If I could have any job in the world, it would be to be a full time angel investor. Angels get to meet super-smart people with cutting edge ideas, they work with other angels who have deep sector expertise and ask great questions, they are intellectually stimulated in evaluating and negotiating deals and they can make a lot of money.With all that going for it, you would think that everyone would want to jump onto the Angel investing bandwagon. In fact, more and more people ARE becoming Angels, now that organized Angel groups like Rockies Venture Club are there to make it easier, smarter and safer than in the past. Formal angel groups provide education to teach prospective Angels everything they need to know to analyze and invest in deals successfully. They also provide a community of like-minded individuals who benefit from the “wisdom of crowds” by sharing expertise and multiple critical viewpoints.
Angel investors get more involved than other high net worth individuals who may sign their portfolios over to professional money managers. Angels carve out a small amount of their assets to invest in high risk and high reward companies that might become the next Google, Facebook, Instagram, or WhatsApp. Colorado is producing startups in record numbers and five of the top ten
One thing that limits the current number of active Angels is the Securities Exchange Commission requirements that investors be “accredited investors.” This means that they either have assets of $1 million or more excluding their residence, or that they have income of $200,000 per year or more with the expectation of that continuing. In Colorado we have over 15,000 accredited investors, mostly on the front range, but just a few hundred of them are active Angels.
We can fix that.
Angels, entrepreneurs and others interested in learning about how Angel investing works are invited to the Angel Capital Summit, coming up next week, March 16-17 at the DU Davis Auditorium
26 early stage company pitches
We have a great line up of 26 companies pitching in a five minute pitch/five minute QA format. This is a rare opportunity to see so many companies pitch at one time and to be able to compare and contrast to pick out the best opportunities.
At Angel Capital Summit, the theme is Going Big, Scaling Up and Colorado Companies coming into their own. Here is some of the content you can expect to see:
tipping point: breaking out of obscurity
When companies get big, it often appears that their success happened over night. In most cases, however, companies work for many years before finding themselves in the limelight. What do the fast growth companies do that helps them to grow fast and to be successful? Successful companies have a hockey stick growth curve and at a certain point they hit their stride and rapid growth kicks in. Hitting that curve can be caused by many things including getting financed for growth, implementing a successful virality campaign, and sometimes just working hard and building a solid business. Learn from CEOs of Colorado fast growth companies how they grew their companies, what their struggles were and what factors ultimately led to their success.
growing big through m&a and rollup strategies
Companies can grow fast on their own, but sometimes having a fast growth strategy means combining forces with other strategically matched companies to achieve a whole that is greater than the sum of its parts. Small companies who are acquired by larger companies can benefit from the greater resources and economies of scale that being a part of a larger company can offer. Alternatively, companies can start acquiring other companies in a rollup strategy to consolidate competition within a market, to operate more efficiently at scale, or to become more valuable as an acquisition target or IPO candidate. In this panel we will hear from companies and investment banking professionals about how companies can develop intelligent M&A and rollup strategies to build overall value for their firms.
scaling strategies: how does it really work?
Angel investors always say that one of the criteria they use in choosing an investment is the company’s ability to scale. Companies that can scale can take their current model and apply it to bigger and broader markets with continuously lower cost of providing their goods and services. While it’s hard to scale professional services companies like law or architecture, tech companies with SaaS platforms have a marginal cost of nearly zero to add new customers. Companies that grow fast have the ability to add customers with increasing efficiency, but they also need to employ a host of strategies to achieve scale. These can include business development partnerships, HR and staffing, implementing advanced technologies, financial resources and strategies, building processes and accountability, and establishing and defending a strong brand and culture. One overarching theme in scaling is the executive team’s ability to think big and to execute. In this panel we will hear from leaders of companies at various stages of scaling, as well as the investors that back them.
There are an estimated 1000 family offices in the US, investing with portfolios averaging $50 million and up. Family offices often have investing guidelines that serve the needs of the family, be it preservation of capital, growth or contributing to social or environmental impact investments. Like individuals, family offices often dedicate a portion of their portfolios to “alternative investments” including angel and VC investments. While family offices are attracted to the average return of 27% on angel investments, there are also challenges in selecting companies, doing due diligence and managing these investments. In this panel we will hear from several family offices about how they view angel investing as a part of their overall portfolio strategy.
Early exits are defined as liquidity events for early stage companies within one to three years after the investment is made. Most angel and VC investments can take 5-7 years or longer to come to fruition and most investments that provide the huge 10-30X returns do indeed take longer. Angels are attracted to early exit strategies for the certain company types and industries where this makes sense. Rather than batting for home runs every time, they are doing very well, and some would argue that they can do better overall, by hitting consistent singles and doubles. In this panel we will discuss the benefits of pursuing an early exit strategy and what characteristics make a company an attractive early exit investment.
university startup challenge
We’re also doing a new event this year as a part of the ACS, it’s the University Startup Challenge. We’re taking the top teams from the business plan competitions at DU, CU Boulder, CU Denver, Colorado College, Air Force Academy, CSU and UNC and pitting them against each other in a pitch competition in which all of the entries are eligible for prizes and also Angel Investment right along with the other pitching companies. Colorado Venture Capitalists will be on a panel to do the judging, and Angels will be on hand to do the investing!
angel only event follows the conference
Finally, there’s an Angel-only meeting on March 18th where the Angels decide which companies they want to proceed with due diligence, negotiation and investment.
If you want to learn more about Angel investing, or want to meet Angels and Entrepreneurs, be sure to register for this year’s Angel Capital Summit.