Archive for December, 2011

Michael Green, Take It or Leave It

Posted December 5, 2011 By Frank

Play

Michael Green

Need money for your startup? Need it fast?

Tech Coast Angels has a new innovation in funding Seed deals; it’s called the “Take It or Leave It Convertible Note”. It’s a way to get really early deals off the ground.

Seed Track, it’s part of the mix of deals investors are often attracted to — by getting involved with really early deals, an angel can make a difference, or so the theory goes.

Seed deals don’t need much money to get moving, and that’s part of the allure, too.

At TCA there’s been a surge of interest in Seed deals over the past few years. Does it defy logic? Since the economic downturn in 2008, Seed deals have grown in popularity. Prior to that time, more conventional and slightly later stage deals were choking the deal funnel, so there was less interest in these earlier and riskier startups. But things changed…

The Convertible Note

Meet Michael Green, incoming President of TCA Los Angeles. We met recently when he announced a new innovation, the “Take It or Leave It” convertible note for Seed deals.

What’s the big deal?

“It’s not a secret that TCA, in the old days, was considered slow,” says Michael, “If we could add value, in a way that was good for the members, small bite size, and good for the entrepreneurs, and respond in 2 weeks or less with a check, … we could do some meaningful things.” That’s fast. “We got the first deal done in 51 minutes.”

To be successful as an angel investor you’ve got to have a large portfolio. How do these Seed deals affect your portfolio planning? And all deals come back for more money, so getting involved early — How will the ongoing cash requirements affect this part of your portfolio? How much dry-powder must you set aside in these cases? Michael has good answers.

Michael shares many of the details — like what’s the conversion cap? — but you’ll have questions so download the note.

Listen to Michael.

Play

All About Angel Investing, Part IV

Posted December 1, 2011 By Frank

David Barach, Bill Payne and Gary Phillips

We’re back for Part IV of this mini-series on angel investing. David Barach, Bill Payne, Gary Phillips and I discuss what every angel investor should know. This week’s focus: after the funding event.

No surprise, we spend much time on the many facets described in Basil Peters’ Early Exits. “It’s essential reading for every angel investor,” according to David.

If you haven’t already, start with Part I, or Part II, and Part III.

Show #358 Listen

Play

For further reading: see James Geshwiler’s recent posts on Reinventing the Board, Part I and Part II, on Xconomy.