links for 2009-06-28

• Scott Frazier Named the 2009 Utah Angel Investor of the Year, Greg Warnock Named the 2009 Utah Business Mentor of the Year
• "Winning with Private Equity" , Author Paul Anthony Thomas
  Karen Rands, the Compassionate Capitalist, will talk with Paul Anthony Thomas, author of "Winning with Private Equity", as they discuss the "9 Pitfalls of Private Equity". Paul Thomas, a 30 year veteran of private equity and value investing, recounts several of his hard learned lessons in this easy read. Having been mentored by a 50 year veteran of the venture capital and private investing world, Mr. Thomas’ experiences cover a wide variety of topics including: Motivation, Proper Capitalization, The Right Attitude, Hedging and a Workable Exit.

links for 2009-06-26

• Why Less Is More for Startups
  A company running on a tight budget will perform far better than a company that has gotten a chunk of cash from VCs.

links for 2009-06-25

• Angels finance 27 times more seed and start-up companies than VCs | Seed and Startup Funding
  It’s amazing how many entrepreneurs think venture capital funds are the primary source of funding for seed and start-up companies. VCs only fund 400 to 600 seed or start-up companies per year in America. Angel investors fund about 16,000 seed / start-up companies per year in the US – about 27 times more.

Spring 2009 Canadian Co-Investment Summit Featured in Ryerson’s News

Our latest Co-Investment Summit was recently profiled on Ryerson’s News and Events page:

http://www.ryerson.ca/news/news/General_Public/20090615_Angels.html

We thank the Ted Rogers School of Management again, particularly Dr. Steven Gedeon, who co-chaired the event and presented the Canadian Angel Capital Top Five awards, for their help and hard work to make this event a success!

links for 2009-06-19

• Utah Angel Investor of the Year | Paul Allen
  On Tuesday, June 23rd at the Hilton Hotel in Salt Lake City, FundingUniverse will be announcing the first ever Utah Angel Investor of the Year award winner.

  The top 15 finalists for this award are Alan Hall, Craig Earnshaw, David Carter, Gary Williams, Hal Widlansky, JD Gardner, John Richards, Kent Thomas, Kyle Love, Mark Madsen, Martin Frey, Nobu Mutaguchi, Robert Kunz, Scott Frazier and Warren Osborn.

links for 2009-06-18

• Only Idiot CEOs Pursue VC Investments – SiliconValleyWatcher
  That's how one of the many CEOs that contact me recently described his colleagues who submit to Venture Capital (VC). (A bit inflamatory but worth a read)

  This alternatively funded CEO describes other CEO's that seek VC funding as idiots — with a 1 in a 1000 shot at a lousy valuation (52% Round A, 25% Round B and 15% Round C). He continues that many of the serial entrepreneurs trumpeted by VC's have no money themselves despite "successful" previous exits.

  (tags: vc Venture capital ouch)
• Madrona, Amazon.com invest in online slide-show maker Animoto – Puget Sound Business Journal (Seattle):
  Madrona Venture Group usually likes to stay close to home when it makes an investment. But the Seattle venture capital firm made an exception with its latest bet.

  Madrona is leading a $4.4 million venture round in Animoto, the fast-growing New York startup that has developed an easy way for people to create interactive slide shows from personal photos. Amazon.com Inc. (NASDAQ: AMZN) of Seattle, iStockphoto founder Bruce Livingstone and angel investor Jeff Clavier also participated in the deal, which brings total funding to about $5 million.

• EcoDog Angel is Former Utility CEO
  EcoDog, a Vista, CA-startup developing a “watchdog” device to help consumers monitor their electricity use, inaugurated its plans to raise $5.6 million in angel funding today by naming its first angel investor. CEO Ron Pitt, who founded EcoDog in his garage four years ago, told me Tom Page, the former chairman and CEO of San Diego Gas & Electric and its corporate parent Enova (now Sempra Energy) made an undisclosed investment in the startup. Pitt says he developed the FIDO Home Energy Watchdog system, which is installed at the breaker panel to monitor energy consumption on every circuit. The device also uses the home’s own electrical wiring—and not the Internet—to send recommendations for conserving energy to the homeowner’s computer.
  (tags: cleantech angelinvestor)

