commonangels Maia Heymann

Maia Heymann, senior managing director at CommonAngels Ventures.









Sara Castellanos
Technology Reporter- Boston Business Journal

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The startup investing group formerly known as CommonAngels closed on a new $26.5 million fund this week and unveiled its new name: CommonAngels Ventures, a nod to its new hybrid investment model.

The investment group is comprised of about 60 active Boston-area investors who collectively invest in early-stage startups in the Boston area and also provide mentorship, expertise and connections for startup founders.

The new CommonAngels Ventures IV fund succeeds the group’s third $13 million fund.

“We’ve combined the best of what experienced industry experts as investors bring to startups with a dedicated pool of capital of a venture fund,” said Maia Heymann, the fund’s senior managing director.

CommonAngels Ventures has seen some major successes recently, including the sale of one of their portfolio companies, two-year-old Boston-based moviemaking mobile app startup Directr, acquired by Google in August.

The fund’s other portfolio companies include Boston-based clean energy startup Loci Controls, Techstars Boston graduate Wymsee, whose software is used by creative design departments on movies and TV shows, and Boston-based marketing software firm BlueConic.

Heymann chatted with me about the new fund in an interview Thursday.

Q: How many companies do you hope to back with this fund?

We expect we’ll back a total of 28 to 30 over the life of the fund. We’ve already made 10 investments, since the first closing of the fund was last October. The first round of investment is anywhere between $250,000 to $750,000 and then we reserve for follow-on funding.

Q: What areas will Fund IV continue to invest in?

We’re a software-focused fund, but software touches everything. There’s not a vertical or industry it doesn’t touch now. We tend to gravitate toward software that’s riving efficiencies or driving revenues, very broadly speaking. There’s another category of software also that is next-generation, exponentially better than the prior generation, (and we) also invest in enterprise application software, ranging from Wymsee to Loci Controls.

Q: The investment group is now known as CommonAngels Ventures. What’s the reasoning for that?

The (hybrid angel investing and venture fund) model is resonating with our investors. The reason we chose to move towards a fund model is it’s better for the entrepreneur. The entrepreneur gets one large check from the fund, and our capital came from our angel investors who are all industry veterans, all current or former operators in tech and software specifically. The entrepreneurs still get the benefit of that and they still get all the connections and the network that our investors bring to bear. One of the reasons why switched to this model is because this is a much more attractive place for exceptional entrepreneurs to view us differently. There’s room for different business models within venture and this is representative of that.

Q. You set out to raise about $20 million for Fund IV and you exceeded that. How does that feel?

No doubt we’re excited, this is another significant chapter in our evolution and representative of how we’re “institutionalizing” in the good sense of the word. It’s all about filling the capital gap.

Q: Will you be investing primarily in Massachusetts companies?

We go beyond Massachusetts when there’s a compelling connection. We have four companies in New York City and two companies in Canada. We’ll follow a great entrepreneur who we know well, or if there’s very strong connection, maybe one of our investors is also going on the board. Broadly speaking, we’re focused mostly on the Northeast corridor, but there’s such richness here (in Massachusetts) with the opportunities here in the greater Boston area.



Article source: http://www.bizjournals.com/boston/blog/startups/2014/10/maia-heymann-on-unveiling-commonangels-ventures-a.html?page=all

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Exit goal alignment crucial in angel investing, visiting
US expert says

By Fiona Rotherham

Oct. 16
(BusinessDesk) – Acronyms abound in the business world –
think GFC, Ebitda, Opex, Libor, OCR. Now visiting American
angel investor John Huston has added a new one – EGC. It
stands for exit goal congruence and means the investor’s
desire to eventually sell the company and make a return is
matched by that of the entrepreneur.

It’s the most
important thing for any angel investor to consider before
they commit their money, he said. Huston became an angel
investor in 2000 after retiring from a 30-year career in
banking and founded the first Ohio TechAngel fund in 2004
with 50 investors. It later became a founding member of the
US Angel Capital Association.

Speaking at today’s 7th
annual New Zealand Angel Summit in Auckland, Huston said he
invested only in tech companies in his home state because he
liked to know the entrepreneur who he would be making rich.
He said goal alignment with the entrepreneur was key to
achieve his aim of putting between US$3 million to US$5
million in the pockets of that entrepreneur once the company
was sold.

