Archive for the ‘Angel Investors’ Category

Basil Peters has a great single-page term sheet

March 4, 2008
If you’re an angel negotiating with a company OR a company heading towards an angel-based round, you should have a quick peek at Basil Peters’ one page term sheet. It’s chock full of good ideas about how to come to an agreement without huge legal bills.

The site is worthwhile for other reasons, too. It has a lot of well-thought-out content that will be very helpful to both investors and startups.

November 1, 2007 | Registered CommenterThe Startup Guy

Red Herring says Angel funds out-perform VCs

February 28, 2008
In a posting today , Red Herring reports organized angel groups had an average 27 percent IRR, as opposed to VC firms, which are usually in the mid-teens.I think the study is generally accurate, but I do note that one of the sponsors was the Angel Capital Education Foundation.

What does this mean for us here in Alberta?

Well, the vast majority of funding in Alberta is angel money. We have very few active VCs in the province. Most of the angel investing here happens under the radar, and most of it is oilpatch-related. It’s not uncommon to see 4 ol’ oil buddies get together and put money into a new through-the-web SCADA scheme or some such other oilpatch-related idea.

Most of these “shadow” investments are very successful. I don’t have scientifically-gathered numbers, but my running “head count” says these deals are extremely successful, and generate an IRR better than the ones noted down south. I don’t have real numbers because most of these deals are completely invisible.

But it does tell the tech entrepreneur something: you have to be exceptionally clear and focused in order to compete with that kind of thing. Since you’re most likely working in an area outside the domain knowledge of the “shadow angels”, and since you are probably competing with ‘patch-related deals for the same dollar…. You get my drift. You’re going to have to be clear, focused, and exceptionally good at demonstrating the profitability of what you propose to do.

If you want a hand with this, let me know. Tuning presentations is one of the things we do best at CTI.

November 14, 2007 | Registered CommenterThe Startup Guy