links for 2009-06-13

• peHUB » New Venture Firm #432875982: Founder Collective
  Throw yet another name on the list of new venture firms. Eric Paley, a former IDG Ventures senior adviser, has started Founder Collective, a seed stage venture firm based in Somerville, Mass. The firm has raised $24.39 million, according to an SEC filing, but Paley told Xcomony that the pot has inched closer to $30 million since filing.
  (tags: vc)

links for 2009-06-11

• 6 Questions: One-on-One with Jacques Bernier, head of Teralys Capital Fund | Innovation | Canadian Business Online
  When Caisse de Dépôt et Placement du Québec announced that it was launching a new venture capital fund — along with the Fonds de Solidarité FTQ, and the Quebec government — people were understandably excited, especially when they found out that Teralys Capital Fund, headed by Jacques Bernier, would be infused with $750 million of capital, making it the largest fund of its kind in Canada.

  In terms of fund of funds the work is typically the same in theory. The difference between all of us isn't much, though we will be in a better position because we're by far the leader in terms of size. But there is a small fund called Montreal Start Up that is interesting. It was created by people in the Internet world, with roughly 20 to 25 angels. They invest in seed rounds for Internet companies. The interesting part is having angels around that have a lot of experience in the Internet world — they're helping companies quite a lot.

  (tags: angel vc Quebec fundoffunds)

Angels, Exits and the VC Model

Business Week recently ran an article entitled, ‘Super Angels’ Shake Up Venture Capital, which examined the ever-changing seed-stage investment market. There has been much talk over the last year about the VC model, trying to determine if it is a model that still works for early-stage investment. Many have argued that it doesn’t and that, “as large VC firms cut back, a hungry bunch of seed-stage investors are helping entrepreneurs get their ideas off the ground” instead.

Even faced with a financial world aflame, Kopelman and a wave of new investors are running straight for the fire. It may be bravery or foolishness, but they’re funding startups and entrepreneurs at a time when almost everyone else is holding back. In the latest sign of conflagration, venture capital investment plummeted 61% in the first quarter, to $3 billion, the lowest level since 1997. Only $169 million of that went to companies seeking their first round of venture money, what’s known as seed-stage investments.

Basil Peters, the Canadian seed-stage investor that managers the Angel Fund, Fundamental Technologies II, recently released a book on one facet of the early-stage investment climate as well. In his new book, Early Exits, Peters examines the Angel exit in contrast to the typical VC exit.

This book is about the large number of other exits – the ones that are not driven by the VCs. Exit opportunities have changed dramatically in the past few years. Today, it’s more likely that a company will be sold without ever having an investment from a venture capitalist.

With the drop in VC investment in Canada, one cannot help but wonder if the model does need an overhaul, especially with respect to seed-stage investments.

Until such time as the dust settles on the VC model debate, you can rest assured that the Angel community in Canada remains active, as demonstrated at our recent Co-Investment Summit.

A Successful Webinar on Cross-Border Investment

In co-operation with Gowling Lafleur Henderson LLP, Cooley Godward Kronish LLP, and the Angel Capital Association of the US, the NACO hosted a webinar Wednesday June 10th on the subject of Cross-Border Investment: What Angels Need To Know To Invest in Canada.

Participants included:

• Bryan Watson, National Angel Capital Organization
• Al Browne, Partner, Cooley Godward Kronish LLP
• Alan James, Partner, Gowling, Lafleur, Henderson LLP
• Lanis Anthony, Saskatchewan Angel Investors Network (SAINT)
• David Verrill, Founder, Hub Angels and Chair, ACA Collaboration Committee
• Matey Nedkov, Director, NACO and Member, ACA Collaboration Committee

Podcast recording of the Webinar

The 14MB podcast of the webinar can be downloaded from this link in mp3 format.  The slides are here.

