation, www.businesswire.com
The Delaware BioScience Association (Delaware Bio) applauds the Delaware General Assembly’s passage of the Job Creation and Innovation Act for Small Technology Companies (HB 170). This establishes incentive for angel investors to provide crucial capital to early-stage companies engaged in innovative scientific or high-tech work. (To read more click title above)
For additional information please go to http://delawarebio.org
May 2, 2018 - Who is the American Angel?, Source - Laura Huang, Andy Wu, and Angel Capital Association (Marianne Hudson, Elaine Bolle)
April 26, 2018 - Angel deals see big increase in female firms and greater geographic diversity, according to HALO Report, By Robert Ksiazkiewicz, https://ssti.org
In 2017, 25.7 percent of all angel capital group deals went to a founding team with at least one female founder, up from 17.0 percent in 2016, according to the Angel Resource Institute’s (ARI) HALO Report: 2017. The report also found a sizeable increase in the number of deals made for companies that included at least one minority female founder – 5.5 percent in 2017 (1.0 percent in 2016).
The HALO Report: 2017 is based upon data collected from angel groups as well as individual angel groups across the country. To collect the data, ARI uses both survey responses and PitchBook online resources. In total, the study’s database includes 3,617 deals made by angel groups. ARI, however, excluded deals with first-time investment rounds greater than $4 million to avoid skewing the data. ARI also excluded deals made by individual angel investors outside of groups in 2017 – they report that 1,499 such individual angel investor deals were made. (To read more click title above)
April 20, 2018 - 2017 HALO Report Released Analyzing Angel Investment Activities in U.S.
January 8, 2018 - Our Favorite Articles About and By ACA Members in 2017, By: Marianne Hudson, ACA Executive Director
November 28, 2017 - The American Angel Campaign (full study)
November 13, 2017 - Angel Group Leader Compensation Results from Fall 2017 Survey of ACA Members, By Christopher Mirabile
November 6, 2017 - 2017 1H ARI Halo Report
November 2, 2017 - PACT 2017 Philadelphia Venture Report -
October 6, 2017 - Eight essential questions for startup founders looking to raise venture capital by Martin Kovas, www.smartcompany.com
Startup founders seeking to raise venture capital should expect to face tough questions, and lack of preparedness may see investors choosing to focus their attention elsewhere.The questions will likely come thick and fast, and it is best to have all bases covered when fronting investors. But what are some of the more common questions that startup founders can expect to face? (To read more click title above)
September 29, 2017 - Seeking capital? How to clear a sophisticated investor’s bar by Andrew Walsh, https://westfaironline.com
An entrepreneur whose business plan includes seeking growth capital for a growing business — perhaps after initial self-funding or obtaining seed capital from family and friends — should be aware of the business and legal attributes an experienced “sophisticated investor” will look for. Regardless of whether the investor is an angel, an angel group, a venture capital firm or a family office, the sophisticated investor will have evaluated hundreds of opportunities, achieved liquidity in some, but also written off others as failures. This investor knows the key markers of a business equipped to grow sustainably. (To read more click title above)
September 21, 2017 - More women are becoming angel investors, and many want to help make the world a better place, by Carrie Ghose, www.bizjournals.com
Women are rapidly changing the face of startup investing at the earliest stages, and soon could be changing its impact.
There is not yet parity among angel investors, but women are gaining: 22 percent were female in a survey this year of Angel Capital Association members. Women made up 30 percent of those investing for two years or less, compared with 18 percent of veteran investors.
"Growth in angel investing is coming with women," said Marianne Hudson, the trade group's executive director.
She outlined the survey results for the first time at the annual VentureOhio dinner this week in Columbus, a statewide annual conference for statewide technology entrepreneurs and investors. Nearly 1,700 of the group's 13,000 members participated.
More telling, 51 percent of female angels say the gender of a startup's founder is important in making an investment decision, compared with 6 percent of male investors.
"A lot of women care about investing in women-led companies," Hudson said.
Women also were twice as likely to say they cared about a startup’s social impact. (To read more click title above)
September 16, 2017 - 10 Steps To Investing Successfully In New Ventures, by Mark Zwilling, http://blog.startupprofessionals.com/
Investing in entrepreneurs and startups is a fun but different world from investing in conventional stocks, bonds, and commodities. First of all, it’s more of an investment in people than in a business, since the startup is usually an idea barely half-baked when they need your money. Secondly, the risk is very high, since as many as 90% of startups fail in the first five years.
On the plus side, it’s an opportunity to get in early and really help make things happen that will change an industry, or change the world. It’s an opportunity for that “big bang” return of 10X to 100 times your initial investment, like early investors in Google, Microsoft, and Apple. Finally, it’s an opportunity to “give back” what you have learned in your own career for the next generation. (To read more click title above)
August 25, 2017 - Here’s a list of 45 women investors in Philly, by Roberto Torres, https://technical.ly/philly/
Earlier this year, as the annual Angel Venture Fair was wrapping up,MilkCrate CEO Morgan Berman dropped some truth to Philly.comreporter Diane Mastrull:
“It is a little bit awkward for me to just go up to all these middle-aged men in sports jackets in the Union League.”
A diversity-challenged angel and venture capital scene isn’t just a Philly issue. The problem also goes beyond just gender. And as our sister site Generocity has reported, the lack of diversity is also found in the impact investment scene.
That’s why when a reader and community member — who wished not to be credited — sent us a list of 30+ women investors, we knew we had to publish it. Here’s the list, with additional contributions from Archna Sahay, Red and Blue Ventures’ Brett Topche, SRI Capital’s Doc Parghi and Safeguard’s Heather Hunter. (To read more click title above)
May 11, 2017 - Angel investors are the first stop in a new era of drug development, by Elana Gordon, www.newsworks.org
Once a month, 40 or so executive types break from their regular routines to meet up for the day. There's schmoozing, a catered lunch, and of course presentations. Lots of them."We get 300 to 400 applications a year, and screen it down to about 200 applications," said Ellen Weber, director of the group. They further whittle down the stack to a select few, who then make it to this in-person round, or rather, the monthly get together of Robin Hood Ventures in Philadelphia.
This is where aspiring start-ups make their direct ask for money from members of Robin Hood. It's an angel group, made up of independent certified investors (though mostly men, they're business-types, not men in tights).
In many ways, spaces like this have become a critical entry point for those in the biotech and pharma world, looking to transform an idea into an actual therapy or treatment. (To read more click title above)
May 4, 2017 - Catherine Mott Honored with Hans Severiens Award, by Marianne Hudson, ACA Executive Director, www.angelcapitalassociation.org
It was with great enthusiasm that the Angel Capital Association honored Catherine Mott with the prestigious Hans Severiens Award at last week’s 2017 ACA Summit. The Hans Severiens Award is presented annually to recognize one individual’s work in advancing the field of angel investing. Catherine is a great representative of the spirit of the award, with impacts ranging from developing and educating angel best practices to regulatory policy work to advocating for startups and helping expand the diversity of the angel investing community. (To read more click title above)
April 31, 2017 - 2016 Halo Report - Annual Report on Angel Investments - www.angelresourceinstitute.org
April 12, 2017 - 2017 Angel Capital Association Summit: Angel Investors Drive the Success of American Startups and Economic Growth; Angel Capital Association
The Angel Capital Association (ACA), the world's largest professional organization for accredited investors, will host investors from around the world at its 2017 ACA Summit, April 26-28 at the San Francisco Marriott Marquis. ACA Summit speakers will address topics impacting individual investors and investment strategies, including building diversity among entrepreneurs, Trump Administration impact on healthcare investing, and growth in new sectors such as blockchain and cannabis startups.American angel investors pumped an estimated $24.6 billion into more than 70,000 startups across the country in 2015. Many of these companies are innovative, high-growth firms that create the most net new jobs in our economy and distribute new products and services that make a difference in people's lives. ACA will celebrate great investments and 60 successful exits for ACA members and their portfolio companies at the ACA Summit, demonstrating how "Angels Drive the Success of Great Startups and Economic Growth." (to read more click title above)
April 12, 2017 - Invent Penn State’s Fund For Innovation helps start seven new ventures, by Nena Ellis Koschny, http://news.psu.edu
A little less than two years after the launch of the Fund for Innovation, Invent Penn State has backed nearly 50 emerging Penn State technologies and has provided startup funding to promising new ventures that were born out of the program.“Although many universities have commercialization programs,” said Vice President for Research Neil Sharkey, “the speed and volume of success that Penn State has experienced recently is unique.” (to read more click title above)
March 31, 2017 - The Best Routes to Angel Liquidity, By Marianne Hudson, www.forbes.com
The biggest question for angel investors in the last decade is: “How do I get a return on my investment?” Without financial returns, most angels aren’t able to keep plowing money into new startups.
So, what does an angel need to do to get their money back, or better yet, make great returns? Here is the best advice I’ve gotten on getting to liquidity or exits from some of my favorite angels and experts over the years. Interestingly, the advice covers before, during, and after you invest.
Align with the entrepreneur on exit plans by asking good questions when you’re first evaluating a company
John O. Huston, a founding member of the Angel Capital Association, suggests that great exits start with three entrance questions, including “Is there exit goal congruence between the investors and the entrepreneur?”
