Calling All Angels: Experienced, Aspiring Angel Investors Confer in Cambridge

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very attractive investment returns, and for me personally, as a former entrepreneur-turned-VC, I gravitate to early-stage activities and am excited to work with people with a similar background, mindset, and experience.”

Andy Payne, angel investor, co-founder, FanSnap: “The place where the company starts has changed. It used to be going up to Bay Colony Center with 25 PowerPoint slides with two founders to get $5 million. The rock-star glory has moved to the company that starts with $200,000 or even self-funded founders writing code. What used to cost $2 million you can now do for $200,000. But now that you can do interesting investments for $200,000, we’re seeing a formalization or professionalization of that end of the market. It is going to be hard to be a casual angel.”

Phin Barnes, Principal, First Round Capital: “You can get from Philadelphia to New York two ways, on the express train (which might crash in between) or the local train. When you get to Trenton or Newark you can decide if you want to get off and live there, or keep going. As an angel, your responsibility is to help the entrepreneur figure out the ideal partners, and what does it mean each time they take capital. If you want to take a big swing, taking a lot of capital can make sense. If you want to maintain optionality, taking smaller amounts and working with angels can work.”

Mike Hirshland, General Partner, Polaris Venture Partners: “When you are starting a business that should be following the lean model, and you need a $500,000 round to get you to the next milestone, and you encounter a big VC and they are urging you to take more capital, even if it’s at a higher valuation, it means they have a need to put a certain amount of capital to work and you should run for the hills.”

John Landry, Founder, Lead Dog Ventures: “Since 1995, when I started this, I’ve done about 67 deals, with 33 in the current portfolio. I’ve had nine acquisitions. A lot of people think that here in New England we should grow companies larger, that acquisitions are not a good thing. Get over it. Bits rot. The bottom line is it’s perfectly okay to sell. There is a time and place for everything and the point is you go do it again. Recently we sold Doubletake, LogMeIn, Interwise, and Maven, and now we’ve invested in Blueleaf, Daily Grommet, Oneforty, and Sonian.”

Don Dodge, developer advocate at Google (formerly Microsoft), angel investor: “Angels invest in people they know, in businesses they understand, with investors they know and feel comfortable with, and where they can help. Here’s the trick: don’t invest when only one of these is true, or only two. All four have to be true, or your chances of success go down very fast.”

Angus Davis, founder, Swipely: “You can be a successful angel or entrepreneur here in Boston, but many of the successful exits are still happening through M&A, and most of the acquirers are based in Northern California. So understanding the macro-level trends there and the challenges they face is very important. You can be a successful investor in the 617, but you still want to have those 650 glasses.”

David Cancel, founder, Performable: “The problem is we are disconnected. The future entrepreneurs are not here in this room, or where you live. They are not in Nantucket or at your lake house in Maine or New Hampshire. They are in college. We need to find the kids who are sophomores and juniors. And we need to create a startup hub, focused around one very small area—within a two-mile radius of where we are right now. The institutional investors need to move out of Route 128 immediately. You can’t sit on Mount Money and whine about not seeing enough interesting deals. The folks we saw today from First Round Capital, they are not even Boston guys and I see them on the street in Cambridge more than the Route 128 guys.”

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Wade Roush is the producer and host of the podcast Soonish and a contributing editor at Xconomy. Follow @soonishpodcast

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7 responses to “Calling All Angels: Experienced, Aspiring Angel Investors Confer in Cambridge”

  1. Jean Hammond says:

    I did say “A lot of things are missing from the angel community here in Boston.” BUT in the context that Boston it already a winner in angel investing.
    Over 20 angel groups in New England maybe as many as 600 active investors (no other region except for Silicon Valley has more. (In these groups new angel investors can learn from experienced folks). We have training, efficient syndication going on in New England….
    entrepreneurs can find us and we grow a lot of companies.

  2. The “TechStars Boston 2010” yesterday was very exciting. The enthusiasm of the presenters and the crowd was palpable. The ACA New England Regional Quarterly Meeting was another interesting activity which previewed earlier in the afternoon. I was not able to attend the Angel Boot Camp; however, the reviews have been marvelous.
    As a result of the flurry of angel activity, there was an impressive flood of truly wonderful blogs. Don Dodge’s “The Next Big Thing”, Brad Feld ‘s “Feld Thoughts” and Xconomy’s are filled with superb thoughts and information. These blogs contain a wealth of “spot on” information garnered from “tested” sources. There is much to be learned here.
    One benefit of “angel investing “ touched on by some, but not emphasized, is the opportunity to meet great people and form associations. These associations oftentimes develop into relationships of respect, enjoyment and business deals– within and/or without the Angel Group. We can’t help ourselves. We meet great people and we want to do “stuff” with them. “They” may be the entrepreneurs or fellow members and most likely both.
    Obviously many deals are cut by relationships developed in clubs, churches, charities, social activities, and yes, Angel Groups. These are places where you can see the talented, if not the brilliant, interact. The interesting thing about Angel Groups is that they are a catalyst for capable, successful and probably “Well Heeled” individuals to get to know each other. The odds are that you will have trouble finding someone attending an Angel Group who is not interesting, and there is a good chance you will find many fascinating.
    It almost goes without saying that if you put good people together good things happen. Looking for feedback from an important member, I asked if he was finding value in his association with Boston Harbor Angels. He emailed succinctly, Saw some great deals, invested in a few. Met some wonderful people, made a few great friends. As the founder, it made my day.

  3. I’m with Jean. There are always opportunities for improvement in any complex ecosystem, but after spending time with angel groups from across the United States (and overseas) at the Angel Capital Association Annual Meeting in California last month, it is clear to me that Boston is near heaven for angels and entrepreneurs compared to many places; many would gladly trade their problems for whatever problems we think we have. We need to stop the silly comparisons to the Valley and stay focused on creating and funding innovation. That’s where the value lies – let’s dig it up, get it exposed to the light of day, and into the market. Go Sox.