links for 2009-06-10

• Global Trends in Venture Capital: 2009 Report | United States – Deloitte LLP
  This year, we obviously hit a nerve; we received 725 responses – almost double the number compared to last year. The respondents are general partners of venture capital firms with assets under management ranging from less than $100 million to greater than $1 billion. The responses of venture capitalists around the world were illuminating. And the good news is that you will find that while the investment community is coming to grips with the hard realities of this global recession, they remain a resilient group and even an optimistic one. You’ll learn which sectors they believe offer prime opportunities and what countries are the most intriguing to them. It’s been a tough season for investors and entrepreneurs alike but that may have strengthened the industry. As Mark Heesen, president of the National Venture Capital Association (NVCA), said, “The tourists have left.”
  (tags: vc angel globalsurvey)
• Contrary to popular belief, the venture capital industry is not a necessary condition in driving high-growth entrepreneurship, according to Right-Sizing the U.S. Venture Capital Industry, a new study by the Ewing Marion Kauffman Foundation.
  Contrary to popular belief, the venture capital industry is not a necessary condition in driving high-growth entrepreneurship, according to Right-Sizing the U.S. Venture Capital Industry, a new study by the Ewing Marion Kauffman Foundation. While venture capital will continue to be crucial to some forms of high-growth companies, the report concludes that the sector’s size must be reduced to be viable. The venture industry has seen stagnating and declining returns coupled with rapid expansion in venture capital assets under management in recent years.
  (tags: vc industry shrink angel kauffman)
• VCs face 'Darwinian contraction' – TechFlash: Seattle's Technology News Source
  This is hardly a surprise. A new survey released today indicates that the majority of venture capitalists plan to reduce the number of companies they will invest in this year, while just 13 percent plan to increase the number of companies in their portfolios.

  The results of the 2009 Global Venture Capital Survey — conducted by Deloitte Touche Tohmatsu and the National Venture Capital Association — come as the venture industry adjusts to what NVCA president Mark Heesen described as a "Darwinian contraction" brought on by the recession and globalization.

  (tags: vc deloitte decline survey darwin)

REMINDER: NACO Survey of Canadian Angels for Industry Canada

This is just a friendly reminder that, if you have not yet completed our survey of Canadian business Angels’ investment activity from 2000-2006, or referred it to others who could respond, then we need you to do so as soon as possible.

Thanks to the feedback we’ve received so far, the survey is easier to do than ever, requiring only a 2-minute commitment of time at most for each of your investee companies. All you need to do to make this happen is:

A) Complete the survey form reached through this link for each of your investee companies: http://www.angelinvestor.ca/Investees_Survey.asp

B) Pass this link along to all your fellow Angels so they may also participate in the survey and benefit from its results

To protect your privacy, only company information (and not the investor’s names) will be transmitted to Industry Canada and only aggregated results will be reported on by Industry Canada. Remember, this survey will raise awareness of your vital role, as an Angel investor, in Canada’s economy.

Should you have any questions, technical difficulty, feedback, or desire for the overall results, please don’t hesitate to call our Communications Manager, Paul Connor, at 416-581-0009. Thank you!

Cleantech Angel Network – Investment Breakfast (June 25th)

The next Investment Breakfast, our last until September, will be hosted at Gowlings at First Canadian Place.  We anticipate this will be our best-attended, and most exciting event yet – so please reserve your spot today!

There is no charge for this event, however space is limited, so please reserve your space via the RSVP button below (http://cleanangelnetworkjune09.eventbrite.com/):

(Please note that this event is open to accredited investors only and approved partners)

For entrepreneurs, we are now accepting business plan submissions.  To submit a company application, simply follow the Angelsoft link on our homepage at www.cleanangelnetwork.com – June 10th is the deadline to apply!

Any questions or comments? Please call us at 416.840.6970, or send us an email at info@cleanangelnetwork.com.

_ _ _

About Cleantech Angel Network:

Cleantech Angel Network is an Angel group focused on investment opportunities in early-stage sustainable technology and renewable energy companies.  Our mission is to help capitalize Ontario’s best and brightest early-stage cleantech companies while providing our Angel group members with satisfying and high-quality investment opportunities.

Maple Leaf Angels – Investment Dinner

Maple Leaf Angels’ end of season Investment Dinner is taking place this Wednesday, June 10th at the Royal Canadian Yacht Club.

The formal meeting complete with updates and company presentations will be starting at 4:00pm followed by cocktails and dinner afterwards.  If you are interested in learning more about the Maple Leaf Angels, and attending one of our events, this is a great opportunity.  Please sign up early as space is limited.

Event details and registration is available at: http://mapleleafangels.eventbrite.com

Tom McKaskill: Invest to Exit

Exits have become a very hot topic, for obvious reasons, in the international Angel investor community over the last year. Canada’s own Basil Peters recently released a book on the topic, titled Early Exits: Exit Strategies for Entrepreneurs and Angel Investors (But Maybe Not Venture Capitalists). I have just received my copy, but from what I have read so far I am quite impressed.

