Dave Berkus on Early Stage Boards (by Popular Demand!)

The National Angel Capital Organization was thrilled to host Dave Berkus as its keynote speaker at this year’s National Angel Summit in Halifax.  Mr. Berkus captivated the audience with his presentation on Building a Board for Early Stage Companies and also entertained the audience with his vast experiences in early-stage investing.

Dave Berkus presents at the 2008 National Angel Summit

Dave was kind enough to share his presentation to those who may want to review the information.  Please select the link below for a copy of the presentation:

Building the Early Stage Board of Directors – 2008 National Angel Summit.PDF

If you are interested in watching the entire presentation then you are in luck!  The entire keynote address was captured on video and can be seen here (final tab):

http://www.angelinvestor.ca/2008_Summit_Content.asp

In fact, all of the sessions from the 2008 National Angel Summit were recorded for your viewing and educational benefit.  Thanks again to all of our Summit participants, and another huge thank-you to Mr. Berkus for sharing his presentation!

Angel Links for 2008-10-22

• Canada, the VC ghost town
  Once upon a time, all I wanted to do with myself was work in VC. After spending time in Ottawa last week at the Ottawa Venture Technology Summit, in the midst of our current financial state, I am glad that I chose a different path.
  (tags: vc venturecapital angel)

Angel Agenda Profiled on BNN’s SqueezePlay

Both NACO Director David Pamenter, and Maple Leaf Angels Director, Rob Koturbash, were interviewed on today’s edition of BNN’s SqueezePlay.

For the entire clip, please follow the link: http://watch.bnn.ca/#clip105167

Enjoy!

Podcast from InNOVAcorp on the Basics of Angel Investing

On the October 16th episode of InNOVAcorp’s Business Over Brunch series, Maple Leaf Angels manager Rob Koturbash and NACO director Ross Finlay discuss the basics of Angel investing in a podcast you too can listen too!

From them you can learn how to approach an Angel investor and make an effective pitch, and pick up tips and advice from these two experts in the field.

InNOVAcorp

Investment Executive Notes NACO Name Change

Investment Executive, Canada’s newspaper for financial advisers, has raised awareness, through a recent article, of our name change from the National Angel Organization to the National Angel Capital Organization, as well as the reasons for it.

At the same time, IE noted our upcoming Co-investment Summit on November 19th.  The word is out!

Karras Hagglund, Bryan Watson, and James Black represent the new NACO sign!

Halifax Chronicle-Herald Profiles 2008 National Angel Summit

The daily newspaper in the host city of our 8th Annual National Angel Summit, the Halifax Chronicle-Herald, kindly profiled the event for their Friday issue.  CH business reporter Bill Power quoted NACO President Dan Mothersill and NACO directors Ed Alfke and Brian Lowe in his article, with a theme of hope for the future in troubled economic times.

We appreciate the recognition – thanks, Halifax!

Ed Alfke and Randy Thompson discuss the importance of international co-investment at the 2008 National Angel Summit

Smart Investing Gets Smarter at the 2008 National Angel Summit in Halifax

For immediate release

Toronto, October 21st, 2008 – Angel investors from across Canada, the US, and as far away as the UK, convened last week at the 8th Annual National Angel Summit.  This event, hosted by the National Angel Capital Organization, examined ways for Angels to invest more efficiently and effectively in troubled economic times.

This Summit addressed salient emerging trends in Angel investing, as noted below, ranging from building stronger board to engineering killer exits.  Participants delivered a wealth of experience, expertise and enthusiasm for the benefit of all delegates.

From the many topics served up by the three keynote speakers and the five panel discussions, many key insights stand out for special mention:

Building a board for early-stage companies (David Berkus, Keynote Speaker):  In the long run, the key characteristic of a good board is balance.  Neither investors, nor industry talent, nor management should dominate.  Before even creating a board, the CEO should decide if they are looking for advisors or governance – after all, a board can hire and fire, influence and control strategy, and reserve approval of the entrepreneur’s vision. But when outside investment is a must, so is a board with some power.

