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Angel Investment: California Leads in Deals and Dollars

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On March 8, The Angel Resource Institute, Silicon Valley Bank and CB Insights released the first Halo Report, which analyzes early-stage investments by angel investment groups. Of particular note: In 2011, California accounted for 21% of the deals and 29.8% of the funds invested.

Other noteworthy findings: (more…)

WSJ: Angel Investors are Getting Harder to Sell

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In an article published today (Chasing the New Angel Investors), the Wall Street Journal discusses why entrepreneurs must work ever-harder to persuade angel investors to invest.

According to the article, although seed and startup angel investment has increased, there are several reasons why that money is more difficult to attract:

  • Since the recession, many angels have become more demanding, looking for proof of marketplace acceptance rather than a hunch that it exists.
  • Angel groups, which syndicate deals among their members, have a more-formal review process that may involve discussions by dozens of potential investors.
  • With less venture capital available, angels are more concerned about whether a company can grow to profitability or a successful exit.

The article’s advice for entrepreneurs: Have something to show, know your business thoroughly, and polish your pitch.

Dana H. Shultz, Attorney at Law? +1 510 547-0545? dana [at] danashultz [dot] com
This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact a lawyer directly.

WSJ: Super-Angels Fill Funding Gap

Many startup companies are betwixt and between when it comes to funding: They need too much for angel investor groups, but too little for venture capitalists. According to the Wall Street Journal (‘Super Angels’ Alight), there is a new breed of investor that fills the gap, the “super angel”.

What makes these angels “super” is their ability to attract other investors. Whether collaborating with one another informally or through recently-formed funds, they can invest $1 million or so and be satisfied with an exit a few months to a few years later.

Dana H. Shultz, Attorney at Law  +1 510-547-0545  dana [at] danashultz [dot] com
This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact a lawyer directly.

WSJ: Startups can Pitch to Angels for Free

In an article published today (Start-Ups Get Free Chance to Pitch to Angel Investors), the Wall Street Journal discusses ways that startups can pitch to angel investors without having to pay a fee.

Thrust of the article: Some angel investment groups require that entrepreneurs who need funding pay for the right to present their businesses for consideration. Organizations fighting the “pay-to-pitch” approach include Open Angel Forum and AngelList.

Check out all posts about angel investors.

Dana H. Shultz, Attorney at Law  +1 510 547-0545  dana [at] danashultz [dot] com

This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact a lawyer directly.

What You Need to Know about Angel Investment Groups

Burton Lee, Director and Engineering Lecturer at Stanford University, recently posted informative slides from a presentation by Laurie Lumenti Garty of SVB Capital and Marianne Hudson of the Angel Capital Association.

The subject: Angel investment groups in the U.S.

Here is some of the most important information presented in the slides:

  • There are more than 300 angel investment groups in the U.S.
  • They tend to invest in companies that are in product development or are already shipping product.
  • Major investment sectors include IT, health care, and business financial services.
  • The vast majority of the investments are $500,000 or less.
  • Groups tend to co-invest with, or look for follow-on investments from, other angel groups, individual angels, and early-stage venture capitalists.

If you are seeking angel funding, you should look at the entire slide deck.

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Related post: Realistic Financing Options for Startup Companies

This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact an attorney directly.