To determine if there is exit goal congruence with entrepreneurs you are considering investing in, Huston suggests sharing data on recent exits in their industry and region. The data discussion opens eyes and builds understanding, as many entrepreneurs plan on an unusually large exit such as Facebook’s $19 billion acquisition of WhatsApp but a $50 million to $200 million is more likely. (to read more click title above)
March 16, 2017 - CY 2016: Ben Franklin Approved $10.6 Million in 52 Companies, www.sep.benfranklin.org
March 14, 2017 - Pittsburgh tech startups continue to attract investors, by Aaron Aupperlee, triblive.com/local/allegheny/
Pittsburgh technology startups bucked a national trend by attracting more venture capital investment in 2016. Funding for Pittsburgh-area companies from venture capital firms increased 8 percent in 2016, jumping from $217.4 million in 2015 to $235.1 million, according to a report by Innovation Works and Ernst & Young released Tuesday. Nationally, venture financing dropped 32 percent in 2016, falling from $77.3 billion in 2015 to $52.3 billion. “In a year when venture capital dropped significantly across the United States, Pittsburgh was up in every category,” said Rich Lunak, CEO of Innovation Works.The report found that in 2016: Total investment in Pittsburgh-area technology companies was up nearly 35 percent to $376 million; Investment from venture capital firms rose 8 percent to $235.1 million; The number of deals increased from 35 in 2015 to 39; Seven companies raised $15 million or more; only two did in 2015; Ten companies were acquired by larger firms in deals that topped $275 million. (to read more click title above)
March 7, 2017 - BusinessWomen First Winner: Catherine Mott, by Richard Cerilli, www.bizjournals.com/pittsburgh
When the Dodd-Frank Wall Street Reform and Consumer Protection Act was under review, Catherine Mott stepped up to make sure her industry wasn’t adversely affected. As a member of the public policy committee of the Angel Capital Association, she helped affect changes in proposed regulations. “One of the provisions would have changed the definition of an accredited investor for companies,” she said. “It would have eliminated one-third of the activity in our industry.” To view a slideshow of the 2017 BusinessWomen First winners, click here. Mott started her company, BlueTree Capital Group, long before angel investing companies became ubiquitous. “At that time (2003), there were about 100 angel groups around the country,” she said. “Now there’s at least 500.” (to read more click title above)
February 27, 2017 - What Angels Need To Do To Get The New, Best Deals, By Marianne Hudson, www.forbes.com
The holy grail of angel investing is finding the best entrepreneurs and companies to invest in, and then to support those companies and protect yourself after you invest. I recently saw a piece with insights on a new trend behind the formation of some of the best startups – the kinds of companies that draw many investors and require quick action to ensure you get into the deal. What do angels need to do to make sure they have a chance to invest in these startups? (to read more click title above)
February 1, 2017 - $6.3B in Life Sciences investments are woven into economic fabric of the region, www.sep.benfranklin.org
As previewed at the IMPACT 2016 Capital Conference, the Greater Philadelphia Life Sciences Report details investments in Life Sciences companies from 2011 through the first half of 2016. This study explores our region's Life Sciences footprint and investment activity over the last five years and details the key findings that characterize the sector’s evolution in the region. It was jointly created by Ben Franklin, BioAdvance, CEO Council for Growth, the Chamber of Commerce for Greater Philadelphia, EY, Life Sciences PA, PACT, Philadelphia Works, Select Greater Philadelphia Council, and the University City Science Center, in collaboration with IHS Markit. According to the report, the Greater Philadelphia Region (GPR) is positioned to lead the next stage of disruption within the spectrum of Life Sciences disciplines, thanks to its world-renowned research institutions, top biomedical programs, and a healthy ecosystem of small and large enterprises and investment activity. (To read more click title above)
January 30, 2017 - 25 Must Reads for Angels From 2016, By: Marianne Hudson, ACA Executive Director, Originally appeared on Forbes.com
On my mission to get smarter and smarter about angel investing, I think it’s important to read as much as I can from leading investors and experts in entrepreneurship. There were some really great articles last year that made a difference to my own investing and thinking about trends and policies. Here are 25 top articles that caught my attention in 2016. (to read more click title above)
January 27, 2017 - Reg A review: Mini-IPO, or mini-IP, oh? By Grant Harvey, crowdfunding360.com
This week, Scott Purcell of FundAmerica provided his take on a report released by the SEC on Regulation A. Tracking all campaigns and funds raised through Q3 of last year, the report had a lot of insight, especially for those who’ve drank enough Kool-Aid to consider launching what many are calling a “mini IPO” in place of a real IPO.After reading through Purcell’s highlights and some other choice reading materials from last week, those of us at Crowdfunding 360 thought it would be worth putting together our own Reg A review to analyze what it would take to kick off one of these deals and make it worth an issuer’s time and expense.
First, a brief review of the SEC’s findings. Through Q3, 147 offering statements were filed, of which 81 were qualified by the SEC. 49 of those were Tier 2, and 32 were Tier 1. Personally, I’m surprised anyone would bother with a Tier 1 due to Blue Sky limitations and the $20 million cap. Out of these filings, there was an $18 million average max raise, 87% raised equity while 13% raised debt, and your typical Reg A issuer had no assets, revenue, or net income to speak of. Pretty straight forward, no real surprises.
The bigger surprise to Purcell was the SEC’s finding of an average 121 days between initial filing to qualification. This is actually in line with what I saw during my time working on Reg A marketing campaigns, where there would be a hurry to launch the testing the waters campaign as if it were the real deal, only to wait months and months to go live and subsequently, losing all momentum from that initial push. (to read more click title above)
January 25, 2017 - 3 charts that show the effect of venture fundraising on founder ownership, by Adley Bowden, http://pitchbook.com
Raising money inevitably dilutes the stakes of company investors, employees and founders, but the idea is that a growing valuation results in a net positive, as it increases the value of everyone’s now-smaller slice of the pie. That's how we end up with billionaire founders like Bill Gates, Jeff Bezos, Mark Zuckerberg, etc.
So what does that dilution actually look like for founders/founding teams as they move through their capital raises? How much should founders expect to own after raising over $50 million? Hint: It's not a lot. To get cold hard data, we turned to the results of J.Thelander Consulting’s private company option pool and ownership survey, which includes responses from 380 private venture-backed companies in the US.
One key thing to know is that when it comes to capital requirements and valuation multiples, no two industries are the same. As a result, founders see different levels of dilution depending on their industry. So instead of showing all companies lumped together, we had J.Thelander Consulting break it out by biotech, medical devices and tech. (To read more click title above)
January 13, 2017 - 25 Must-Reads For Angel Investors, By Marianne Hudson, www.forbes.com
On my mission to get smarter and smarter about angel investing, I think it’s important to read as much as I can from leading investors and experts in entrepreneurship. There were some really great articles last year that made a difference to my own investing and thinking about trends and policies. Here are 25 top articles that caught my attention in 2016. I think they’re worth another read, or a first read in case you missed them. (to read more click title above)
January 6, 2017 - 3 Types of Capital – An Overview for Entrepreneurs, By Erica Drake, CEO of Maverick Entrepreneurs
To be completely blunt, the battle to find funding is so competitive that most likely you’re going to take whatever funding you can get to start (and that’s all right). Remember you can always exchange expensive money for cheaper money later. The war isn’t over until you cash out with an exit strategy and there’s a long way to go before you need to make that decision.To tell an entrepreneur that a prospective investor may not be ideal is like telling a starving man that the food doesn’t taste very good. As a fellow entrepreneur, I can tell you that the passion and desire to find funding — any funding — often outweighs a logical business decision. If you must take expensive funding from a less than desirable source, be sure to structure your deal using a strategic long-term plan, specific milestones, strong corporate bylaws and a predetermined exit strategy for this funding round.
Remember, this is a long, grueling war and more die than live. So it’s almost arrogant and naive to think your company is so unique that cheap money will fall into your lap. Hopefully, it does. However, unless you have a rich uncle, personal trust fund or your own wealth don’t count on it. So, be open to ALL options right now. (To read more click title above)
December 31, 2016 - The American Angel Campaign,
In 2014 200,000+ American angels invested an estimated $24B in more than 73,000 startup deals. Although angels have powerful impact, little else is known about these high-net worth individuals. This first-ever study will define the American Angel today. Take the survey now. Help us unveil the American Angel today, uncovering emerging trends and perhaps changing age-old, but wrong, assumptions.
Jointly launched by the Angel Capital Association and Wharton Entrepreneurship, this ground-breaking campaign will benchmark the mix of angel investors across America by age, gender, ethnicity and pinpoint any commonalities such as the path that got them there or how they discover and fund early-stage companies.
December 22, 2016 - What the Heck Are Warrants? Answers To Questions Some Angels Are Afraid To Ask, By Marianne Hudson, www.forbes.com
Don’t you just hate it when technical jargon is used and isn’t explained? The term “warrant” is used all the time in angel discussions, but when I talked with several newer angels recently, almost none understood what a warrant really is and they didn’t want to ask for fear of sounding stupid. Their thinking is along the lines of “if I’ve been an angel for a year and heard this term again and again, I must be an idiot if I don’t understand the basics.” I’m here to say that isn’t true.Here are some FTQs (Frequently Thought, but rarely asked, Questions) about warrants:
What is a warrant? Like stock options for company employees, stock warrants are contractual rights for investors or other key third parties to buy stock in the company at a preset price for a set time period . In the case of early stage deals, they are offered as an incentive to invest – a mechanism that will allow an investor to increase their position in the future for today’s price. Early stage companies also use them in connection with the establishment of a credit facility – some lenders will ask for warrants as part of the lending deal. (To read more click title above)
December 15, 2016 - Eleven More Central PA Companies Just Received Ben Franklin Funding!, cnp.benfranklin.org
This week, at our December 2016 Board of Director’s meeting, eleven company projects were approved to receive funding and business support services from the program. Companies included - FairTech Labs, LLC, Atoptix, LLC, CRIMEWATCH Technologies, Inc., Sensor Networks, Inc., Adiaon, LLC, Persea Naturals, LLC, SIG Medical Corporation, PressBox Media, X Materials Processing, LLC, SAY Plastics, Reflexion Interactive Technologies. (to read more click title above)
November 17, 2016 - Startup Valuations -- There Is No Universal Truth, By Marianne Hudson, www.forbes.com
585,000: the number of links Google provides if you research “startup valuations.” If you dig in you will discover calculators, techniques, methodologies and many opinions. What you won’t find is one approach that works every time. That’s why hearing valuation insights from top angels is incredibly useful. These views help separate the wheat from the chafe, and help us shape our own personalized valuation process.
To help you refine an individualized approach to determining the correct valuation for startups you invest in, I tapped the sage advice from a handful of professional angel investors from across the country. All Angel Capital Association (ACA) members, these angels and others connect to share investment ideas, strategies and deal flow. The following views offer an excellent place to start. (To read more click title above)
November 1, 2016 - 12 Angel Investor Tips For First-Time Entrepreneurs, By Christopher Mirabile, Adapted from a piece that originally appeared on The Seraf Compass
I was speaking with Jim Connor of Sand Hill Angels in Silicon Valley and Catherine Mott of BlueTree Allied Angels in Pittsburgh and the subject of fundraising advice for first time entrepreneurs came up. I took the opportunity to jot down answers to 12 questions every fundraising entrepreneur should think through. Here’s an edited transcript of the discussion. (To read more click title above)
October 11, 2016 - Estate Planning For Angel Investors: How To Maximize Investment Returns For Your Family And Future, Marianne Hudson, www.forbes.com
Many angels think about building great returns from our investments, but how many have thought through the strategies and techniques to ensure most of those returns actually get to our children, grandchildren and preferred charities? So many angels have goals to share our wealth, and a recent event,Celebrating Women Angels opened my eyes to some helpful ways to think about estate planning for angel investments to meet those goals. In addition, estate planning can be used to share the knowledge and joy of angel investing with your children.
At this event, I met estate planning experts Adrienne Penta and Anne Warren, both of Brown Brothers Harriman. Adrienne and Anne have great tips for how to marry estate planning with angel investing. Anne explains, “Many think estate planning is about what happens to your assets when you die, but some of the most interesting and fulfilling planning can, and should, happen during your life.”
Including -
- Spread gifts over time and during your life.
- Protect angel investments in trusts for future generations.