Vetting early-stage investment opportunities (Dan MacDonald of InNOVAcorp, Keynote Speaker):  Vetting of early-stage investment opportunities is more important than ever in this economic climate.  The key items that must be discussed are: People with relevant experience, energy, expertise,and collaborativity; a Market that is growing not declining; Barriers to entry for competitors, including IP, but going further than that into depth of expertise, etc.; and Fundability – the more capital is needed to launch, the better a risk it must be. In particular, Angel networks must remember to tap the expertise they have in vetting opportunities – often they don’t realize their members’ wealth of knowledge.

How the Enterprise Investment Scheme has worked in the UK (Permjot Valia, Keynote Speaker): The UK’s tax relief for income, capital gains, inheritance and investment losses go a long way to ensuring a vibrant and entrepreneurial economy, resilient to economic challenges and well-supplied with the risk capital it needs to grow.  In fact, recent estimates show that without the tax relief the EIS provides approximately 50% of Angels currently investing would not have done so, choosing instead less risky securities. The more realistic valuations resulting from the economic downturn can only increase the constructive effect of such encouraging tax policies.

Permjot Valia addresses the Summit delegation

Building international co-investment networks: The #1 thing co-investment does is reduce risk.  Furthermore, both the National Angel Capital Organization and the US Angel Capital Association list all Angel groups available, leaving companies no excuse for taking on capital risk.  Both organizations are approachable and helpful (Ed Alfke, Signalink Technologies).  Time and presence sets the stage for co-investment by allowing relationships of trust to grow (Cathy Favre, Director, Newfoundland & Labrador Angel Network).

The sustainability of Angel groups: Current economic challenges represent opportunities as well as risks for Angel groups; many Angels could plunge back into entrepreneurship for supplementary income, creating new opportunities for their fellow investors. At the same time, entrepreneurship may grow among workers let go by shrinking corporations (Frank Peters, www.thefrankpetersshow.com).  So even in bad times, there may be signs of hope and optimism.

Launching sidecar funds: Governments looking for new ways to stimulate real economic growth should seriously consider investment and productivity tax credits (IPTC), extant in five Canadian provinces and over twenty American states.  Best of all, they keep investor money in the jurisdiction (John Huston, Ohio Tech Angels).  The fund in British Columbia would not exist without such tax credits, and furthermore, a sidecar fund could do useful work even at a starting level of $500,000 (Mike Volker, Director, University/Industry Liaison Office at Simon Fraser University).

Engineering killer exits: If you can, sell your company when you don’t have to.  Then you can take your time, be objective about what is offered, and get the best deal possible (Marnie Walker, Maple Leaf Angels).  Also, an entrepreneur must have “double-vision”: clear grasp of the daily details of the business even as they safeguard the long-term possibility of an exit (Austin Hill, co-founder of Radialpoint).

Universities, technology and commercialization: The National Research Council’s Industrial Research Assistance Program officers will do anything to help Canadian small and medium-size enterprises (SMEs) develop and succeed (Tony Rahilly, Director, NRC-IRAP).  Likewise, university commercialization offices have a lot to offer businesses looking to innovate their way forward:  leading research, novel ideas, the best brais, infrastructure, grants access, and the freedom to try again and again (Dr. Ron Layden, Dalhousie University).  CEOs should not be shy about taking the initiative and having that first talk with NRC-IRAP and/or their nearest university commercialization office.

Thank you to everyone for making this year's Summit a success!

Full details are available on the NACO website, www.angelinvestor.ca.

“I am very proud of the accomplishments of the NACO this year,” said Daniel Mothersill, President, National Angel Capital Organization. “Our board members worked hard to ensure that this year’s 8th National Angel Summit was well-attended and well-sponsored from the moment the 7th Summit came to a close.  Our staff in Toronto also deserve approbation for working so hard to organize our events and to articulate our key messages to all those with a stake in Canada’s knowledge economy.”