“I want to get my money back so I can help
other entrepreneurs,” he said. There was more benefit to
the local community to have 20 entrepreneurs make US$5
million each who then infect others to have a go than
putting US$100 million into the hands of one entrepreneur,
Huston said. He pointed to the wealth created in accounting
software company Xero by outside investors that could have
helped many other small companies.

His favourite of the 50
angel investments he’s made is an ecommerce company that
sold for US$19.7 million within 22 months. “The return
wasn’t large but the two co-founders, one was Indian and
the other Chinese, those two families shared US$10 million
of the US$19.7 million. They can send their kids to any
college they want or buy a ski house or a boat. It will have
a profound impact on them.”

Catherine Mott, the founder
of Blue Tree Allied Angels in Pittsburgh, said there needed
to be a “champion” for each company angel investors put
money into. Her fund has invested US$30 million in 46
companies in the Pittsburgh area.

Her key advice to
would-be angels is to diversify, have patience and do good
due diligence before committing money.

“You need someone
who can create and build a good due diligence team. One
person can’t do proper due diligence alone which is why
they join a group and tap into many people in the group who
can efficiently perform due diligence,” she said.

The
former banker said that lead investor may or may not sit on
the board if the investment goes ahead as that could require
different
skills.

(BusinessDesk)

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When I started my first company, Bio-Storage Technologies, back in 2002, raising angel capital was time-consuming and inefficient, and the results were mixed at best. We were, however, fortunate to find a few angel investors who had the ability and confidence to invest their capital and experience to help us launch.

Today, BioStorage is a global leader in the bioscience sample management business. Since our origins, angel investing in Indiana has made significant progress as evidenced by recent reports; however, our state has much to improve to become more competitive with neighboring states.

According to the latest Halo Report published by Angel Resource Institute, Indiana might have an opportunity to seize more mind share and more deal flow.

Of the top 10 U.S. angel investor groups, two are in Texas, one is in Arizona, another in Connecticut, and the top group is in Seattle. Only two are in California and one is in Boston.

Of even greater interest to Hoosier entrepreneurs, the Great Lakes region—defined by the report as Indiana, Illinois, Michigan, Ohio and Wisconsin—had the second-highest number of deals/investments in the first quarter of 2014, with 17.1 percent, just 0.6 percent behind California.

More impressive is the fact that the region generated nearly 25 percent of total investment dollars during the period. California came in at 16.7 percent and the Northeast at 11.5 percent. We Midwestern angels must be doing something right to be posting these numbers.

Yet, Indiana’s angel investor groups remain low-profile and our accomplishments relatively unsung. This, despite groups like HALO in Indianapolis surpassing the $20 million investment mark over the last five years and my own group—VisionTech Angels, which has chapters in Bloomington, Indianapolis, Lafayette and Warsaw—investing more than $6 million in 12 companies in less than five years.

Other groups, like Elevate Ventures, have also spurred capital and talent formation around the state and play key roles in this ecosystem.

Many states have recognized the value of angel investors and the potentially significant impact on business and job creation. A growing number of states, including Maryland, Arizona, Connecticut, Georgia, Nebraska and New Mexico, among others, have implemented attractive tax credits for angel investing.

Here in the Midwest, Minnesota provides a 25-percent credit to investors or investment funds that put money into startup companies focused on high technology, new proprietary technology, or new proprietary products, processes or services in specified fields. The maximum credit is $125,000 per person and non-Minnesota residents are eligible.

Minnesota’s angel tax credit program is so popular that it has already exhausted the $12 million set aside for the program in 2014, and the set-aside for 2015 has been increased to $15 million.

And what of Indiana? Indiana offers a 20-percent tax credit for Indiana resident angel investors who make investments in qualified Indiana companies. Indiana recently doubled the maximum allowable credit per company.

However, the credits still have significant limitations that make it less desirable for investors outside of the state to invest in Indiana startups.

Awareness of angel investors and what we bring to the table ultimately falls on our shoulders. We need to educate the business community, universities, entrepreneurs, lawmakers, media and potential investors on our value proposition for this ecosystem.

We also need to accept and note our failures and, most of all, recognize that this is a very real part of innovation and early-stage investing. Risk and failure go hand-in-hand with startups (more than 50 percent fail) and many valuable lessons are to be learned and shared among our entrepreneurial community.

We are making progress. Last July, VisionTech Partners and the Indiana University Kelley School of Business co-sponsored the Innovation Showcase’s educational session on angel investing, attracting 300-plus attendees. The Innovation Showcase, which featured almost 75 entrepreneurial pitches, had some 850 attendees.