- Use angel investing as a wealth primer for adult children.
- Use donor advised funds or direct gifts for philanthropic giving.
- Keep careful records of your angel investments.
- Talk with your advisors.
September 8, 2016 - 8 Steps To Becoming An Angel Investor, Marianne Hudson, www.forbes.com
If you’ve acquired some wealth in your life, you may have heard the buzz around angel investing and considered the idea of being an angel investor. Not only is it a blast to help innovative entrepreneurs, it also offers a chance to make superior financial returns. Even so, perhaps directly investing in and mentoring startups still sounds scary. You may wonder: How do people really get started as angels? And how do you know it is right for you? Looking back at a decade of angel investing at the Angel Capital Association, I see eight main steps to successfully getting started in angel investing (and most aren’t scary at all).
- Make sure you meet accredited investor standards –
- Understand the risks of investing in startups –
- Educate yourself –
- Ask experienced angels for advice –
- Join an angel group or angel platform –
- Develop an initial investing strategy –
- Actively participate in Q&As–
- When ready, write that first check –
August 3, 2016 - Pa. regulators issue advice on equity crowdfunding; Tim Stuhldeher, http://lancasteronline.com/
Interested in raising money for your small business through equity crowdfunding? The Pennsylvania Department of Banking and Securities has some advice for you. The department has just issued a two-page primer (PDF) on the new fundraising method, which became legal nationwide this spring. It's posted in the "Entrepreneur Education" section of the department's website, which offers in-depth information on various ways of raising capital. Equity crowdfunding allows ordinary people to buy shares in startup firms, with the prospect of earning returns if the company succeeds. Previously, only well-to-do "qualified investors" could do so. It's distinct from ordinary crowdfunding, in which people donate to a cause or project, sometimes in return for a gift or a product. (to read more please click title above)
July 27, 2016 - BioAdvance investments hit $2.9M in fiscal 2016, by John George, www.bizjournals.com/philadelphia
BioAdvance, the operator of a $50 million early stage life sciences fund that work with health-care entrepreneurs in the mid-Atlantic region, invested $2.9 million in companies and technologies targeting human health during fiscal 2016The investments, according to a report released late Tuesday by BioAdvance, included nine new companies and technologies plus six follow-on investments of exiting portfolio companies. (to read more please click title above)
July 21, 2016 - The Smart Tax Question - Invest In LLC Or C Corp Startups?; by Marianne Hudson, www.forbes.com/
Angels have many factors to consider when reviewing investment opportunities. Here’s another one that not many angels think about: which type of startup entity is better for your taxes? Should you insist on a C Corporation startup, with the potential for the Qualified Small Business Stock(QSBS) perk of no federal tax on your investment gains? Or, should you hedge your bets and invest in a startup formed as a Limited Liability Company (LLC), which offers more flexibility, ensures you pay only a single tax, and also is the structure that many acquirers prefer?I consulted a tax expert who has advised angel investors through this decision.Jeffrey Kelson, Tax Partner at EisnerAmper LLP, says, “Whatever you do, don’t go in with blinders on – you have to be educated.” (To read more click title above)
June 29, 2016 - Angel Investors Maintain Diverse Portfolios, with Median Check Size of $25,000, According to Early Results of "The American Angel" Campaign; PRNewswire, www.angelcapitalassociation.com
Angel investors – accredited individuals who collectively support the American startup industry with some $24 billion of capital per year – maintain diversified portfolios that represent roughly 5 percent of total held assets, with median investments of $25,000 per deal. Today, the Angel Capital Association (ACA) andWharton Entrepreneurship at the University of Pennsylvania released these and other early insights from the ongoing "The American Angel" survey, which is designed to provide the deepest research to date into the characteristics of angel investors. The survey is open for more angels to participate.Additional preliminary research findings to date:
- Angels invest in nearly 16 companies over their portfolio lifetime.
- Angels typically make additional (follow-on) investments in companies, with a median of three follow-on deals over time.
- Angels financed a median of two companies each in 2015.
- The longer angels invest, the more checks they write and the larger their portfolios. Angels who started investing in the 1970s and 1980s have written on average 45.6 checks, compared to 4.4 checks written by individuals who started angel investing in 2014 or later.
- Angel investors remain positive on the early-stage market: 27 percent indicate they will increase angel investments this year, 53 percent expect to maintain their level of investment, and only 20 percent expect to decrease.
- While the majority of angel investors are men more than 20 percent of respondents to date are women.
June 21, 2016 - Angel Syndication: Strategies To Engage Investors Quickly - Effective angel syndication is all about speed and momentum, plus a dash of scarcity. CHRISTOPHER MIRABILE; www.inc.com/
Filling out your round through angel syndication is something entrepreneurs need to be savvy about. Having a basic plan and strategy in place for approaching the syndication process is fundamental. However, the key success factors are engagement and speed. It boils down to whether or not you can engage investors enough to start writing checks, and doing this as quickly as possible so that you can get back to your real job - running the business. (To read more click title above)
June 14, 2016 - 10 reasons for having an advisory board; by Marc Kramer, www.bizjournals.com/kansascity
Entrepreneurs focus a lot of attention, and rightfully so, on building the best product or service followed by attracting capital and recruiting great sales/marketing people. They spend a fair amount of time selecting an accountant and attorney, which are equally critical to the success of the organization.
One area that a lot of entrepreneurs overlook or put low on the priority list is putting together an advisory board. (to read more click title above).
May 31, 2016 - How Do You Compare to Other Angel Investors?; by Marianne Hudson, ACA Executive Director, www.angelcapitalassociation.org/
Ever wonder how your investment activity and background compares to other angels in the US? Take The American Angel survey to put in your information and get early access to detailed reports to learn more.
ACA is partnering with Wharton Entrepreneurship to develop the first ever large dataset of US angel investors to understand who angels are demographically, how they became angel investors, how angels make decisions, and what level and type of investment activity they have. The project should benefit angels as an asset class as it brings more visibility to angels, supports a stronger early-stage investing environment, and lead to better public policies to support angel investing and innovative startups. It just might refute a lot of assumptions about angel investors that are incorrect. (to read more click title above)
May 16, 2016 - Notes from the 2016 ACA Summit; by Craig Mullett, www.angelcapitalassociation.org/
Smart money
Kay Koplovitz (USA Network/ Springboard Enterprises)
- Be open to serendipitous moments where entrepreneurial solutions may be uncovered
- Angels need to network where there are innovation pipelines to stay close to cutting edge startups
- Plan how your capital will be able to move startups "up the escalator" to the next capital raise and ultimately to exit
- Predicting winners needs to be combined with proactively making winners through post-deal interaction - board advisors with industry expertise
- Startup team needs combination of selling dynamism & technical product expertise
- Engaging strategic exit partners early is a predictor of success (avoid exclusivity to keep multiple bidders alive)
April 2016 – A Snapshot of Pittsburgh’s technology investment landscape. Trends and highlights, 2011-2015, Innovation Works and EY.
Ernst & Young LLP and Innovation Works, Inc. are pleased to present our fourth annual review of investment trends and highlights for the Pittsburgh region’s technology sector. This report reviews the investment activity in our region from 2011 to 2015, analyzes the companies attracting capital and tracks the funding sources that support their growth — including venture capital fi rms (VCs), angel investors (angels), corporate/strategic investors, seed funds, accelerators, public offerings and other sources. (To read more click title above)
April 20, 2016 - New Study on Angel Investing Returns, Valuation Trends & Crowdfunding Rules to Highlight Angel Summit In Philadelphia May 9-11
Angel investors annually fund an estimated $24 billion in early-stage companies, but what kind of returns do they achieve? Are startups getting too expensive for seed-stage funding to be an acceptable risk? How will equity crowdfunding change the way capital is raised by startups? How can angels build more diversity into their community and investments? The Angel Capital Association (ACA), the world's leading professional association for angel investors, is providing answers to these questions and others at the 2016 ACA Summit – the preeminent annual gathering of angel investors.
Robert Wiltbank will present his latest comprehensive study of returns to angel investors, updating data from his 2007 study that demonstrated an average 27 percent internal rate of return. Wiltbank is professor of strategic management at Willamette University and lead research on angel investing for the Angel Resource Institute. (To read more click title above)
March 29, 2016 – What makes angel investors tick?; By Stephanie Baum, www.medcitynews.com
How do folks become angel investors? What career path led them to this role? And how old are they? These are the couple of questions in a survey by University of Pennsylvania Wharton Business School professor’s survey as part of a quest to provide a better understanding of who angel investors are and what motivates them.
The survey is part of a partnership between Wharton Entrepreneurship and the Angel Capital Association. Rev1 Ventures’ John Huston Fund for Angel Professionalism is bankrolling the survey. Active, accredited investors can participate confidentially in the benchmark study at TheAmericanAngel.org. Wharton Entrepreneurship will administer and analyze the data.
Marianne Hudson, executive director of ACA, said in a statement: “We believe this study will help identify characteristics of angel investors that have never before been understood…It is critical for entrepreneurs, economic development entities, private market makers, regulators and legislators to understand who angel investors are, in order to drive effective policies to ensure a robust angel investing marketplace and for startups to better access equity capital.” (To read more click title above)
March 28, 2016 – The Rise of Angel Investing; By Honathan Ortmans, www.kauffman.org
As I wrote last week, the annual Global Entrepreneurship Congress brought to light new insights for policymakers as to how the world can develop more robust ecosystems for our entrepreneurs and their investors and supporters. Over the next few weeks I plan to dive deeper into some of the learnings and outputs on specific topics. Today, we look at early stage investing.
Entrepreneurs have an earthly connection to angels. Most entrepreneurs initially finance their firms using their own savings but an investment by an angel investor who puts his or her own money directly into a startup, if done at the right time, makes a critical difference to the success of the firm. Policymakers know already how vital access to capital is to business survival rates but do they fully understand the importance of angel investors?
For millennia, wealthy people have provided startup capital to entrepreneurs. Professor Bill Wetzel of the University of New Hampshire (UNH) coined the term “angel” in 1978 to describe early-stage investors. As expert John May reports in his new book, Angels Without Borders, the organized, systematic form of angel investing only began about 20 years ago – and angel groups only began to emerge after 2000. Today, the U.S. has about 300,000 angels and about 400 active angel groups. (To read more click title above)
March 23, 2016 – The SEC could change the requirements for investing in startups, and that’s not good; By Evan Engstrom, Anna Duning, www.techcrunch.com
As strange as it may seem, only a small percentage of Americans can legally invest in most startups today. Under long-standing rules governing who qualifies as a so-called “accredited investor,” only quite wealthy individuals (those make at least $200,000 in annual income or have $1 million in assets, excluding their home) can buy shares in a fast-growing, privately held company.