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Media Contacts
Bryan Watson, NACO Executive Director
T : 416-581-0009
E : bwatson@angelinvestor.ca

W. Daniel Mothersill, NACO President
T: 416-581-0009
E: dan@angelinvestor.ca

National Angel Organization Changes its Name!

For immediate release

National Angel Organization Updates Name;
Reflecting the New Strength of Canadian Angel Investing

Halifax, October 17, 2008 – As of today, The National Angel Organization (NAO) will be known as the National Angel Capital Organization (NACO), with the name mark below:

Andrew Wilkes, Dan Mothersill, and Henry Vehovec unveil the new name

The new name is intended to better fulfill NAO’s mandate as Canada’s voice of Angel investors, by clarifying Angels’ increasingly vital role as the window for our capital markets upon Canada’s commercialization eco-system.

“This change reflects the recent development of Angel investing into an entirely new class of capital in Canada  – which is increasingly organized, formalized and effective,” said Dan Mothersill, President of the NACO.  “Angels here invest twice as much as venture capitalists, and create added value by providing mentorship and connectivity to new companies.  We want these facts better known as we make our case for the further development of Canada’s Angel investor community.”

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Media Contacts
Bryan Watson, NACO Executive Director
T : 416-581-0009
E : bwatson@angelinvestor.ca

W. Daniel Mothersill, NACO President
T: 416-581-0009
E: dan@angelinvestor.ca

Release on First Canadian Co-Investment Summit

For immediate release

First Canadian Co-investment Summit in Toronto
Bridges the Funding Gap
Registration now open for
Angel-invested companies and Angel investors

Toronto, October 9th, 2008 – The National Angel Capital Organization today announced Canada’s first Co-investment Summit to be held on November 19th, 2008.  This event will provide a forum for the presentation of high-potential investment opportunities to groups and networks of Angels from Ontario, Canada, and around the world.

When: Wednesday, November 19th, 2008 from 8 a.m. to 6 p.m.
Where: University of Toronto Faculty Club, 41 Willcocks Street, Toronto
Registration: Companies may apply to present, and Angel investors may register, at coinsummit.eventbrite.com

Angel-invested companies which have already received at least $200,000 in capital from Angels, or a term sheet for same, will present their opportunities to Angel investors and groups from across North America.

“The gap in the availability of capital for seed- and early-stage enterprises in this country, grown by the retreat of venture capital from this part of the market, must be addressed if Canada’s future prosperity is to be assured,” said Daniel Mothersill, President, National Angel Capital Organization. “Even deserving Angel-invested start-ups may fall short and wither down the road, unless Angels themselves conquer distance and come together to supply companies’ second-round growth capital needs.  Events like these are critical, given the high-touch character of this type of investing and the magnitude of the capital gap.”

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Media Contacts
Bryan Watson, NACO Executive Director
T : 416-581-0009
E : bwatson@angelinvestor.ca

W. Daniel Mothersill, NACO President
T: 416-581-0009
E: dan@angelinvestor.ca

News Release on the Detroit Co-investment Dinner

For immediate release

The Consulate-General of Canada – Detroit hosts
a Canadian-International Co-Investment Dinner and Angel Seminar

Detroit, September 10, 2008 – On the evening of September 10th, the National Angel Capital Organization, the industry association representing Angel investors and Angel groups in Canada, participated in the second ever Canadian-International Co-investment Dinner, hosted by the Consulate-General of Canada – Detroit in conjunction with Gowling Lafleur Henderson LLP.  In addition, a luncheon seminar on the same topic was hosted by the Consulate-General of Canada – Detroit in conjunction with Miller Canfield.

The goal of the dinner was to build stronger international relationships between the Canadian and US Angel communities, discuss the state of Angel investing, trade best practices, and network to encourage foreign direct investment into Angel-backed Canadian companies and help them expand internationally with a particular focus on the Great Lakes region.

