How An Angel Financing Works

Ask The VC

Angels Finance 27 Times More Start-ups Than VCs

Angel Blog

Angel investors fund about 16,000 seed / start-up companies per year in the US - about 27 times more. Scott Shane makes an important contribution to our understanding of entrepreneurship, angel investing and venture capital in his new book Fool’s Gold published earlier this year. Fool’s Gold is based on solid academic research and debunks several myths about early stage company financing. In 2003, the Federal Reserve did a study on Small Business Finances.

VC Seed Funding Example: Trada

Feld Thoughts

My partner Seth Levine has a detailed post up today titled Trada – from the beginning that describes the creation and financing of Trada. Instead we quickly put our heads together about a financing (we like to say it was over beers, but the truth is more mundane – we hammered out the details in a 10 minute conversation in the conference room of the Foundry office). A few strategic angels were added to this round.

Are VCs Interested in Funding a Services Agency?

Ask The VC

Are there angels/VCs that would be interested in my services concept? While there was a rash of VC financings for web agencies in the late 1990′s, when the Internet bubble burst VCs were reminded that these are companies that – at best – end up being valued at 1x revenue based on the underlying economic characteristics of the businesses. But for now, most of these companies will have to rely on bootstrapping or angel financings.

PR 100

Convertible Debt Series

Ask The VC

As part of the experience of releasing the book, we’ve gotten the chance to interact with many new people interested in the venture capital and angel financing process. The most often requested additional topic that we don’t cover extensively in our book is the use convertible debt in early stage – especially seed stage – financings. We’ve been overwhelmed by the support for our book Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist.

Accelerator->Angel->VC flow is still struggling to find its equilibrium in India

VentureWoods

I had fun moderating the panel on early stage financing at India Internet Day. Too few deals are progressing from accelerators to angel, and from angel to Series A. Angel stage valuations are stretched relative to Series A valuations. At 20% success in getting to Series A, a Series A valuation of 35 cr would be a breakeven point for angels (7 cr angel valuation is typical). Angel to VC is another 2 years on average.

India 43

OnMedia NYC

Will Price

I will be speaking Wednesday on the OnMedia Venture Capital and Seed Financing Workshop - 10 am at the Lotus Suite. I will be in NYC this week for the OnMedia NYC conference. The conference looks like an interesting intersection of technologists, advertisers, and media companies.

TabbedOut Adds $3.7M

Austin Startup

While we have not seen the SEC filing, or an official statement from TabbedOut, TechCrunch is reporting today that TabbedOut has raised an additional $3.7M, perhaps as an extension of their Series A financing. Back in October we wrote about their $2M Series A, which added to their angel financing of $750K brought their total funding to $2.8M. Now with this additional $3.7M, their total financing is up to $6.5M.

SEC 20

Top free resources for startups

StartupCFO

Types of Angel Financing (Scott Edward Walker). Term Sheet Generator for Venture Financing (Wilson Sonsini Goodrich & Rosati), plus Antone’s commentary. Series Seed ” Financing Documents (Ted Wang) – , plus Antone’s commentary. Tags: Angels Getting Started Raising Capital Venture Capital law startup It took me a while to warm up to it but I am loving Quora more and more. There is a wealth of information and connections on it.

Don’t Make Raising Angel Funding Your Plan B

Early Stage Adventures

I wear two hats one as a general partner of a couple of seed stage VC funds, the other as an occasional angel investor. Wearing my angel-investing hat, I wanted to highlight an issue that I encourage founders to be careful about when pitching. There are variations on the theme, but essentially it’s a line that goes something like: “…we’ve talked to some VCs who are really interested, but they tell us we are too early for them to finance our round.

Don’t Make Raising Angel Funding Your Plan B

Early Stage Adventures

I wear two hats one as a general partner of a couple of seed stage VC funds, the other as an occasional angel investor. Wearing my angel-investing hat, I wanted to highlight an issue that I encourage founders to be careful about when pitching. There are variations on the theme, but essentially it’s a line that goes something like: “…we’ve talked to some VCs who are really interested, but they tell us we are too early for them to finance our round.

The Importance of Robust Angel Ecosystems

Seth Levine's VC Adventure

Earlier this week I gave the keynote address at the Colorado Angel Capital Summit. While the audience was Colorado focused, the overall message I delivered about the angel ecosystem is very relevant to all entrepreneurial communities.

