Women make up the fastest growing community of angel investors and it’s changing the face of Angel Capital for the better.
Angel groups like Rockies Venture Club have been beating national averages for investing in women and minority led companies with 54% of our portfolio consisting of women and minority led companies vs a national average of just 14%. But in order to balance the ecosystem it’s important not just to invest in women led companies, but to engage women angels who can help mentor startups and who can gain experience serving on the board of directors of some of the startups they invest in, thus paving the way for increasing the number of women on corporate boards at all levels.
Research shows that companies with women on boards out perform those with no or few women. Companies wit
h the highest percentages of women on their boards outperform their less diverse peers by 66%. We have certainly seen these trends in our portfolio companies and are committed to developing further diversity in our community.
We have launched the RVC Women’s Investors Network (WIN), led by Barbara Bauer. The network has had several well-attended events that focus on angel education and making connections. The group is based on four principles that play on women’s strengths:
Engagement: Programs that allow people to work together and share wisdom of crowds to make good decisions and great investments.
Give Back: WIN members have years of business experience and they want to be more than just a check – they like to mentor and coach up and coming companies.
Act From Knowledge: Women like to understand the landscape before they jump in and invest. No more “fake it until you make it” – that can cost thousands for new angel investors!
Education: Classes, workshops and “get to know an angel” events provide deep venture capital knowledge to get WIN members up and going quickly and confidently.
If you’re interested in engaging with the group, volunteering, or just learning more, consider attending the WIN Luncheon at the Angel Capital Summit, Tuesday March 21 on the DU Campus.
Click HERE to register
If you’re interested in learning more about Angel Investing and Venture Capital, you should definitely attend the full Angel Capital Summit. Tuesday-Wednesday March 21-22 in Denver.
Click HERE for more information and to sign up.
Want to learn more about Rockies Venture Club? Check us out at www.rockiesventureclub.org
Impact Investing Night 2016: Keynote Speaker
Each Watson semester is an intensive fifteen week program in which scholars receive weekly mentorship and coaching sessions, free international legal support (through a partnership with Thomson Reuters), training in the hard skills and frameworks to take their ideas to the next level, and a community of peers that will last far beyond Watson. We aim to be the Olympic training ground for next generation change makers and you can expect the experience to be both challenging and fun. Below are four key elements of each semester. Speaker Eric Glustrom, Watson University’s founder, will be discussing how to measure the impact of an investment.
dBMEDx is a medical device company waging war against health-care acquired infections . We recently launched the BBS RevolutionTM, a next generation bladder scanner that battles both CAUTI and patient-to-patient transmission while delivering the quadruple aim of better outcomes, lower costs, more satisfied patients and more empowered providers. We are seeking growth capital to support our efforts to exit in 3 – 5 years. We have FDA clearance, CE mark, 5 patents and we’re generating revenue! Learn More Here
Intuitive Innovations delivers products and services for older adults that improve quality of life, independence and safety. Products combine technology and universal design that’s high tech on the inside, intuitive on the outside, and fashionable. Intuitive’s first product, the I Love You Band (I?U) comprises a watch, a PERS (personal emergency response system), and multimodal communication capabilities which collectively improve connectedness while providing peace of mind to loved ones. Learn More Here
Revolution Systems develops and sells the Revolution, a sorting line that is configurable, scale-able, self balancing and upgrade-able. Incumbent suppliers offer specially designed systems on a project basis that are elegant, but expensive and rigid. Revolution Systems’ focus on local communities and businesses, has resulted in an affordable system that can grow and adapt as the needs of the program change. Focus on smaller markets and creation of a flexible product allows us to achieve scale more easily than our competitors, reducing product cost to put recycling within reach of small communities and businesses. Learn More Here
Wave Solar is making an Impact with our Solar Steam Engine. A complete energy system for your home or small commercial building that provides electricity, heat, hot water and air conditioning, all from solar thermal panels plus natural gas. Given the back-up energy, the system will work in bad weather without storage, or work all night long as a back-up generator if the power grid is down. One percent of our systems will be installed for free in schools in third world countries. These systems will be reconfigured to purify dirty water into drinking water, provide a refridgation for a school, and run off garbage as a back-up energy source. Learn More Here
This event is available to be watched via livestream!
Venture capital is a great solution to many startups’ finance problems, but it’s often not the best solution and, even when it is the best solution, it often works best as a part of a suite of financial solutions rather than a silver bullet that solves everything in one move.
Venture capital, including angel investment, is the most expensive type of capital out there. So why would so many people be intent on going for the most expensive option when others exist? A typical VC is looking for a return of 60% or greater on their investment – compounded annually. That means that at three years they want 4X. At five years it’s 10X. At seven years it’s 25X and at 10 years it’s a whopping 100X return on investment. All of these are 60% compounding returns.
Venture capitalists need big returns to help offset their big risks. About half of their investments might result in a complete loss of invested capital, so they need to have investments capable of being home runs in order to pay for all the losers.
There are different ways to create a capital strategy for startups who want to both grow fast, but minimize dilution and reduce the cost of capital. Rather than using just one very expensive type of capital for their startup, they may use a suite of different sources that are appropriate to the phase of development.
Early Stage – Before VC
Early stage companies have many sources of capital available to them, even if they don’t know it.
SBIR (Small Business Innovation Research), Advanced Industries Proof of Concept and many other federal and state grants are available for early research and proof of concept. Often these are expensive research projects whose risk is much greater than can be justified even for venture capital. Startups that use these sources of funds can increase their value and decrease their technical risk without any dilution to the founders.
Another source of early stage funding comes from specialty service providers. Attorneys and CPAs will often defer compensation or work out an equity deal in exchange for early work. You might be able to get your patent filed for zero out of pocket costs using this kind of deal.
Companies that are in revenue have lots of new non-VC sources of funding available. Consider accounts receivable finance to cover your rapidly growing need of cash to carry AR through thirty to ninety days before it gets paid. Some lenders will even lend on purchase orders so you can get the capital you need to buy the components you need to build your product.
If your product is a SaaS (Software as a Service) platform, then your cost of goods is going to be people, not product. Consider using Equity Compensation for all or part of your payment to your developers. There are both individuals and development companies who will swap a portion of their compensation for equity. You’ll need to have a good handle on your valuation, but why not give equity directly to your developers rather than give it to VCs who give you cash which you then turn around and give to developers?
So, there are many more types of finance options available to you than can be described here. The main point to remember is that you are not required to use just one mode of funding. Look at all of the available sources and design a suite of solutions that provides the best solution to your situation.
To learn more about how to use creative funding along with venture capital, or instead of it, consider attending the RVC’s Colorado Capital Conference November 15-16, 2016. If you’re not in Denver on those days, you can register to participate in the conference via live-feed.
More information and registration at www.coloradocapitalconference.org
Peter is Executive Director of the Rockies Venture Club, Managing Director of the Rockies Venture Fund and teaches in the Colorado State University MBA Program. Peter is co-author of Venture Capital for Dummies, (John Wiley & Sons 2013) Available at Amazon, Barnes and Noble and your local book store.
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Rockies Venture Club has a monthly workshop entitled Pitch Academy. Pitch Academy takes entrepreneurs though the art of the pitch. Yes, it is an art. Slide formation, understanding what information needs to be included and general presentation are all touched upon. A key element of any successful pitch is the voice. The voice acts as a hook. Whether excited or coolly confident, the voice grabs, or loses, the audience. Regardless of product or visuals, if the voice is flat there will be minimal interest. Voice elevates a good pitch, to a great one.
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