The luncheon saw the presentation of a number of companies for possible investment, including two from Ontario, namely Environmental Waste International (Dr. Stephen P. Simms) and Streamlogics (Mr. Shaun McIver).  In addition, several seminars were presented on the topics of:

• Tax, legal and government incentive implications for cross-border deals;
• Perspective of a presenting company: going before the Angels;
• From Angel to Venture:  How they can work together and apart.

Attracting nearly forty Angel investors, high-net worth individuals who invest in early-stage high-risk ventures, and representatives of Angel groups from across North America and, indeed, the globe, the Co-investment Dinner was most productive.   By far the most discussed topic was the potential for increased returns and reduced risk arising from international co-investment between Angel investor groups in Canada and the US (specifically the Great Lakes region).

It was universally held that co-investment becomes possible when a local Angel group has invested in the opportunity, has conducted due diligence according to standards agreed throughout the Angel community, and when the Angel group invested in and sponsoring the opportunity would monitor the local investment.

“Angel investors are achieving and working with common standards that allow them to work together,” says Dan Mothersill, President of the National Angel Capital Organization, “allowing collaboration and co-investment between Angel groups as never before. Angels are now able to raise significant rounds of financing for their investee companies, replacing the large capacities of Venture Capital which of late has withdrawn from early-stage financing”.

As the Angel capital industry has formalized over the last decade, with facilitated Angel groups forming across the globe, the barriers to co-investment have fallen away, creating an exciting opportunity for Angel groups and their investee companies across North America.

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Media Contacts
Bryan Watson, NACO Executive Director
T : 416-581-0009
E : bwatson@angelinvestor.ca

W. Daniel Mothersill, NACO President
T: 416-581-0009
E: dan@angelinvestor.ca

Batten Down The Hatches: Portfolio Company Advice

Over the past week I have seen a flurry of notes from Angels and VCs to their portfolio companies commenting on the recent economic instability.

The message echoed by all: Batten down the hatches! Review your budgets. Make the cuts you need to. You may not get another round of financing in the near future.

Two such groups that have sent out messages advising their portfolio CEOs of some of the steps they might take to weather the economic storm they are going to face for what many have estimated will be at least the next 18 months, are Sequoia Capital and angel investor Ron Conway.

Ron noted, in an article with TechCrunch, that the current situation is much like that in 2000. So much so, that he simply dug out the e-mails he sent then and circulated them again. The advice:

The down draft in the stock market sends us some obvious “signals” and we can’t help but mention them.

1. If you are in a funding cycle, you should raise your funding as soon as possible and raise as much as possible.
2. Many companies are ignoring certain VC leads we’ve provided in order to concentrate on the top tier only. While we have preached that in the past, this is no longer the case. Currently, top-tier VC bandwidth constraints, coupled with the market down draft, make it very important to take meetings with any VCs where you can get their attention. We have been working hard to open up this new bandwidth.
3. You must aggressively examine and pursue M&A opportunities (unless you have over 12 months of cash reserves!) ro insure you have critical mass (including funding, customers, rolodex power, market share, cash, synergy, etc.).
4. Be realistic on valuations – they will fall so be ready and willing to co-operate.
5. Look for corporate partners to invest so you can raise more money. You should also consider a sale of your company to your corporate partners.
6. If you are entering a funding cycle start raising money sooner rather than later.
7. While it’s safe to say entrepreneurs have had negotiating leverage with the “down draft” in the market, the VC community will start exercising their leverage.

I highly advise you to read the full TechCrunch article that goes into much greater detail.

The second group whose advice I think it important to convey is Sequoia Capital. They sent around the slide deck that you can find at: Sequoia Capital on startups and the economic downturn

The most important piece of advice here, I think, is manage what you can control, including your spending, your growth assumptions, and your earnings assumptions.

Companies everywhere have a hard path ahead of them over the coming months (years?). Only those that can create real value, and reach breakeven by stretching their pennies razor thin will flourish in an environment such as this. Can all of your portfolio companies do this? If not, perhaps it is time for some gentle advice on how they can reposition to face the current economic conditions.