This “accredited investor” definition is extremely important for the startup ecosystem, since the most common legal arrangement that startups use to raise funds limits participation almost exclusively to accredited investors. (To read more click title above)
March 17, 2016 – Who is the American Angel Investor? Survey Campaign to Answer the Question;
Precious little is known about the 200,000+ American angels who wield immense economic influence in the U.S. startup economy. In 2014 angels invested an estimated $24B in more than 73,000 startup deals, fueling the economic engine of our country. Today the Angel Capital Association (ACA) and Wharton Entrepreneurship announced a partnership to complete the first comprehensive study to understand who angel investors are, how they became angels, and what factors influence their investing activity. Active accredited investors can confidentially participate in this first-of-its-kind benchmark study at TheAmericanAngel.org, thanks to funding by non-profit Rev1 Ventures’ John Huston Fund for Angel Professionalism. (to read more click title above)
March 9, 2016 - 2015 Annual Halo Report
December 21, 2015 - SEC Staff Recommends Updates to Accredited Investor Definition; By Marianne Hudson, ACA Executive Director
December 18 was a very big day for angel investors. Not only did the SEC put out a staff report that recommends tweaks to the accredited investor definition, but Congress passed a big tax act that makes permanent the 100% exemption of capital gains. Here’s what you need to know in connected blog posts: Accredited Investor Definition – A mix of gifts and lumps of coal in our stockingsNot far from the US Capitol Building, the SEC quietly released a report from its staff on the Accredited Investor definition on the same day. As many angels will remember, the SEC is required to study the definition by Congress in the Dodd-Frank Act. Time will tell if this staff report fully addresses the requirement or if it informs future rulemaking by SEC Commissioners. (To read more click title above)
December 21, 2015 - Big News on Accredited Investor Definition and Tax Breaks – All in the Same Day; By Marianne Hudson, ACA ED
December 18 was a very big day for angel investors. Not only did the SEC put out a staff report that recommends tweaks to the accredited investor definition, but Congress passed a big tax act that makes permanent the 100% exemption of capital gains. Here’s what you need to know in connected blog posts: Tax Benefits - The holiday party starts early with a gift from Congress
The House and Senate passed the PATH Act (Protecting Americans from Tax Hikes) which included the Angel Capital Association’s top tax priority, extension of Section 1202 of the US Tax Code which allows a 100% exclusion of gains on Qualified Small Business Stock has been made permanent. Mark as favorite
Do rising venture capital investments signal rising economic dynamism ahead?
More Articles and News:
Resources and Articles from Angel Capital Association and other organizations -
- Inc. Magazine - Basic Term Sheet Mechanic
- Inc. Magazine - 10 Due Diligence Survival Strategies for Entrepreneurs
- Forbes Magazine - New Math For High Growth Companies Requires Angel Syndication
- Forbes Magazine - The Emergence of Millennial Angels
- Forbes Magazine - This Data Helps Angels ‘Go Beyond’ Returns
- ACA Forbes Column - Insights on Smart Angel Investing
- ACA Inc. Column for Entrepreneurs - Demystifying Angels
- Inc. Magazine - How to Find Angel Investors - A look at national and local groups of angel investors that provide funding for start-ups.
- Angel Capital Association Blog
- American Entrepreneurship is Actually Declining. Here’s Why (Leigh Buchanan, Editor at Large, Inc.)
- A Super Angel’s View on Venture Capital in 2015 (Fabrice Grinda in TechCrunch)
- What the Seed Funding Boom Means for Raising a Series A (Josh Kopelman in First Round Review)
November 23, 2015 - The Pennsylvania Life Sciences Map - http://www.palifesciences.com/
An interactive map showcasing the strength of Pennsylvania's life sciences companies and resource organizations was recently published through the collaborative efforts of PA-based organizations, including the Penn Center for Innovation, University City Science Center, Pennsylvania Biotechnology Center of Bucks County, Montgomery County Development Corporation, and PennsylvaniaBIO.
October 9, 2015 - Astellas Pharma and Immunomic Therapeutics Announce Worldwide Partnership for LAMP-vax™ Products for Allergic Disease
Hershey, PA & Rockville, MD and Tokyo, Japan, – Immunomic Therapeutics, Inc. (“Immunomic Therapeutics”), a company developing next generation vaccines based on the LAMP-vax platform, and Astellas Pharma Inc. (“Astellas”) today announced they have entered into an exclusive worldwide license agreement to the LAMP-vax products for the treatment or prevention of any and all allergic diseases in humans...Upon execution of the new agreement, Immunomic Therapeutics will receive an upfront payment of $300 million and be entitled to receive 10% royalties of net sales of the potential products...“Keiretsu Forum members in the Mid-Atlantic Region invested in ITI (Immunomic Therapeutics) shortly after opening our first chapter in Philadelphia and then did a follow-on bridge round in 2013. The clinical results of the Japanese Red Cedar Vaccine were so compelling that, in less than 4 years from our initial investments we are looking at sharing in the initial $300m payment by Astellas and may end up with an 8-16x return!” said Howard Lubert, the Mid-Atlantic Regions Area President. “Bernie Rudnick, a long time Keiretsu member brought us the ITI opportunity and is well known in the region and around the county as a Life Sciences Super Angel. We are fortunate to have members like Bernie in our Region and look forward to many more positive returns in the future” Lubert added. (To read more please click title above)
September 22, 2015 - 2015 Q2 ARI HALO Report: Geography Edition - The Angel Resource Institute at Willamette University (ARI)
September 17, 2015 - Locus Energy Announces Acquisition by Genscape, by Lauren Ohnesorge, http://www.bizjournals.com/
A technology company with Investor’s Circle backing was just acquired by an energy software firm. Locus Energy, a New Jersey-based technology firm that monitors solar panel performance and provides data analytics was acquired by Kentucky software firm Genscape. Investor’s Circle, which has its headquarters at American Underground in downtown Durham, first saw Locus entrepreneurs presenting at an event four years ago in Philadelphia. Investor’s Circle’s network invested $750,000. Returns from the deal were not disclosed. “The timing is perfect as the liquidity will enable our investors to reinvest proceeds at our next national Investors’ Circle pitch event in Philadelphia on October 21,” said John Moore, president of Investor Circle’s Philadelphia arm. (* Robin Hood Ventures was also an investor). (To read more please click title above)
July 30, 2015 - Q&A With John Sider, Lee Stabert, http://www.keystoneedge.com/
You might call John Sider a matchmaker. As Director of Second Stage Capital at Ben Franklin Technology Partners of Central & Northern PA, he pairs companies that have grown beyond the organization's reach with the capital they'll need to go to the next level. That often means connecting them with the state's growing network of angel investors, a diverse stable of venture capitalists, banks, or state and federal funding opportunities.
....And you can spread the risk.
Exactly. There are not many angel groups in the state that, by themselves, could do a million dollar financing round -- that's about the typical size of what a company is looking for to get them to the next milestone. But the PA Angel Network (PAN) and Jeff Snellenburg [the group's president] have done missionary work over the last five years to build relationships between the different nodes of angel activity. Whether its BlueTree Allied Angels in Pittsburgh,Delaware Crossing Investor Group in Philadelphia, or the Lehigh Valley Angel Investors, he's bringing all those people together. (To read the whole article please click the title above)
July 24, 2015 - Crowdfunding bill advances to Christie's desk, by Andrew George, http://www.njbiz.com/
A bill that would allow private businesses in New Jersey to crowdfund through Web portals has received final legislative approval and is now heading to Gov. Chris Christie's desk for consideration.
Under the measure, businesses can use the portals to secure total investments of up to $1 million in $5,000 increments from New Jersey-based, unaccredited investors.
The bill utilizes a similar business model to that of Kickstarter, a popular online crowdfunding site. But while Kickstarter only allows entities to offer investors gifts of appreciation for their contribution, the New Jersey bill would permit companies to offer investors shares of equity in return for their investments.
July 7, 2015 - Angel Capital Association Elects New Chair, Vice Chair and Directors
The Angel Capital Association (ACA), the world's leading professional association for angel investors, has elected Christopher Mirabile as Chair, Linda Lorraine Smith, Vice Chair and three new board directors, Faz Bashi, Marcia Rick Dawood and Tony Shipley.
"ACA is comprised of more than 13,000 world-class angel investor members and 240 organizations and our incoming Chair, Vice Chair and three new Directors represent some of the brightest minds in angel investing so we're thrilled to have each providing their mentorship and leadership to ACA and its members across North America," stated Marianne Hudson, ACA executive director. (To read more click title above)
June 29, 2015 - NJ considers crowdfunding that give investors a stake in the business, http://www.newsworks.org/
Small businesses in New Jersey could sell securities to the public under a bill before the Legislature, but there's a catch -- investors would need to live within state borders.
The "intrastate crowdfunding" measure is similar to what online services such as Kickstarter offer for new business and arts projects. But instead of T-shirts or mugs as a thank-you gift, mom-and-pop investors would get small amounts of equity in the business. Each investor would be able to supply up to $5,000 worth of capital; entrepreneurs couldn't collect more than $1 million in total.
Similar federal legislation passed in 2012 as part of the JOBS Act, but the SEC hasn't yet crafted the rules needed to implement the law. In the interim, nearly two dozen states have passed their own laws. (To read more click title above)
June 26, 2015 - How Patenting Changes May Affect Small Innovators, http://www.infozine.com/
...the Office of Advocacy, an independent office within the U.S. Small Business Administration, released an Issue Brief entitled “Patenting and Innovative Startups: Putting the America Invents Act (AIA) in a Broader Economic Context.” The issue brief summarizes some of the potential small business outcomes of the AIA and contextualizes those outcomes for innovative startups. This issue brief finds that policy changes that affect patenting could affect innovative startups as they may heavily utilize patents to raise funds to continue to innovate. (To read more click title above)
June 2, 2015 - Philly angel group invests $750K in Philly venture capital firm
ittenhouse Ventures, the newly rebranded Navy Yard-based venture capital firm, found a backer in an unlikely place: an angel group in its own backyard.
Robin Hood Ventures invested $750,000 in Rittenhouse Ventures, Robin Hood managing partner John Moore told us. Rittenhouse Ventures managing partner Saul Richter declined to comment on his firm’s fundraising efforts, citing SEC regulations.
Venture firms don’t often turn to angel groups in their fundraising efforts, Moore said, in part because angel groups usually want to manage the money they have set aside for venture investing, instead of putting it in the hands of a venture firm. But Robin Hood and Rittenhouse have a close relationship, which set the stage for this investment. They’ve co-invested in companies before. (To read more click title above)
April 28, 2015 - Angel Capital Association to host 2016 Summit in Greater Philadelphia, https://technical.ly/philly/
The Angel Capital Association (ACA), the world’s leading group of accredited angel investors, will host their 2016 Summit from May 9 – 11 in Philadelphia at the Pennsylvania Convention Center.
