EnablingAngels - The business of Angel Investing

Nov 7	EnablingAngels "On Leave" Dan Smith November 7, 2006 Know More: About EnablingAngels, Author Profile 2.0, Author Profile We’re sorry, but EnablingAngels.com is currently “on leave” and inactive. However, please enjoy the existing valuable articles about angel investing. Thank you! Posted at 4:55 PM \| Permalink
Aug31	Valuation Panic, Part 2 -- For Angels Jeff Jordan August 31, 2006 Know More: Best Practices 2.0, Best Practices In my previous post, I advised rookie entrepreneurs not to give their valuations to angel investors in elevator pitches because angels almost always jump ship when they hear a valuation that is too high. On the flip-side, angels shouldn't immediately rule out a promising company just because the entrepreneur's valuation is a little high. The entrepreneur's valuation of the company is the beginning of a conversation (a.k.a. negotiation), especially when they throw it out during an elevator pitch. Be patient with first-time entrepreneurs and take the time to educate them. I've seen too many angels miss out on smokin' deals because they shut their ears off way too early in the conversation. What do you think? Posted at 11:34 PM \| Permalink
	Valuation Panic, Part 1 -- For Entrepreneurs Jeff Jordan August 31, 2006 Know More: Best Practices, FundingUniverse.com, Raising Money from Angels 2.0, Raising Money from Angels I listened to ten entrepreneurs give ten 4-minute pitches ten times to ten tables of angel investors at a FundingUniverse.com Speedpitching Luncheon the other day. (Feel free to go back and read that last sentence again. It was the best I could do.) Before the event, I had the opportunity to advise each entrepreneur and give them feedback on their presentations. Several of them included their pre-money valuation in their pitch. I advised them not to. Here's why: Most of them were rookie capital-raisers with absolutely no idea how much their company was worth and no math to back up their assertions. Angels see through that. You can ruin your chances of raising capital by throwing out a huge valuation when you're talking to angels who are used to writing $150K checks for 15% equity. It may put you at a disadvantage in your valuation negotiations. In many cases, it's good to have the angel suggest the first valuation. When you only have four minutes to pitch, you're primary goal should be to get a follow-up meeting with the angel. Rather than throwing out your valuation, say something like, "That's an important question that deserves a detailed answer, and right now I don't feel like we have adequate time to discuss it thoroughly. Why don't we meet later this week to talk about it. My office or yours?" Several of the entrepreneurs didn't follow my advise and, based on my conversation with the angels, ended up turning off otherwise interested angels. If you are an experienced entrepreneur who has raised capital, and you can come into meetings with angels with a little swagger, that's a different story. Today my friend Paul Allen told me about an entrepreneur with a great track record who does just that every time he raises money. With first-time entrepreneurs, his story is the exception to the rule. So, if you're a first-time entrepreneur giving an angel your elevator pitch, hold back on the valuation. Posted at 10:55 PM \| Permalink \| Comments (3)
Aug23	Desert Angels Heat Up; Devin Thorpe's Ten Tips Jeff Jordan August 23, 2006 Know More: Angel Investing 2.0, Angel Investing Regrettably. a few major projects at FundingUniverse.com have kept me from "getting my blog on" lately. I'm glad to be back in the saddle. A couple of interesting links: Arizona's CopperKey gets $2M from Desert Angels, HOTventures and Others -- HOTventures' Rick Gibson is a stud. He did a series of podcasts for us at FundingUniverse a while back. Valuable stuff ... Devin Thorpe has been blogging a top ten list of how to get money to chase you. Here's a link to the first way to make it happen. Great content for entrepreneurs raising money. Fred's Cliche of the Week struck a cord with me. He makes a good point, but commenters point out exceptions to his rule. Posted at 3:05 PM \| Permalink \| Comments (2)