Despite the hurdles, Indiana is moving toward a more dynamic capital ecosystem where angel investors play a key role. Successes by angel-funded companies like ExactTarget, Endocyte, Angel Learning and Aprimo have created wealth for investors and jobs for Indiana, and sparked a flurry of entrepreneurial activity.

Let’s keep it going and break angel investing in Indiana out of the shadows and into the forefront.•

__________

Moralez is managing director of VisionTech Partners and VisionTech Angels, an innovation consulting and angel investing group. Views expressed here are the writer’s.

Article source: http://www.ibj.com/articles/49988-rankings-of-indianapolis-area-banks

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As an entrepreneur, I’m fascinated by the myths that people tend to believe. Somehow, entrepreneurship has built up a mythology that is founded upon legend, anecdotes, movies, and who-knows-what else.

Here are few of those myths.

Myth #1: Entrepreneurs don’t quit

Whoever came up with this idea that quitting is bad, and that entrepreneurs don’t quit?

Quitting is what makes an entrepreneur an entrepreneur.

First, most entrepreneurs have to quit their day job in order to become an entrepreneur. That’s the crucial quitting point.

Most entrepreneurs I know have also quit some entrepreneurial venture. If an entrepreneur starts a crappy business and knows it, then she’s going to quit.

Elon Musk quit. Steve Jobs quit. These people are rockstar entrepreneurs, but they stepped in and out of jobs. This completely shatters the myth of the entrepreneur who never quits.

Successful entrepreneurs need to quit sometimes.

There’s nothing wrong with quitting something stupid. Let go of it. True success is knowing what to quit and when to quit.

Let’s get rid of this stigma that “entrepreneurs never quit!” and maybe we’ll see some entrepreneurs finally break free of their shackles, and start some companies that succeed.

Myth #2:  Entrepreneurs know exactly what they want, and how to get it.

Maybe some entrepreneurs have a laser-focused goal and a clear plan for getting there.

But that’s not normal. In fact many entrepreneurs have no clue how to achieve their entrepreneurial passions.

Entrepreneurship is a process of trying, failing, trying again, and succeeding, trying again, and trying again.

Many times, entrepreneurs just don’t know what to do. They follow their gut, but that’s hardly a plan.

Myth #3:  Entrepreneurs are their own boss.

Nobody is their own boss. Everyone has someone they report to.

Let’s dispense with the idea that someday you’ll be an entrepreneur in complete charge of your entire existence.

In many cases, your business becomes your new boss. It’s ruthless, demanding, heartless, requiring 15-hour workdays, and zero vacation time. If you are running a consulting business, your clients are your boss. If your startup gets funded, your investors become your boss.

So much for the no-boss paradise.

Oh, and while you’re at it, entrepreneurship is not necessarily going to produce a utopian work-life balance, either.

Myth #4:  Entrepreneurs have to be connected.

Have you heard this saying? “It doesn’t matter what you know; it matters who you know.”

To succeed as an entrepreneur, do not believe that.

Then how do you explain first-generation immigrants who comprise a huge percentage of entrepreneurs? Immigrants often come to a new country with no connections and no network. They are more likely to become successful entrepreneurs.

Unconnected entrepreneurs formed the business-building backbone of the United States. The same legacy endures for modern entrepreneurs as well. Sergey Brin (Google Google), Liz Claiborne (Claiborne), Andrew Grove (Intel), William Mow (Bugle Boy), Andy Bechtolsheim and Vinod Khosla (Sun Microsystems), and Jerry Yang (Yahoo!) are just a few of the foreign-born entrepreneurs who started huge businesses that everyone recognizes.

Entrepreneurs who realize that connectedness is a myth are forced to rely upon their own grit and determination, not some star-studded safety net. That powers them forward to start companies, and successfully run those companies.

Myth #5:  Entrepreneurs are usually rich.

Nope. Some entrepreneurs might become rich, but they certainly don’t start that way.

In fact, even once the business is up and running, entrepreneurs aren’t the fat cats that most people think they are. According to a study from American Express in 2013, the average salary of the entrepreneur was $68,000. SimplyHired pegs the annual income of an entrepreneur at $111,000.

That may be rich by some standards, but it’s not enough to support the private-jet posh lifestyle. By contrast, some fresh MBAs are being handed $200k salaries right after they step off the graduation platform.