The 2016 Summit will bring more than 800 entrepreneurs from all over North America to connect with business and civic leaders in our 11-county region, and with each other to discuss investment opportunities and strategies.
In a recent PRNewswire article, ACA Executive Director Marianne Hudson noted, “Philadelphia will be a fantastic host city.” She went on to praise the city’s many assets, stating, “given the strong civic support and economic development engine that punctuates a stellar startup ecosystem of universities, incubators, accelerators and a thriving foundation of active angel investors, [Philadelphia will provide] excellent corporate connections and integration.”
This is the first time the ACA has selected Greater Philadelphia for their annual Summit, and it would not have been possible without the collaborative, active support from several leaders. Special thanks to Mike DiPiano of New Spring Capital, Josh Kopelman of First Round Capital, Wayne Kimmel of SeventySix Capital, Ira Lubert of LLR Equity Partners, Richard Vague of Gabriel Investments, and Steve Zarrilli of Safeguard Scientifics for helping to make attract this Summit to our region. Please join in recognizing RoseAnn Rosenthal of Ben Franklin Technology Partners and Katherine O’Neill of JumpStart NJ for bringing this opportunity to the forefront; to Jack Ferguson and the PHLCVB team for showcasing the Pennsylvania Convention Center so expertly; and to Bill Sasso of Stradley Ronan Stevens and Young and Pat Harker of the University of Delaware for hosting the meeting where this opportunity was introduced.
To learn more, visit the Angel Capital Association website here: http://www.angelcapitalassociation.org/
March 26, 2015, SEC Democratizes Equity Crowdfunding With JOBS Act Title IV, Chance Barnett, www.forbes.com
The SEC has, after three long years, finally moved on rulings that allow everyday citizens (non-accredited investors) to participate in equity crowdfunding and investment in privatestartups and small businesses.
The long awaited promise of democratizing investment in startups & small businesses in the U.S. through equity crowdfunding laws is about to be fulfilled. These new rulings come under Title IV of the JOBS Act and will done initially through what are called Regulation A+ investment offerings.
In this post I’ll share a brief history of equity crowdfunding laws including an infographic, details on how the new Title IV / Regulation A+ offerings that include non-accredited investors work, and the impact these changes will bring to the landscape of private investing and fundraising. (To read more please click title above)
March 9, 2015 - Robin Hood Ventures – Successful Part of Philadelphia’s Startup Ecosystem, ACA Membership Director Sarah Dickey interviewed Ellen Weber recently as part of a series of ACA member profiles.
Meet Ellen Weber – ACA member angel investor, Executive Director of Robin Hood Ventures and Executive Director of the Temple Innovation and Entrepreneurship Institute. Ellen provides insight into how the 16 year old angel group maintains its edge for investing in dynamic markets.
February 27, 2015 - Tax breaks for investors in startups proposed by state Rep. Saylor, By Gary Haber, www.ydr.com
Startup companies in Pennsylvania could have an easier time attracting investors under legislation a state lawmaker from York County has introduced in the General Assembly.
House Bill 449, introduced by state Rep. Stan Saylor, R-Windsor Township, would give so-called angel investors a 25 percent tax break on investments in early stage Pennsylvania companies.
The idea is that reducing the tax burden on investors would give them an incentive to back these companies. That would help companies attract the capital they need to bring new products to market and hire more workers, Saylor said Wednesday.
"What we're trying to do is get people to invest in America, and in Pennsylvania," he said.
Entrepreneurs usually get a business going with their own savings or by tapping friends and family. But company owners often have a hard time getting a traditional bank loan or landing an investment from a venture capital to fund bringing a product to market.
"It's really that next step that seems the biggest challenge," said Jeff Vermeulen, executive director of the J.D. Brown Center for Entrepreneurship at York College, which operates a small-business incubator for early stage companies.
This is Saylor's third try to get an angel investment tax credit passed. Two previous attempts passed the state House of Representatives with support from both Republicans and Democrats and by wide margins — 168-32 in the 2013-2014 General Assembly session and 151-44 in the 2011-2012 General Assembly session. But neither bill made it to a vote in the state Senate.
With new leadership in the state Senate, Saylor hopes his bill will go further this time around, even in what he acknowledges is a tough budget year.
His bill was referred to the House Commerce Committee on Feb. 11. A hearing on the bill hadn't been scheduled as of Tuesday.
The program would launch at $1 million a year in total tax credits with the potential of being expanded in future years, Saylor said. The money would come from unspent tax credits under the state's Keystone Innovation Zone Tax Credit program.
About 20 states have tax credits for angel investors — those who are thought to be financially savvy enough to understand the risks of investing in startup companies.
Angel investors across the U.S. poured $24.8 billion into deals in 2013, according to the most recent full-year data from the Center for Venture Research at the University of New Hampshire. The center doesn't keep data on a state-by-state basis so it is difficult to know how much of that was invested in Pennsylvania companies.
Investor groups that are part of the PA Angel Network invested almost $8.4 million in 2014, up from almost $7.9 million in 2013, said Jeff Snellenburg, the network's president.
A state tax credit would help balance some of the risks in investing in startups, said Catherine Mott, who heads a Western Pennsylvania investment group that invests in early stage companies. Almost a third of the companies nationally in which angel investor groups invest, fail, Mott said. The rate for individual investors is even higher — around 50 percent, said Mott, CEO of BlueTree Capital Group and BlueTree Allied Angels in Wexford, Pa.
Mott, a former board chair of the Angel Capital Association, an industry group for the angel investor industry, said the state tax credit Saylor proposes would encourage more investors to put money into young companies in Pennsylvania. She saw it happen across the border in Ohio after that state launched its Technology Investment Tax Credit.
After the Ohio tax credit started, many Ohio investors who previously put money into Pennsylvania deals, invested in Ohio startups instead, Mott said.
Ohio's credit proved so popular that the program reached its $45 million maximum and the state stopped accepting new applications as of November 2012.
A Pennsylvania tax break would be "a competitive equalizer" for the state and something it should consider to keep companies from relocating elsewhere, said Tom Palisin, executive director of the York-based Manufacturers' Association.
Neighboring New Jersey already gives investors a tax break for investing in early stage companies. New Jersey's program provides a 10 percent tax credit, up to $500,000, for investments in emerging technology companies,
Saylor's bill applies to investments in companies with fewer than 100 employees, that have received less than $5 million in private-equity investments and that are have been in operation in Pennsylvania for five years or less. The companies also have to be headquartered in Pennsylvania or establish a headquarters here and employ 51 percent or more of their workforce in Pennsylvania.
By the numbers
$24.8 billion: Angel investments in U.S. in 2013
70,730: Ventures that received angel funding in 2013
298,800: Number of active angel investors in the U.S. in 2013
$350,830: Average angel investment deal in 2013
23 percent: Percentage of angel investments that were in the software industry, the most popular sector for angel investments
Source: Center for Venture Research, University of New Hampshire
February 23, 2015 - Angel Groups Seek to Assure Entrepreneurs They Are Accredited, by Benjamin Romano, www.xconomy.com
The angel investing horror story goes something like this: An entrepreneur publicly solicits seed capital under new securities laws, but accidentally accepts investment from an unaccredited investor. When this violation of JOBS Act rules is discovered, the entire investment round must be rolled back and the money—if there’s any left—returned. It’s the ultimate lose-lose situation.
“Everything shuts down and everyone loses money,” says Yi-Jian Ngo, managing director of the Alliance of Angels, a long-tenured angel group in Seattle.
It almost doesn’t matter whether this has actually happened under new rules born of the 2012 JOBS (Jumpstart Our Business Startups) Act, which lifted the longtime ban on general solicitation of securities offerings by small companies, provided the companies verify that all investors are accredited. The fear that it could, along with continuing uncertainty, has caused some entrepreneurs and investors to avoid generally solicited deals altogether. (It had been illegal since 1933 to advertise a non-registered stock offering to the general public. Until the JOBS Act, small companies selling equity did so privately, through quiet offerings in which shares were sold only to accredited investors with whom the company had a pre-existing relationship.)
This caution can also be seen at startup accelerators such as Techstars, which have dialed-down the specific financial details presented on stage at their demo days and even explored new company presentation models to ensure they don’t accidentally generally solicit investment.
Now some angel investing groups are taking steps to clear away some of the ongoing JOBS Act confusion, and remove the costly burden from startup entrepreneurs of verifying that all of their investors are indeed accredited.
The Alliance of Angels is among about 15 groups to have the Established Angel Group Certification from the Angel Capital Association (ACA), a national nonprofit trade organization based in Overland Park, KS. The certification essentially provides a company seeking investment verification that all the investors in the angel group are accredited, meaning—for now, anyway—they have net worth in excess of $1 million or annual income of at least $200,000 (or $300,000 for married couples). (To read more click title above)
FEBRUARY 17, 2015 - California’s Tech M&A and IPO Activity is More Than the Next 5 States Combined, by , www.cbinsights.com
46 states and Washington D.C. had at least one tech exit in 2014. California retained the number one spot with more than 520 private company tech exits, which was more than the next 5 states combined. New York came in at a distant second with over 150 exits includingOnDeck Capital and Varonis Systems. Massachussets was the only other state with more than 100 tech exits, beating out Texas which fell to rank 4 and below the 100 tech exit threshhold.
Somewhat surprisingly, Florida beat out the tech hubs of Washington and Illinois with the exits of Prolexic Technologies and BlueKite. Maine, Arkansas, and Kentucky entered the rankings in 2014 after being shut out in 2013.
Other notable ranking changes between 2013 and 2014 included:
- Indiana, which was previously ranked at 43, jumped to rank 25 in 2014. Exits includedCSInet and Fifth Gear.
- Idaho, which was also previously ranked at 43, jumped to 31 in 2014 with exits such asBookLamp and Agilefront
- Nevada dropped 7 ranks, previously being ranked at number 18 in 2013 falling to 25.
- At the bottom of the table, Louisiana, New Mexico, and South Dakota all fell by more than 10 spots.
February 19, 2015 - Angel investing in healthcare continues to grow. But can it keep fitting in?, by Chris Seper, www.medcitynews.com
It was easy to get my head around the biotech buzz and the digital health marketing blitz that happened last month at the JP Morgan Healthcare Conference.
But here’s the question I heard most often (and gave me the most food for thought): “Can I meet more angels?”
People were ravenous. From PR agencies on behalf of their clients to software platforms looking to be the new financial connectors to, of course, the entrepreneurs themselves.
Healthcare investing is transforming. Venture capital funds are re-emerging. Strategic investors and foundations are exponentially more influential. Crowdfunding and new online platforms are experimenting and getting better.
