I wrote a check today, the first one in quite a little while, for a new startup here in Orange County. I’ll share more details about the company and its great promise in an upcoming post, after the deal closes.
Am I a bellwether of a new season of confidence in Southern California?
Why wasn’t I writing checks earlier?
Let’s take stock…
In reverse order, I wasn’t writing checks for new startups in part because I have a large portfolio of early-stage companies and many of them came back for more money last year in pay-to-play rounds. I had to allocate funds to participate in merit-worthy rounds or else, in most cases, I’d be converted to Common and diluted up to 90%; that’s an incentive. I didn’t participate in all of these rounds; I said goodbye to at least two of my deals thinking I’d rather invest in something new.
So why didn’t I?
Archive for April, 2010
Member Led Deals
By Frank | Filed in Commentary/OpinionAllan May, Life Science Angels
By Frank | Filed in Angel Investing
Allan May founded the Life Science Angels in 2005 with Casey McGlynn and Greg Scott. As the name implies, they are a niche-focused angel group.
Show #286 (18:35) Listen
- Good morning Frank, #1: This meeting in SF looks very inviting. Your interview participant Alan May looks like he has entered ...
- very interesting and informative. Mannie from Beijing
Austin Entrepreneurs
By Frank | Filed in Video
Watch my presentation in Austin at the Texas Funding Symposium, hosted by Hall Martin and the Central Texas Angel Network. Video courtesy Joshua Baer.
Who Wants To Be A Deal Lead?
By Frank | Filed in Letter of the WeekHi Frank,
A provocative question for you, but one that’s emerged from talking with a lot of angels:
Why on earth should an individual angel ever choose to lead a round?
Here in the UK, it seems to be that all the angels left in the game are finally realising that their typical historic exposure to individual investments (say, $50K) is simply too high in anything other than outright boom-time. While it’s nice to dream that any individual investment is going to turn out to be an Amazon or eBay, realistically the beta for all of them is just too high for anything less than a portfolio of (say) 12+ investments to make sense.
All of which means that a typical non-hyper-rich angel should put no more than $30K into any one investment target. But at that low level, is it ever really worth the hassle of leading a round?
Abandoning John May
By Frank | Filed in Commentary/Opinion
New York UPDATED
I got out Sunday, but John’s there til Wednesday. He was connecting through Munich, that’s what screwed up his return plans.
We were all talking about our combined misery, this volcanic black swan that has many of my colleagues from the EBAN Congress in Istanbul unable to get home, not right away anyway. John Mactaggart was the first to react; he’d changed his itinerary from west to east and would escape through Dubai into Australia and get home before his original plan. I was reluctant to start over reacting, perhaps things would settle out by Sunday. That’s my nature; I’d play it cool.
You Suck at Term Sheets
By Frank | Filed in Commentary/OpinionMy sister texted, had I pocket dialed her? Maybe I had, so I enthusiastically called her back. “What’s new with you?” Well, I’m doing a webinar on term sheets in half an hour. “Term papers?” No, the agreements angels make with entrepreneurs when they invest in their companies. “Sounds boring.”
Indeed. As we say goodbye she suggests, “when you have a dry topic, have a little fun with it. Re-title it ‘You Suck at Term Sheets’”. Who could argue with that logic? Her brainstorm comes from the infamous “You Suck at Photoshop” video series, “they’re informative, but style-wise, it’s like going to one of those restaurants where the waiters treat you like crap”.
Hmmm… I didn’t think there was time for re-branding, but her input raised my spirits. I was now up to the task! And why not? I had a dream panel: Katherine O’Neill, JumpStart NJ, Michael Gruber, Cornerstone Angels, David Rose, NY Angels and James Geshwiler, Common Angels. That’s a lot of experience, an embarrassment of riches!
And whattya know? It was great! But you missed it. Don’t miss the next one in the ACA Syndication Webinar Series: Due Diligence. I know, sounds dry…