Honest Tea TeaEO Seth Goldman: Dos and Don’ts of Raising Money From Angels

Campus Entrepreneurship

The piece offers his thoughts on Angel investing and how Honest Tea approached it. From the Inc piece, The Dos and Dont’s of Raising Money From Angels. First round of angel financing ($500,000). Second round of Angel financing ($1.2 Goldman explains the costs and benefits of Angel investors based on his experience and by doing so adds more life to the business plan. (I

This School's Alums Land the Most VC Funding

Inc Startups

Over two decades later, the company’s name--an acronym for Stanford University Network--could also apply to the investing practices of venture firms and angel investors. billion in angel financing or venture funding in more than 559 financing transactions.

Startup Capital: Feast or Famine?

Gust

Sources of Capital for Startup Entrepreneurs – The primary sources of cash for new companies are (1) self (the entrepreneurs’ resources), (2) government grants, (3) friends and family, (4) angel investors and Super Angels , (5) venture capitalists and (6) strategic investors. Let’s take a closer look at trends in government grants, angel investment and venture capital financings. It appears to me that there are about 100 Super Angels in the US.

SBIR 100

Start at the End - Your Exit Strategy - New Ventures BC Seminar Series

Angel Blog

Angel group syndication. Angel groups are now investing as much as $5 to 10 million in some companies. Angels finance 27 times more startups than traditional Venture Capital funds. Friends and Family investors invest much more than angels or VC funds.

Dodd-Frank Bill Signed by Obama: Aspects of Individual Accredited Investor Tests Altered

VC Deal Lawyer

Considering that most companies completing venture or angel financings seek transactional exemptions from federal and state securities laws under Rule 506 of Regulation D, and considering that selling only to “accredited investors&# under Rule 506 gives the issuing companies the broadest reach (e.g., Tags: Angel Investors Legislation Raising Capital On July 15, 2010, the U.S.

After the Angels

The Cornice

And so has angel financing. The biggest impact will be felt by those seeking angel financing. Angels tend to invest when they “feel” wealthy. Many angels tend to conduct less diligence than institutional investors and they also tend to offer less support. In fact, one day in to our new Wall Street order, I’ve already heard of angels pulling out of deals. business economics financing technology

Should Investors in the Same Round of Financing Ever Get Different Prices?

Both Sides of the Table

But Paul Graham really did have a point in his “ high resolution fundraising ” post – that there is a problem – particularly in angel financing – with herding cats. Since 2009 I have been counseling people to offer discounts to the first angel investors.

Knowledge Is Power: Convertible Note Financing Terms, Part V

Gust

As we conclude our convertible note financing series, there are assorted terms commonly seen in term sheets and deal documents that are worth touching on briefly. This is the norm for West Coast deals, but it’s often the case in dealing with East Coast investors (more commonly for VC financing rounds rather than angel seed rounds) that the lead investor wants its lawyers to draft the documents.

Knowledge & Networks Enabling More Youth Entrepreneurship

Ben Casnocha: The Blog

Silicon Valley-style entrepreneurship, practiced around the world, is hot.

Update on Director Compensaton - Executive Chairman Compensation

Angel Blog

In the fall of 2006, I did a director compensation survey for angel financed companies in my area. There is still very little data available on director compensations in small and medium sized companies.

With Angels Like These, Who Needs VCs?

Inc Startups

Ondot, a financial technology startup, tries to get to breakeven using only angel money. To do it all with angel financing is pretty much unheard of. Since then, the initial investors have re-upped and also brought on new angels.

[U.S.] Small Businesses Look To Hire In The Next Six Months: Pepperdine

YoungUpstarts

When it comes to seeking financing, small businesses say they are most willing to use bank loans as a financing option (70.7%), followed by angel financing (35.7%), private equity (28.1%) and venture capital (27.2%).

A "Rich-vs.-King" Approach to Term Sheet Negotiations

Altgate

Share and Enjoy: This entry was posted in Entrepreneurship , Venture Capital and tagged angel financing , entrepreneur , founder , fund raising , negotiation , startup , term sheet , venture capital.

Know Your Angels

Inc Startups

Angel investors frequently regret the investments they make. Just as their name implies, angel investors can come to the rescue of early-stage business ventures by supplying much-needed cash. It queried 100 angel investors in July.

Why Valuations are Ready to Tumble

Inc Startups

According to the Pepperdine report, the median pre-money valuation for a company receiving its very first round of angel financing is now $1 million, almost double the $550,000 valuation that same company would have been able to get a year ago.