Aug12	Piedmont Angel Network Drops $1.3 into Bioptigen Jeff Jordan August 12, 2006 Know More: Angel-funded Companies, Leading Entrepreneurs 2.0, Leading Entrepreneurs Newly appointed PAN interim managing director Troy Knauss got his feet wet this week, leading a $1.3 million dollar investment in Bioptigen, a company that "is developing a new class of optical imaging systems for biomedical applications that can see inside the body". Troy sounds like a stud. He was CEO of Knauss Foods from 2001-2005 and lead the company to $40 million in sales and enjoyed a fat exit. Now he's leading one of the nation's top biotech angel groups. Here's the head-scratcher: Troy is an MBA candidate at Wake Forest. Why would someone of Troy's accomplishment feel the need to get an MBA? Look for an EnablingAngels interview with Troy in the near future. Posted at 9:48 AM \| Permalink \| Comments (3)
Aug10	How to Listen to a Pitch Jeff Jordan August 10, 2006 Know More: Best Practices 2.0, Best Practices Marc Nathan of the Houston Angel Network (Little known fact -- HAN is one of he nations three largest single branch angel groups.) sent me a great article on the art of watching a pitch. I've sat through quite a few pitches with quite a few investors, and many, I'm afraid, need to pay attention to points 4 and 6 in the post: "Focus on the Problem and the Solution" and "Be Courteous an Polite". I've seen too many angel investors use techniques to try and get the entrepreneur out of his or her comfort zone -- looking down at the floor, checking emails on the Crackberry, impatiently looking at their watches, interrupting with outlanding questions, etc. -- all in the name of finding out what the entrepreneur is made of and discovering how he or she reacts under pressure. Sure, being cool under fire is important, but if you focus your energy trying to make some one fidget, you're obviously focusing on the wrong thing. Posted at 9:34 AM \| Permalink \| Comments (7)
	Chad and Brad say this is a Good Article Jeff Jordan August 10, 2006 Know More: Angel Groups, Raising Money from Angels 2.0, Raising Money from Angels Chad Blodgett emailed this story to me and Brad Feld blogged about it. I'm guessing it's worth reading. David Cohen writes a thoughtful article about how angel investors make decisions to invest. The underlying theme is that many angels rely a great deal on impressions and connections to evaluate investment opportunities -- as opposed to venture capitalists who can't afford to spend other people's money based on gut feelings. Quick warning: Even though angels aren't as rigorous with their due dillegence as other investors, don't fool yourself into thinking angel investors won't rip your business to pieces. However if you follow the principles that David points out you'll be in a great position to impress angels when you meet. Thanks for the tips fellas! Posted at 12:27 AM \| Permalink \| Comments (3)
Aug 9	Two Significant Events for Female Investors Jeff Jordan August 9, 2006 Know More: Angel Groups 2.0, Angel Groups Milwaukee-based Silicon Pastures named Theresa Esser its new executive director. Theresa joins a small handful of women who are leading angel groups, a fact that she calls both "significant and interesting". Congratulations Theresa! In addition, the largest women's investment group in the U.S. made its first investment this week. The Texas Women Ventures Fund dropped a cool million into KARLEE, Inc., "a woman-owned provider of customized integrated manufacturing services for diverse industry sectors, including medical, semi-conductor, telecommunications, nuclear and defense." Nice work ladies! Posted at 11:59 PM \| Permalink
Aug 5	You might be an entrepreneur if ... Jeff Jordan August 5, 2006 Know More: Entrepreneurship 2.0, Entrepreneurship A little entrepreneur trivia ... The Ewing Marion Kauffman Foundation has done some research on what makes an individual more likely to be entrepreneurial, and here's what they found: You don't need to be a college grad, well-organized, or driven by money to be an entrepreneur. You're more likely to be entrepreneurial if You're left handed You're an immigrant You were self-employed by the time you were 20 One of your parents were self-employed for a long time You're the oldest child in your family You have two or more children You have been fired more than once Posted at 7:42 AM \| Permalink \| Comments (5)
	The Angel Journal Jeff Jordan August 5, 2006 Know More: Angel Investing, Resources for Angels 2.0, Angel Investing The Genesis Exchage is taking a stab at creating a regular publication for angel investors called The Angel Journal. Are there any other angel publications/newsletters out there that we should know about? Posted at 7:03 AM \| Permalink

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Lynn Braver on Three Questions with Laura Roden, Managing Director of The Angels' Forum
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