Over the weekend another book on Angel investor exits came to my attention, put out as a free eBook by Dr. Tom McKaskill, called Invest to Exit – A pragmatic strategy for Angel and Venture Capital Investors.

This book provides a detailed examination of the investment and exit opportunities in financial and strategic ventures. Underpinning the creation of value in both of these ventures are the drivers of high growth potential… The major recommendation in the book is that Angels and VC investors should focus on strategic value investments. These investments have very focused exit strategies which generally have lower execution risks, shorter timescales and higher returns than financial trade sale exits or IPO exits.

The book provides a detailed analysis of the product or service characteristics which create strategic value, a set of guidelines for identifying strategic buyers and processes for setting up the investment deal and the strategic sale.

The focus of both of these books reinforces the fact that Angels need to focus on exits, the more strategic the better, from the very earliest stage of due diligence and investment . Hopefully, with the guidance of both of these books, both Angels and entrepreneurs will enjoy “more successful, more frequent and more profitable exits“.

Streamlogics & Maple Leaf Angels Appear in Financial Post

Congratulations are due to Shaun McIver, Chief Executive of Streamlogics (which won a Canadian Angel Capital Top Ten award at the First Canadian Co-Investment Summit), and Rob Koturbash, Managing Director of Maple Leaf Angels, both of whom were quoted in an article in today’s Financial Post.

The article, titled Get Back to the Future, talks about how strategic planning can position companies to become leaders when the bad times pass.   “I don’t think our game plan really changes that much, whether we are in good times or challenging times. The disciplines we have put in place will serve us well in either situation,” says Shaun McIver in the article.

Streamlogics, an Angel-backed company, is a leading global provider of webcasting applications and services to more than 500 enterprises, government agencies and associations.

Webinar on Cross-Border Investment Issues scheduled for June 10th

On Wednesday June 10th from 1 to 2 pm, the National Angel Capital Organization (NACO) and Angel Capital Association (ACA) will co-host a one-hour webinar titled Cross-Border Investment: What Angels Need to Know to Invest in Canada.

If you are looking for US Angel capital or are a US Angel investor interested in Canadian opportunities, register today at http://coinvestwebinar.eventbrite.com!

This webinar will address issues related to investing in high-potential Canadian companies, and present methods of structuring investments into such companies, to ensure investors retain as much of their return as possible!

Agenda:

1. Introduction
2. Cross-Border Investment Issues
3. Suggested Structures for Investment in Canada
4. Case Studies and Q&A

Speakers will include:

1. Al Browne, Partner, Cooley Godward Kronish LLP
2. Alan James, Partner, Gowling, Lafleur, Henderson LLP
3. Lanis Anthony, Saskatchewan Angel Investors Network (SAINT)
4. David Verrill, Founder, Hub Angels and Chair, ACA Collaboration Committee
5. Matey Nedkov, Director, NACO and Member, ACA Collaboration Committee

http://coinvestwebinar.eventbrite.com/

links for 2009-06-06

• Venture Capital’s Elders Say Think Small – Bits Blog – NYTimes.com
  Venture capitalists who began investing in the 1960s have seen the industry transform any number of times. Their advice to today’s venture capital firms: think small.
  (tags: angel Venture vc, capital capital,)

links for 2009-06-05

• Is Canada Too Small for VC? « Carried Interest.net
  The Canadian VC industry is collapsing because the domestic VC funds have tried (been compelled by their institutional investors) to build portfolios by solely investing in the “best” Canadian companies. How can you succeed when you can only choose to invest in the best company in a relatively small region when American VCs have a broader selection of talent and opportunity? You can’t and that is why the returns have been dismal.

links for 2009-06-04

• Bill would expand angel-investor deduction – West Michigan Business News
  Legislation pending in Lansing is designed to breed more angel investors in Michigan at a time when the need for capital has never been greater.

  The bill, passed by the state House in March, would amend Michigan's Income Tax Act to expand a deduction from gains made on equity investments in new companies that meet the state's "cutting-edge technology" definition — advanced automotive, manufacturing and materials; alternative energy; homeland security and defense; and life sciences.