Burn Rate vs Runway

StartupCFO

Being aggressive and increasing the probability of needing a bridge round is harder to do if you are angel-financed. Most angels don’t plan for reserves to bridge. Angels Growing Big Management Raising Capital Venture Capital Angel Burn Rate Fundraising mike cassidy XFire

VC Kay Koplovitz: 'Tell Them How You're Going to Make Them Money'

Inc Startups

What will help women founders seeking start-up financing? A couple years ago a study out of the University of New Hampshire Center for Venture Research reported that 21 percent of entrepreneurs seeking angel financing were women, and only 13 percent of those received investment.

Families Help Nurture Vanderbilt Entrepreneurs

Campus Entrepreneurship

Mitra points out that the free rent may have been worth up to $20,000 in angel financing? Great piece from Sramana Mitra highlighting two entrepreneurs that launched an educational software firm, Archipelago Learning, out of Vanderbilt. Mitra highlights the importance of supportive friends and families as founders, especially young ones, begin the process of building a sustainable business.

Answers to the 5 Most Common Angel Investor Questions

Growthink Blog

On Wikipedia, I found the word "angel" defined as "a supernatural being or spirit, often depicted in humanoid form with feathered wings on their backs and halos around their heads." While this might depict an "angel," it certainly is a far cry from the definition of an "angel investor."

Don't Make Raising Angel Funding Your Plan B

OnStartups

Chris is a seed stage VC and angel investor at CommonAngels. I wear two hats one as a general partner of a couple of seed stage VC funds, the other as an occasional angel investor. Pitch to angels as partners not just a means to get the VC round.

How to Find the Perfect Startup Job: Part I "Start with 'When'"

Genuine VC

Much of the VC blogosphere commentary about startups covers venture and angel financing with advice focused on company founders. The primary dimension on which startups differ is stage: two guys in a garage is definitely a startup, so is a thirty person company growing with a second round of financing, and so is a 250 person company preparing for an IPO.

Asking The Wrong Questions

Force of Good: a blog by Lance Weatherby

Will you become an angel following a successful exit? While I certainly don't know, I would say that in a typical deal that Imay leads they throw down $250k with the terms and grab another $500k from seven independent angels. The real questions you need to be asking yourself are how do I make this thing go without taking rather expensive angel financing when the value of my company is so low, how do I get a product, how do I get users.

1M/1M Strategy Roundtable: Top 10 Tech Trends To Watch

VentureWoods

The company is profitable and has so far raised only $400k in friends and family and angel financing. At this point, he can grow organically, and leverage channel partners and other creative modes of non-equity financing, and preserve equity as much as possible. We started this week’s roundtable with a discussion of the top 10 tech trends to watch for the upcoming decade.

Financing your business: Debt vs Equity

StartupCFO

So what I would like to do here is layout a more comprehensive framework for the pros and cons of debt versus equity and when you could look at each for financing your business. Therefore, this is often not the starting point for financing your business. Deciding how to finance.

Convertible Equity, A Better Alternative To Convertible Debt?

techcrunch.com

There has been no shortage of controversy and criticism around the convertible note, a popular investing vehicle that’s used by seed stage and angel investors. Ressi estimates that the debt note now accounts for over 50% of all angel and early stage deals. Startups. Mobile.

The 5 Key Stages of Equity Funding

Growthink Blog

Mezzanine Financing Most companies that raise equity capital and are eventually acquired or go public receive multiple rounds of financing first. Put everything else on your "wish list" to buy with revenues from sales or additional financing.

Startup Capital: Feast or Famine?

Angel Investing News

Sources of Capital for Startup Entrepreneurs – The primary sources of cash for new companies are (1) self (the entrepreneurs’ resources), (2) government grants, (3) friends and family, (4) angel investors and Super Angels, (5) venture capitalists and (6) strategic investors. Total angel funding in 2010 was up somewhat, but has ranged from $15 to $20 billion for several years. It appears to me that there are about 100 Super Angels in the US.

SBIR 40

Can You Raise Money This Year? These 3 Trends May Decide

Inc Startups

If you''ve received venture or angel financing, low interest rates have helped make your life a lot easier -- even if your company doesn''t have a drop of debt. Those big valuations flow downstream, encouraging angels and venture investors to be more generous when they value companies.