Entrepreneurship is not for the rich, and it might not even result in riches, either.

Myth #6:  Entrepreneurship requires huge funding.

Some people have this idea that in order to start a business, you have to have a pile of cash.

In order to get the pile of cash, you have to wheel and deal with angel investors, venture capitalists, and investors who ride around in chauffeured Rolls Royces.

The reality? Most of an entrepreneur’s “funding” is from his own back pocket. As Guy Kawasaki explained, most startups cost about $25,000 to get off the ground. What about VCs? They mostly put their money into tech and biotech.

And what about the immodestly rich investor who’s going to bestow millions of dollars on your good idea? It’s a myth. Most angel investors are ordinary people who make ordinary amounts of money. 32% of them are on an income of $40,000 or less. At that level, you can forget the Rolls Royce.

How does an entrepreneur get bankrolled? A lot of times, they don’t. They bootstrap. They growth hack. They build massive blogs with huge followings. They pull a line of credit. They eat ramen noodles.

Some entrepreneurs will get lucky and funded, but it’s definitely not a prerequisite for the trade.

Myth #7:  Entrepreneurship is fun!

Ha ha.

If I’m laughing, it’s my bitter laugh. There’s a true/false dichotomy to this myth. Sure, entrepreneurship is fun. I love what I’m doing, and just about every other entrepreneur does, too.

But let me tell you something:  Entrepreneurship is really hard, almost unbearably so at times.

The ups and downs of entrepreneurship parallel the ups and downs of ordinary life. There are the good times. And there are the bad times.

The difference with entrepreneurship is that the bad times are a lot badder, and the good times are a lot better.

But fun all the time? No.

Myth #8:  Entrepreneurs always take huge risks

In order to denude this myth, I need to tell you something about risk.

In our culture, we’ve ruined the whole idea of risk. Today, “risk” is buying a house, or stepping into an elevator, or driving to work in a car, not investing in a 401k, or — heaven forbid — quitting your day job.

Are all those things truly risky? If so, then life is risk.

A few centuries ago, “risk” was a whole lot more. Like deciding that you were going to go around the world in a wooden boat, and leaving life, family, riches, and the “safe” life behind. (Hat tip to Magellan.)

Entrepreneurs are risk-takers according to our conventional jacked-up ideas of safety. But maybe the entrepreneur’s risk-taking is nothing more than a tilt toward the unconventional, a good idea, and dissatisfaction with the status quo.

The entrepreneur’s risks are not the reckless actions of a devil-may-care upstart. They are decisions that are calculated, data-driven, dream-backed, and pursued with teeth-grinding determination.

Risk? Not hardly.

Conclusion

I believe that if someone aspires to entrepreneurship, he or she should immediately stop believing these myths.

As much as we love to categorize and list the strengths, characteristics, or traits of successful entrepreneurs, it’s an exercise in folly. By their very definition, entrepreneurs are mold-breakers and disruptors.

To be a successful entrepreneur, maybe the first step is to let go of everything you always believed about entrepreneurship.

What are some common myths that you’ve heard about entrepreneurship?

Article source: http://www.forbes.com/sites/neilpatel/2014/10/17/popular-entrepreneurial-myths-debunked/

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Like Michael Jordan and Babe Ruth, super angels are the best of the best, the superstars who set the standards for others.

Of the hundreds of thousands of angel investors in the United States, a few hundred are super angels – angel investors who have several hundred thousand or often millions of dollars to invest per year. While many are concentrated in Silicon Valley, they are located in many parts of the country. Most have built their own well-known companies and made amazing investments, which is typically where their investment capital comes from. Because of their success and who they know (other extremely successful entrepreneurs and investors) – they are able to attract great deal flow and have direct access to top management talent, strategic partners, other investors and potential acquirers.

Within the startup ecosystem several super angel names come to mind – Mark Cuban, Ron Conway, Desh Deshpande, Mike Maples, Ed Roberts, and Jeff Clavier to name a few. Super angels have expertise that is worth learning from.

I recently caught up with Richard Sudek to talk about super angels and what other “non-super” angels can learn from them.  Sudek is an angel investor, member of the Angel Capital Association, Tech Coast Angels, and newly appointed executive director of the Institute for Innovation at the University of California Irvine. Sudek, along with co-authors Allan May and Robert Wiltbank interviewed dozens of super angels for an article published by the Angel Resource Institute a few years ago.