Angel Investing in Troubled Times

We are facing some very interesting times. The Canadian VC community has significantly decreased the amount it is investing, especially at earlier stages. The public markets have experienced a (not unexpected!) collapse. Angel investors are now one of the last sources of capital for companies, but how are they reactiong? Listen to the Frank Peters Show to find out!

What does the market meltdown mean for angel investors? Will they keep writing checks or sit on their wallets? And how will they protect their recently funded portfolio companies now that the world economy has changed?

These are the issues angels and entrepreneurs want to hear about. Has the pendulum swung too far? Have angel investors been so heavily impacted that the terms for entrepreneurs who do get funded will become too onerous?

After a week like last week, many angels will be recalibrating their risk tolerance. Certainly valuations will drop, but what other impacts will affect angel groups?

Today, a special episode of the show that draws in Dave Berkus and Dan Caulfield of the Tech Coast Angels, Bill Payne of the Vegas Valley Angels and the Frontier Angel Fund in Whitefish, Montana, and Steve Mock, founder of Giftventure, as the token entrepreneur.

Angel Links for 2008-10-09

• Angel Investor Ron Conway Emails His Portfolio Companies Over Financial Meltdown
  Ron Conway, one of Silicon Valley’s most prolific angel investors (and he was also an early investor in Google), wrote an email yesterday to the CEOs of his portfolio companies. In no uncertain terms he outlines a bleak immediate future, and gives advice to his startups.
  (tags: angelgroup vc startup funding entrepreneur economy angel business downturn venturecapital tips techcrunch startups siliconvalley ronconway)

Dr. Ian Sobieski Featured Panelist at 2008 National Angel Summit

The 2008 National Angel Summit and the National Angel Organization welcome Dr. Ian Sobieski as a featured panelist.

Ian Sobieski

Dr. Ian Sobieski is a founder and managing director of the Band of Angels Fund, L.P., a $50M venture fund raised in 1999 exclusively from major institutions, and has helped lead the Band of Angels since 1997.  Dr. Sobieski is also a founding board member of the Angel Capital Association and an appointed Lecturer in the Center for Entrepreneurship and Technology at the University of California at Berkley teaching a course on Entrepreneurial Finance.

Dr. Sobieski will be speaking at the 2008 National Angel Summit on October 16th during the Tools and Techniques for Launching Sidecar Funds panel session where he will describe the steps required to launch a successful sidecar fund that will support Angel investments.

To secure your seat at this event, please visit http://2008summit.eventbrite.com/

More more information on the Band of Angels, visit their website at http://www.bandangels.com/

See you in Halifax!

Angel Links for 2008-10-06

• Lessons from Prague | Business Angel Blog
  Readers of Business Angel Blog will realize that I was in Prague recently looking at companies to invest in. The trip was organized for me through the BBAA www.bbaa.org.uk as part of the EASY program.

  Many of the companies that were pitching, were based in the IT space. A point to note for other companies looking for angel investment in the IT space in the ‘West’ is that your valuations need to reflect the valuations that your competitors (for funding) elsewhere are asking for. The beauty and the problem about the IT space is that it can now be based anywhere in the world. Why should angels pay for start up costs such as salaries and rent in central London or New York when they can invest in a similar business in Central Europe or China?

  (tags: coinvestment international angel permjotvalia)

Austin Hill, Summit Panelist, in The Globe and Mail Report on (Small) Business

Austin Hill, notable entrepreneur and Angel from Montreal, has recently been interviewed by The Globe and Mail Report on (Small) Business regarding the way of entrepreneurship.

Austin’s words of wisdom are quotable and educational – click through to read his recipe for the secret sauce of entrepreneurship!  We’re proud to have his participation on our 2008 National Angel Summit panel about Killer Exits, and we can all look forward to meeting him in Halifax!

Austin:  (Great entrepreneurs) walk into a restaurant and they can’t help themselves: Could you franchise this model? How can we make the service better? We rip each other’s businesses apart and learn. The minute an idea starts, you can’t help but think what to do next.