Yet, angels continue to play – or be courted to play – a bigger role in healthcare investing. People want everything from the Family Office angel who can play a role in a big A Round (with capital to come back later) to the traditional angel groups that have the sense and ability to syndicate with other angels for venture-sized investments. And here’s the best news: the number of early-stage funds continue to grow.
But as they grow one thing matters: can they play well with everyone else? Venture traditionally was quick to criticize the angels as unprofessional, giving bad early valuations or building poor deal structures that made follow-on funding difficult. However, today’s angels are savvier. They deserve more clout and a payoff not associated with angel investors of just a few years ago.
“Angels and VCs both are significant players and may co-invest when funding young companies,” says Don Ross, Managing Director of HealthTech Capital. “While Venture Capital invests about $30 billion annually, angel investors are not far behind with $25 billion. Still, their investment profiles – investment amount, company stage, and exit expectations—can be quite different.” (To read more click title above)
February 15, 2015 - Startups, Late-Stage Valuations, And Bull, by Alex Wilhelm, www.techcrunch.com
Bill Gurley, a general partner at Benchmark, makes news mostly because he says what other venture capitalists will tell you while drunk, but does so while on the record. It’s refreshing in a way.
Most recently, Gurley made the point that the tech and investment industries are shoving nine and ten-figure sums of cash into startups while not enjoying a full dig into their financials. In the age of the mega-round, the issue isn’t a small one: Gurley thinks that some people are investing from the hip and not from the spreadsheet.
Here’s the quote:
“Pay attention,” Gurley said. “These companies aren’t going through a proper audit process. … We’re drifting from high-margin businesses to ever-increasing low-margin businesses in terms of what we’re saying are unicorns. Be careful. I don’t think it’s sustainable if you extrapolate that way.” (To read more click title above)
February 13, 2015 - Will These 5 Models of Crowdfunding Replace Angel and VC Investors?, by Mark Zwilling, www.entrepreneur.com
Even if you ignore all the hype around crowdfunding, there can be no doubt that it is a real alternative for entrepreneurs to achieve visibility and funding today. According to articles on Entrepreneur last year, there are now almost 1,000 crowdfunding platforms in existence, currently estimated to add more than $65 billion and 270,000 jobs to the economy.
Yet as I mentor entrepreneurs around the country, it still seems to be one of the least understood approaches to startup funding, with more myths than accredited angels and professional venture capital investors combined. The primary challenge seems to be that the crowdfunding term is used to encompass so many different concepts that everyone is confused.
In fact, perhaps the most important model, equity crowdfunding for non-accredited investors, is still not legal in the U.S., despite having been passed into law in early 2012 via the JOBS Act, and still has no scheduled date for availability, waiting for the rules to be finalized by the SEC. Even with this, crowdfunding today means any one of the following five quite different models:
1. Rewards model
2. Product pre-order model
3. Donation good-cause model
4. Interest on debt model
5. Startup equity model
(To read more please click title above)
Feb 13, 2015 - Here's how an angel investor tax credit program would work in Maryland, by Sarah Gantz, www.bizjournals.com/baltimore
Maryland could establish a $5 million fund to put toward tax credits for individuals and firms who invest in startup companies.
Startup and investor advocates, including the Greater Baltimore Committee, have said they will push for the state to create a new tax credit specifically for angel investors who give money to companies at their earliest stages, when they often struggle to bring in needed cash. A bill introduced by Baltimore City Democrat Sen. Catherine Pugh earlier this month details how the tax credit would work and who could qualify as an investor and startup recipient.
The bill, SB 584, is scheduled for a hearing Feb. 25 in the Senate Budget and Taxation Committee. The legislation would need approval from the full legislature and Gov. Larry Hogan before taking effect. (To read more click title above)
February 12, 2015 - Rep. Stan Saylor back with 'angel investor' tax credit bill, By John Hilton, www.cpbj.comState Rep. Stan Saylor (R-York) is again pushing legislation to set up tax credits for early-stage angel investors.
The bill, which was referred Wednesday to the House Commerce Committee, passed the House in the last two legislative sessions. It calls for a tax credit of 25 percent of the initial angel investment to go back to the investor, an effort to stimulate economic growth in startup businesses.
“I have long been a supporter of small businesses and startups who create 99 percent of all net new jobs here in Pennsylvania,” Saylor said via email. “Studies indicate their main challenge in growing and adding jobs is capital. ... I don’t believe there is a huge issue with the bill other that we cannot reach floor consideration in the Senate. This time around, I will be reaching out to the new Senate Leadership and asking for consideration of the bill.”
In the bill, an angel investor is defined as someone whose net worth (combined with a spouse) exceeds $1 million, or whose individual income surpasses $200,000 for the last two years ($300,000 combined with a spouse).
The business being invested in would have to be headquartered in Pennsylvania, then stay in Pennsylvania for at least five years. It cannot have been in operation more than five consecutive years.
The bill died in the Senate the past two terms. In the new bill, language regarding repayment of the tax credit is tightened.
In the new version, if the investment is withdrawn at any time before or during the year the tax credit is claimed, a portion or all of the tax credit must be repaid, depending on when the withdrawal occurs.
The bill is similar to ones that have been passed in more than a dozen other states.
Recent Angel Capital Association Blogs and Articles –
February 9, 2015 - Early-Stage Investors Are Angels, Not Sharks, By: Marianne Hudson, ACA Executive Director
February 24, 2015 - Angel Group Certification Program Helps Angels and Entrepreneurs Do Deals, By: Marianne Hudson
January 29, 2015 - 10 Crowdfunding Realities You Need to Understand, By: Christopher Mirabile, ACA Board and Launchpad Venture Group
January 23, 2015 - Nine Approaches To The Art Of Angel Investing -- What Works For You?, Marianne Hudson, www.forbes.com Although we often talk about angel investors as a monolithic group of people, in reality angels fall into many categories and practice the art of angel investing in many ways. An angel can choose how he or she collaborates with entrepreneurs and other investors in a variety of ways that fit their experience, wealth, interests and time availability.
I recently spoke to John May, founding chairman of the Angel Capital Association (ACA) and co-leader of New Dominion Angels in Virginia. John has identified nine ways that angels do what they do. As a lead instructor for Angel Resource Institute and ACA’s “international ambassador,” John has seen many different approaches – some more successful than others. (To read more click title above)
January 15, 2015 - How Much Due Diligence Does An Angel Really Need To Do?, Marianne Hudson, www.forbes.com One of the biggest debates in the angel industry is how much due diligence investors should do before they invest. From “rank and file” angels to rock star investors like Ron Conway orMark Cuban, opinions differ vastly from literally doing none to conducting formal processes that take months. So how do you decide what the right amount is for you? And what are the factors you really need to check out?
Count me in the camp that believes that doing due diligence is a very important. For me, it is about being comfortable as an investor that the team, market and product have a chance for success, that there are no red flags pointing toward failure, and better understanding the company’s capital needs over time. (To read more click title above)
January 13, 2015 - Angel investor tax credit could make Maryland more appealing to investors, entrepreneur, Sarah Gantz, Baltimore Business Journal
Washington, D.C., Philadelphia, New York — Maryland has a lot of competition for entrepreneurs' attention. Experts say a tax credit specifically for angel investors could sweeten the deal for entrepreneurs and investors who decide to do business in Maryland.
Establishing an angel investor tax credit will be a top priority for the Greater Baltimore Committee during the state's upcoming legislative session. GBC sees the tax credit as a way to boost the state's economy by supporting growing startups that will create jobs and bring new business to Maryland. Investors and adivsors of Baltimore-area startups say the tax credit would not only help startups grow in Maryland, but keep them — and their investors — from laying roots elsewhere. (To read more click title above)
January 6, 2015- Lehigh Valley Angel investors backed three startups in 2014, by Scott Kraus of the Morning Call
Lehigh Valley Angel Investors, a group of 33 locally based entrepreneurs backing innovative startup companies announced that it backed three additional firms in 2014.
The group, which works with the Ben Franklin Technology Partners, invested a total of $260,000 in three Pennsylvania companies last year.
Pittsburgh-based Carmell Therapeutics won a $50,000 investment. The company's technology enables the manufacture of biologically active plastics from blood plasma for treating injuries to bone and connective tissue. The plastics can be seen as ultra-concentrated blood clots, easy to handle, shape and suture. The company is focused on the sports medicine market.
Bethlehem's Cerora Inc. earned an investment of $80,000. The health care information technology company is developing a portable electroencephalogram that measures and records electrical activity in the brain. There are currently no easy-to-use, portable and accurate neuro-diagnostics for use by doctors, nurses and emergency responders. The company is at Ben Franklin TechVentures and also received $200,000 from Ben Franklin Technology Partners.
The investors awarded $130,000 to Norristown-based Thubrikar Aortic Valve Inc. The company is a medical device company developing a next generation transcatheter aortic value implantation system. After testing it in animals, Thubrikar is preparing for human trials this year.
(To read more click title above)
December 29, 2014 - Ding! Tips To Earn Your Angel Board Member 'Wings', Marianne Hudson, www.forbes.com “Every time a bell rings, an angel gets his wings.” We all remember this saying from “It’s a Wonderful Life.” It’s a powerful image for how we earn just rewards when we apprentice well and learn how to help each other. Like the mythical angel in the movie, angel investors need to put in their time and seek out proper training to become full-fledged, high impact angels--especially when sitting on a startup board of directors. Having the right angel on a board can be the difference between a startup’s success and failure, and by extension, the success or failure of an angel investment.
So how can angel investors earn their board member wings? One of the best people I know to ask is Dave Berkus, a deeply experienced angel and member of the Angel Capital Association (ACA). Dave serves on 10 boards, of which he chairs six. He has seen both “apprentice” angels and sophisticated angels participate on startup boards. (To read more click title above)
December 26, 2014 - Angels of Innovation: Every Great Company Starts With an Angel or Two…, By Josh Kalish, www.crowdfundinsider.com/ The lifeblood of online investment platforms is investment. That’s not to take anything away from the brilliant and dedicated entrepreneurs who bravely dance on the cutting edge of industry. But let’s face it, an idea without funding will flicker and then burn out like a smoldering ember without oxygen.
It’s easy to marvel at today’s fast-paced and innovative business sector, but have you ever stopped to think about how it starts? And by “it” I mean each of the many dazzling tech-smart businesses: the Ubers, the Facebooks, the WhatsApps, the Warby Parkers—they all seem so grown up now (Uber’s latest round pegged the company’s valuation at $41 billion), they all have global user bases (WhatsApp recently eclipsed 600 million worldwide) and many achieve those highly coveted liquidity events (Lending Club’s recent IPO yielded over $ 1 billion). But these businesses started small (a lonesome founder or two), and they all had help from angels. (To read more click title above)
December 22, 2014 – New Jersey Economic Development Authority Approves Investor Tax Credits To Four Firms,
New Jersey Economic Development Authority approved more than $17.6 million in Angel Investor Tax Credit investments to support four New Jersey companies in Somerset, Mercer and Middlesex Counties.
"Investors have pumped more than $46 million in private investment funding into New Jersey tech companies since the Angel Investor Tax Credit program was established last year," EDA CEO Michele Brown said. "This program continues to strengthen New Jersey’s competitive edge and encourage investment in our most promising companies."
Companies benefiting from state incentives include: ElectroCore, Agile and Aucta Pharmaceuticals. (To read more click title above)
December 22, 2014 - Angels: 100% Exclusion of Gains Now Law for 2014 Investments By: Marianne Hudson, ACA Executive Director, www.angelcapitalassociation.org/
Last week, President Obama signed the Tax Increase Prevention Act, which includes several benefits for small businesses and also a benefit for angel investors. We want to get this information out to you, as this benefit relates to investments made in 2014 (retroactively and through December 31).
The new law includes a 100 percent exemption for gains made in Qualified Small Business Stock (also known as “Section 1202”) and this new law effectively means that you pay no taxes on gains from your investments that meet several criteria below and Alternative Minimum Tax does not apply. If you are interested in this program, PLEASE TALK TO YOUR ACCOUNTANT to ensure you have all the information you need to structure your investments to meet all requirements.
Criteria and Limitations:
- Investments must be made by a non-corporate investor (for example, individuals or funds structured as LLCs).
- Investments must be made in 2014. There have been a variety of different levels of tax exclusions since 2010, from 50% to 100%. A listing of the dates and percentages is here.
- The company in which you invest must be a C corporation and must be a qualifying type of business (many businesses except financial institutions, farms, professional service firms, hotels, and restaurants)
- The company in which you invest must not exceed $50 million in aggregate gross assets at any time before the investment or immediately afterward. An important issue in this size is that 80% of the assets must be used in the "active conduct" of the business at all times.
- The stock must be purchased by the investor as an original issuance from the corporation, directly or through an underwriter. So, notes and warrants do not count. We're hearing that if you have an outstanding note that converts to stock before December 31st, then the stock would count for this program. (BUT TALK TO YOUR ACCOUNTANT.)
- The stock must be held for more than five years (subject to exemptions for qualifying tax-free rollovers)
- There are limitations on redeeming shares of the company's stock before and after the qualified stock is issued.
- The gains eligible for the zero taxes by any single taxpayer max out at $10 million or ten times the adjusted tax basis of stock issued by the stock
- The gains are also not subject to the Alternative Minimum Tax.
For more information, check out these articles:
- Tax Tips Every Angel Investor Should Know
- Obama Signs 2014 Tax Extenders: Money in Your Pocket
- Calling All Angels - Donald Jay Korn, Financial Planning Magazine, September, 2009 (This was written when the exemptions for QSBS were only 50 to 75%, but has helpful information, and includes one of the last media quotes from Luis Villalobos.)
December 19, 2014 - Angels And Universities: Finding The Next Google, Marianne Hudson, www.forbes.com We’re all aware of the amazing research and technologies that universities are doing to improve people’s lives. What makes many angels excited is that these new innovations can lead to great companies – if universities can connect with the right startup entrepreneurs.
What is often surprising to learn is how difficult it is for angels and universities to work together to bring these technologies to market. While Google GOOGL -1.52%, started by Stanford graduate studentsSergey Brin and Larry Page, is forever connected to the university through licensing agreements, many successful companies such as Facebook, Microsoft MSFT -0.58% and Dell weren’t. Although they were conceived of by college students, they were started after the founders left school.
What causes these gaps? Jamie Rhodes, a former university tech transfer head, serial entrepreneur and founder of Alliance of Texas Angel Networksplus an Angel Capital Association (ACA) board member, notes that other than Stanford and MIT, few universities have figured out how to transfer their technology into successful startups. One reason for Stanford and MIT’s success is that their professors understand the importance of having relationships with entrepreneurs and investors. Their technology transfer offices understand that a successful partnership means more than a big corporate licensing agreement. So how can angels and universities tighten their partnerships to close these gaps? (To read more click title above)
December 10, 2014 - Why Angels Should Care About The SEC's Definition Of Who Can Invest Marianne Hudson, www.forbes.com While many people consider government rules and regulations boring, angel investors should be aware that the Securities and Exchange Commission (SEC) is considering potential changes that could prevent many angels from investing. Even worse, it could reduce capital for startup companies that create jobs and spawn innovation. I don’t want to sound alarmist because no final decisions have been made. What’s important is that the angel community and other private investorsknow what’s going on. And if you care about the potential impact, it’s time to write to the SEC. The Angel Capital Association (ACA) has frequently met and presented to the SEC and its advisory bodies arguing that the existing definition works well and that financial thresholds not be changed.
The SEC’s review involves the definition of an accredited investor. Today angel investors must be accredited. Right now an accredited investor is defined as anyone with a net worth of $1 million (excluding a primary residence) or an annual income of at least $200,000, or $300,000 if married. (To read more click title above)
November 14, 2014 Top 30 Traits Of Successful Angels -- How Many Do You Have?, By: Marianne Hudson, ACA Executive Director, Forbes.com
Dave Berkus is one of the most successful angels I know. He has made 108 investments in early-stage companies and has an IRR of 97 percent. Dave is a special case – he is a top speaker, expert in corporate governance, and has a valuation methodology named after him – even so, are there insights smart angels can pick up from this Los Angeles-based investor?
What is it about Dave that makes him that good? More to the point--are there traits we can emulate from successful angels like him?
I recently asked some of the angel investors I most respect – board members of the Angel Capital Association - what they think are the characteristics of the best angels and also got ideas from Roland Schumann III of Sierra Angels. These angels are successful as investors, with great financial returns and many of them educate other angels to build their success.
Their suggestions may surprise some people. Sure, the traits include industry expertise and top of the line best investment practices. But, personality and character traits like sense of humor and fun were mentioned the most often.
When I think about it, this makes sense. Angels invest their own money and time – if they can’t have fun in the process, why do it at all?
How many of the 30 traits on this list of what makes an angel investor a good angel do you have? (To read more click title above)
October 16, 2014 - Exit goal alignment crucial in angel investing, expert says, By Fiona Rotherham, http://www.builtinwellington.com/ Acronyms abound in the business world – think GFC, Ebitda, Opex, Libor, OCR. Now visiting American angel investor John Huston has added a new one – EGC. It stands for exit goal congruence and means the investor’s desire to eventually sell the company and make a return is matched by that of the entrepreneur.
It’s the most important thing for any angel investor to consider before they commit their money, he said. Huston became an angel investor in 2000 after retiring from a 30-year career in banking and founded the first Ohio TechAngel fund in 2004 with 50 investors. It later became a founding member of the US Angel Capital Association.
Speaking at today’s 7th annual New Zealand Angel Summit in Auckland, Huston said he invested only in tech companies in his home state because he liked to know the entrepreneur who he would be making rich. He said goal alignment with the entrepreneur was key to achieve his aim of putting between US$3 million to US$5 million in the pockets of that entrepreneur once the company was sold. (To read more click title above)
October 14, 2014 - Who Is An Accredited Investor? New Recommendations From The SEC, BY ELIZABETH SIGETY, POSTED IN VENTURE CAPITAL FINANCE On October 9, 2014, the Investment Advisory Committee of the SEC issued its much awaited recommendations on the “Accredited Investor” definition of Regulation D of the ’33 Act. This is in response to the SEC’s Request for Comments on the definition of “Accredited Investor” in its release relating to Proposed Rules for Regulation D and Form D, which mainly related to general solicitation (for the full text of that release, see here). Since then, there have been numerous comments and concerns relating to proposals that would increase the wealth and income levels needed to qualify as an Accredited Investor – many asserting that a dramatic increase would severely hurt the ability of emerging companies in the US to attract the investment capital they need to build their businesses.
First, the recommendations are just recommendations – the first in a potentially long process of determining whether to amend the Accredited Investor definition. The report is a thoughtful approach to the issue, though slightly worrisome (to this writer) in that some of the recommendations may add complexity to what is now a fairly simple process. The recommendations emphasize that the SEC should determine which investors truly need the protection of the ’33 Act and should revise the Accredited Investor definition to include “financial sophistication” as an important element of the definition. For example, the recommendations cite as possible indications of “financial sophistication” industry experience, tests like the Series 7, investment experience or participation in angel groups that follow designated best practices, etc. In addition, the recommendations discuss financial thresholds – questioning whether a percentage-based threshold should be considered or whether other assets, such as retirement plans, should be excluded from the calculation of the thresholds (in the same way that the value of the investor’s primary residence is currently excluded).
But there is much more. For the full text of the recommendations, see here. In addition, the Angel Capital Association has been very involved in commenting and analyzing this issue. You can view their website at www.angelcapitalassociation.org.
October 9, 2014 - Q2 2014 Halo Report Angel Group Valuations Continue Three-Quarter Climb, http://www.angelresourceinstitute.org/
The Angel Resource Institute (ARI), Silicon Valley Bank (SVB) and CB Insights released the Q2 2014 Halo Report today, a national survey of angel group investment activity. The report finds median pre-money valuations continuing to climb for the third consecutive quarter reaching $3 million in Q2 2014. Round sizes dropped approximately 40 percent to $600K over the prior quarter when angel groups invested alone, but rose nearly 20 percent to $2 million when angels co-invested with other types of investors.
Texas became one of the most active regions in the US for angel investment in the second quarter, joining California and New England, and the angel groups in the Mid-Atlantic region invested nearly one-quarter of all angel group dollars during the same time period. Average round sizes rose significantly for healthcare companies by $1 million to $2.6 million, while round sizes for Internet companies fell by $1 million to $800K in the quarter. (To read more click title above.)