Angel Investors Become Foremost Funders of Commercialization

For Immediate Release

Angel Investors Become Foremost Funders of Commercialization;
National Angel Summit in Halifax Underscores Leadership Role in Recovery

Halifax, October 3, 2008 – The National Angel Organization’s (NAO) Angel Investor Summit will take place from October 15th to October 17th, 2008 in Halifax. As the nation’s top investors in early-stage companies, Angels are displacing venture capital in the development of Canada’s future employers and world champions, and are continuing to grow companies in the midst of market upheaval.

The Summit attracts Angel Investors from across Canada and around the world.  Panels convening at the Summit will discuss:
1.    Building International Co-investment Networks
2.    Sustainability of Angel Groups
3.    Tools and Techniques for Launching Sidecar Funds
4.    Engineering Killer Exits, and
5.    Universities, Technology, and Commercialization

In addition, the Summit boasts a number of world-class speakers, including: Dan MacDonald, CEO of InNOVAcorp; Frank Peters, Angel and podcasting host of TheFrankPetersShow.com; Permjot Valia of the United Kingdom Enterprise Investment Scheme Association; and David Berkus, Managing Partner of Kodiak Ventures LP and author of Extending the Runway: Leadership Strategies for Venture Capitalists and Executives of Funded Companies.

A full agenda is available on the NAO website, www.angelinvestor.ca.

“In the current economic climate, Angel investors have become the primary source of commercialization capital,” said W. Daniel Mothersill, President, National Angel Organization. “If our start-ups are to become Canada’s world-class employers of the future, we must ensure their access to the capital they need to grow.  That means forming Angel groups, establishing side-car funds, and fostering co-investment:  organizing Angels on a regional, national or even international basis to invest together in the most significant high-potential opportunities.”

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About Angel Investors
Angel Investors are individuals who invest their own money in start-up companies, often providing business expertise that contributes to the success of young companies. Because Angel Investors typically invest at an earlier stage of growth and provide more business guidance than venture capital providers, Angel Investors are essential players in generating high growth companies essential to regional  economic development and Canada’s economic competitiveness.

About the National Angel Organization
The NAO (www.angelinvestor.ca) is the Canadian voice of Angel investors dedicated to promoting best practices and advocacy for Angel investors. The NAO provides Angel investors with a secure environment to network and learn from their peers, as well as the opportunity to be heard collectively on national issues.

Media Contact
Jennifer Ayotte
T: 902-209-4704
E: jayotte@impactcommunications.ca

Ross Finlay of First Angel Network Writes about Due Diligence

Ross Finlay of the First Angel Network of Halifax, Nova Scotia, a co-chair of the 2008 National Angel Summit coming up next week, has written a fine article for Atlantic Business Magazine on the process and benefits of doing your due diligence on a potential investment.

We recommend it!  (There’s a handsome sketch of Ross too!)

Dan MacDonald Kicking-off 2008 National Angel Summit

The National Angel Organization is pleased to introduce Dan MacDonald as the Breakfast Keynote Speaker at the 2008 National Angel Summit in Halifax on Oct. 16th, 2008.

Dan MacDonald is president and CEO of Halifax based InNOVAcorp.  Joining InNOVAcorp in May 2005, Dan brought to the role more than 19 years of high tech business building experience with companies such as Nokia, Vienna Systems, and Mitel.  Prior to InNOVAcorp, Dan was vice president of global marketing for Nokia Enterprise Solutions and an original member of the division’s senior management team, driving the delivery of many of Nokia’s market leading Internet security and mobile connectivity systems.

Dan MacDonald

As the Breakfast Keynote Speaker, Dan will be speaking on the topic of “Vetting the Early Stage Investment Opportunity”

Please visit http://2008summit.eventbrite.com/ to order your ticket for the 2008 National Angel Summit in Halifax, Nova Scotia from Oct. 15th – 17th.

For more information on InNOVAcorp, please visit their website at http://innovacorp.ca.

See you in Halifax!