September 30, 2014 - Three Rules Every Angel Investor Should Remember Before Investing in Start-ups, Sanjeev and Sandeep Sardana, www.forbes.com Given the success of so many technology companies it is no surprise that many investors want to find the next Alibaba, Whatsapp or Uber at an early stage. We only hear about the success stories from angel investors at cocktail parties but most angel investors will tell you from experience that investing in start-ups is a lot like buying a lottery ticket. While many factors such as the idea, the speed of execution, and the team are important to evaluate deals, three simple rules have proven time and again to help increase odds of success when investing in young companies: Process, Control, Diversification. (to read more click title above)
September 11, 2014 - Angel Investing: 'Back to School', By Carol Curley, Managing Director at Golden Seeds, http://www.huffingtonpost.com
As a parent, Septembers were always filled with the chores of "back to school" -- books to be purchased, sharp pencils, the search for that perfect lunchbox..... As an angel investor, September also puts me in a "back to school" frame of mind. At Golden Seeds, I have the privilege of overseeing The Knowledge Institute, which houses our Investor Training Series. Our fall sessions in New York begin in September when members are back from summer vacations. In preparation for our training sessions, I am constantly looking for new resources, books, etc. to continue to enhance or improve our training materials. Although by no means an exhaustive list, here are some resources that I have found to be quite helpful: Angel Resource Institute: The ARI provides great education programs through its Ewing Marion Kauffman Foundation's Power of Angel Investing series of seminars and workshops. Angel Capital Association: The ACA is the professional and trade association supporting the success of angel investors. Check out their Webinar Series which covers topics from the Jobs Act to building a portfolio. In addition the ACA runs a series of events which provide great sources of information. Consider attending the upcoming Leadership Workshop in Ohio and the Annual Summit next Spring in San Diego. Pipeline Fellowship: Pipeline is an angel investing bootcamp for women that works to increase diversity in the U.S. angel investing community and create capital for women social entrepreneurs
From my Bookshelf: Newly released Angel Investing - The Gust Guide to Making Money & Having Fun Investing in Startups by David S. Rose, CEO of Gust and Founder of New York Angels. This is a great read from a true pioneer in the angel investing scene. What Every Angel Investor Wants You to Know by Brian S. Cohen, Chairman of New York Angels, and John Kador. Written in the first person and filled with anecdotes, war stories and wisdom gained from Brian's many years of angel investing, this book is both a fun and insightful read. Term Sheets and Valuations by Alex Wilmerding. A very helpful resource on the nuances of Term Sheets. Early Exits by Basil Peters. This is a very informative read on exits from the perspective of the angel investor. In a recent post, I compared Angel Investing to Brain Fuel, as it provides the opportunity to be in a constant state of learning. Please add to the comment section below any resources that you have found to be helpful in the never-ending process of learning. (To read more please click article title)
September 10, 2014 - Simple Term Sheets Align Angel Investors And Entrepreneurs For More Successful Deals, Marianne Hudson, www.forbes.com Angel investor and entrepreneur relationships are similar to a marriage – both benefit when each relies on and supports the other. Wouldn’t it make sense if this business marriage began with an agreement that supported both parties and focused on aligning goals instead of an adversarial “pre-nup?”
Things have been moving in this direction with term sheets designed specifically for angels and startups. Ten years ago angels typically used a standard term sheet developed for venture capitalists (VCs). The angel-specific term sheets are the next level of improvement.
Negotiating a term sheet is one of the most critical parts of the equity investment process; it defines the relationship between the investors and company. Done well, it leads to more detailed legal documents that close deals and get relationships and companies started out on the right foot. (To read more click title above)
September 9, 2014 - Jack Warnock to Philly entrepreneurs: ‘step up,’ become angel investors [Q&A] - By Juliana Reyes, http://technical.ly/philly/
Jack Warnock has a message for Philadelphia’s business people: they should become angel investors.
Discussing Philadelphia’s future is good and all, but angel investing is something that can actually make a difference, said Warnock, vice president of angel groupKeiretsu Forum Mid-Atlantic. “We need more people to actively step up and put money to work,” he said. “Be more than just spokespeople.”
For Warnock, it’s not necessarily just about investing in local companies (Keiretsu Forum sees pitches from across the East Coast and beyond, though Warnock has invested locally), but about building up the angel investing community. (To read more please click article title)
September 4, 2014 - How Angels Can Enjoy The Best Returns -- Financial And Otherwise, Marianne Hudson, http://www.forbes.com/ With angel investing being so risky, eventually most smart angels wonder – is there a way to increase my odds for good returns? And how else do I make investing a good experience for me?
Here’s the good news. Studies show that angel investors can make good returns, on par or better than VC or other types of private equity, when they follow some good investment practices. The studies put proof behind what was previously just common sense. On top of that, many angels are having a blast investing in startup companies and are happy to share their secrets for fun.
Let’s start with the largest study and what we can learn from it to enhance financial returns. Rob Wiltbank, CEO of software company Galois and professor at Willamette University, collected data on exits – good and bad – from hundreds of angels in the Returns to Angel Investors in Groups. The study found that the overall return for the 1,100 plus exits in the dataset was 2.6 times the invested money in 3.5 years, or about 27% gross Internal Rate of Return.
More important than the average return for this “portfolio” of 1,100 exits, was the very wide and unbalanced distribution of the exits, with 52% of the exits losing some or all of the investment and 7% providing nearly all of the return. This means the average in the study didn’t describe the performance for most of the angels who participated. But there are some good takeaways that can lead to better returns: (To read more please click the title above)
August 29, 2014 - 12 things you should know about raising money from angel investors, Scott Gerber, http://thenextweb.com
When you need funding, angel investors can seem like a godsend. However, raising money from angels isn’t as easy, or as simple, as it might seem. To learn more, I asked 12 successful founders from Young Entrepreneur Council (YEC) the following question: I’m thinking of raising money from angels. What is one thing I should know? Their best answers…(To read more please click the title above)
August 28, 2014 - What Every Angel Should Know Before Writing The First Check, Marianne Hudson, http://www.forbes.com/
Consider the temptation. The young entrepreneur is charismatic and smart. The new product is very cool. And the technology behind it is ground breaking. With all that, investing in this company seems like a slam dunk. Maybe, maybe not. But before you invest, make sure you’re evaluating not only this particular opportunity, but also how it fits into your bigger “angel strategy.” Experienced angel investors caution those just starting out not to make the same mistakes they’ve made. As an angel investor and executive director of the Angel Capital Association (ACA) – the world’s largest angel professional association, I hear a lot of good advice. Bill Payne, who has made 60 angel investments, comes to mind. “Most of us who have been doing this for a long time highly encourage newer angels to do what we say and not what we did,” says Payne, who is a member of ACA and theFrontier Angel Fund in Montana. “Most of us started writing checks and later asked, `what is my real strategy?’” To avoid learning the hard way, it’s important for angel investors to have a strategy before writing their first check. That starts with understanding these five critical factors: The risks of angel investing; Deal returns and the need to diversify. Your own risk tolerance; How much to invest in total as an angel and how much in each deal; What you care about and how that applies to angel investing. (To read more please click article title)
August 14, 2014 – LRHV Portfilio Company LiveLook Acquired by Oracle, Ellen Weber, www.robinhoodventures.com.
Robin Hood Ventures is pleased to announce that Oracle has completed their acquisition of LiveLOOK. This acquisition strengthens Oracle's Service Cloud offering with leading co-browse functionality to improve customer experiences through connected real-time engagements. The transaction was originally announced in June. (To read more please click article title)
August 6, 2014 – The Angel Resource Institute (ARI), Silicon Valley Bank (SVB) and CB Insights released the Q1 2014 Halo Report, a national survey of angel group investment activity. The report finds median round sizes increased to $980K per deal, and pre-money valuations rose to $2.7 million in the quarter. Investments in Internet-related companies jumped significantly, while dollars invested in mobile and healthcare companies dropped.
“Opportunities are great for startups seeking funding today,” said Rob Wiltbank, Vice Chairman of Research, Angel Resource Institute. “An increase in high-profile liquidity events is driving new investments by angel groups and all types of investors, which in turn will lead to the formation of new companies and continue to feed the cycle. ” (To read more please click article title)
Archived Articles and News:
October 5, 2012 - $140 million plus for Pa. tech innovation (Philadelphia Business Journal) -
Two suburban Philadelphia legislators introduced a bill last week designed to generate at least $140 million for cash-strapped biotech firms and other high-tech companies in Pennsylvania.
September 30th, 2012 - Why Angel Investors Don’t Make Money … And Advice For
People Who Are Going To Become Angels Anyway, Andy Rachleff (TechCrunch)
Everywhere I go in Silicon Valley I hear people discussing their angel investments. The conversations remind me of fish stories. People love recounting the one time they caught a big fish, not the many futile hours they spent waiting for a bite. My skeptical perspective on angel investing is colored by my 25 years in the venture capital business and the data I use to teach my students at the Stanford Graduate School of Business.
September 27, 2012 - ACA Letter to SEC on Proposed Rule Eliminating the Prohibition against General Solicitation in Rule 506 (Angel Capital Association Website)
September 25, 2012: 1H 2012 Halo Report™: Angel Group Activity Update - (ARI Website)
This project highlights angel group investment activity and emerging trends throughout the United States and provides much sought after data that has not been previously available to entrepreneurs or early stage investors.
August 24, 2012 - Novira Therapeutics raises $23M for hepatitis B treatment that attacks DNA of virus by Stephanie Baum (MedCity News) -
A biotechnology company with a novel drug treatment for hepatitis B and HIV patients could change the way drugs combat viruses. The drug, under development, which targets the outer shell, or capsids, of the viruses, has secured $23 million in a series A financing round led by new investors. Early stage venture capital firm 5AM Ventures andCanaan Partner were joined by WuXi PharmaTech as well as existing investors BioAdvance, Mid-Atlantic Angel Group, Robin Hood Ventures and Delaware Crossing Investment Group, according to a company statement. It had raised over $3 million to date in seed and grant funding.
Two suburban Philadelphia legislators introduced a bill last week designed to generate at least $140 million for cash-strapped biotech firms and other high-tech companies in Pennsylvania.
September 30th, 2012 - Why Angel Investors Don’t Make Money … And Advice For
People Who Are Going To Become Angels Anyway, Andy Rachleff (TechCrunch)
Everywhere I go in Silicon Valley I hear people discussing their angel investments. The conversations remind me of fish stories. People love recounting the one time they caught a big fish, not the many futile hours they spent waiting for a bite. My skeptical perspective on angel investing is colored by my 25 years in the venture capital business and the data I use to teach my students at the Stanford Graduate School of Business.
September 27, 2012 - ACA Letter to SEC on Proposed Rule Eliminating the Prohibition against General Solicitation in Rule 506 (Angel Capital Association Website)
September 25, 2012: 1H 2012 Halo Report™: Angel Group Activity Update - (ARI Website)
This project highlights angel group investment activity and emerging trends throughout the United States and provides much sought after data that has not been previously available to entrepreneurs or early stage investors.
August 24, 2012 - Novira Therapeutics raises $23M for hepatitis B treatment that attacks DNA of virus by Stephanie Baum (MedCity News) -
A biotechnology company with a novel drug treatment for hepatitis B and HIV patients could change the way drugs combat viruses. The drug, under development, which targets the outer shell, or capsids, of the viruses, has secured $23 million in a series A financing round led by new investors. Early stage venture capital firm 5AM Ventures andCanaan Partner were joined by WuXi PharmaTech as well as existing investors BioAdvance, Mid-Atlantic Angel Group, Robin Hood Ventures and Delaware Crossing Investment Group, according to a company statement. It had raised over $3 million to date in seed and grant funding.