While there is no silver bullet and luck certainly plays a role, here are some lessons learned from these and other super angels.

Really evaluate the CEO:  Sudek found that super investors define a good CEO as – “No quitters, no liars, no jerks.” Personally, I place a lot of credence in the abilities of the CEO, believing that is the number one variable to consider before I invest. All of the super angels Sudek interviewed mentioned they had become increasingly good at reading people, and I’m going to focus some of my own energies in learning that skill.  While some super angels are more interested in working with CEOs who they deem “coachable,” none will waste their time working with anyone who isn’t smart, personable, passionate, driven, who doesn’t share similar interests, or who is not nice. Super angels invest, in part, to mentor young entrepreneurs and because they’re excited about their potential new companies. They figure, why waste time with CEOs with toxic personalities?

Stay focused: Super angels tend to focus on the industry they are familiar with, although a few are known for their “spray and pray” approach.  Since the article was published Sudek says he’s learned it’s even more important to stay focused.  “One of the problems with angel investing is people tend to rate things outside of their core area of expertise higher because they know less about the subject,” says Sudek. “Really invest in things you understand – not just the industry, but specific segments of the industry. Know how things are sold, how they change, how they’re adopted.”

Build and use your networks: Because super angels have been very successful business people, they tend to network with others like themselves. Their networks include personal friendships, people they used to work with, and friends of these friends and co-workers. When they see a good deal, they’re not afraid to offer it to their friends. Angels who lack an expanded network but want to build a good one can get involved with an angel group or accredited platform.  Both provide exposure to a wider group of strong entrepreneurs and promising investment opportunities and angel groups give angels another way to meet and learn from each other.

Make sure strategies align: An entrepreneur’s strategy and an angel’s strategy matter to each other. Determine early on if your strategies and expectations align to avoid future problems. This is especially important for your product roadmap, go to market strategy, and exit plan.

Assess quickly – within a defined process: Super angels, because they know their industry, have key contacts and make many investments. It’s not unusual for them to only meet someone a few times before writing a check – often completing the process in a matter of weeks. “It’s not a speed issue; it’s a trust issue,” Sudek says. Being able to make a quick assessment speaks to knowing what you’re looking for.  Still, for us “less super” angels, it’s important to have a process to evaluate deals and conduct due diligence. Although your process doesn’t have to be the same as another angel’s process you can learn excellent processes from angel groups and accredited platforms.

Even if you are not a super angel, you can still be a superb angel investor – with growing networks, building your people reading skills and some of the lessons learned from the best.

Article source: http://www.forbes.com/sites/mariannehudson/2014/10/16/super-secrets-from-super-angels-for-the-rest-of-us/

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Like Michael Jordan and Babe Ruth, super angels are the best of the best, the superstars who set the standards for others.

Of the hundreds of thousands of angel investors in the United States, a few hundred are super angels – angel investors who have several hundred thousand or often millions of dollars to invest per year. While many are concentrated in Silicon Valley, they are located in many parts of the country. Most have built their own well-known companies and made amazing investments, which is typically where their investment capital comes from. Because of their success and who they know (other extremely successful entrepreneurs and investors) – they are able to attract great deal flow and have direct access to top management talent, strategic partners, other investors and potential acquirers.

Within the startup ecosystem several super angel names come to mind – Mark Cuban, Ron Conway, Desh Deshpande, Mike Maples, Ed Roberts, and Jeff Clavier to name a few. Super angels have expertise that is worth learning from.

I recently caught up with Richard Sudek to talk about super angels and what other “non-super” angels can learn from them.  Sudek is an angel investor, member of the Angel Capital Association, Tech Coast Angels, and newly appointed executive director of the Institute for Innovation at the University of California Irvine. Sudek, along with co-authors Allan May and Robert Wiltbank interviewed dozens of super angels for an article published by the Angel Resource Institute a few years ago.

While there is no silver bullet and luck certainly plays a role, here are some lessons learned from these and other super angels.

Really evaluate the CEO:  Sudek found that super investors define a good CEO as – “No quitters, no liars, no jerks.” Personally, I place a lot of credence in the abilities of the CEO, believing that is the number one variable to consider before I invest. All of the super angels Sudek interviewed mentioned they had become increasingly good at reading people, and I’m going to focus some of my own energies in learning that skill.  While some super angels are more interested in working with CEOs who they deem “coachable,” none will waste their time working with anyone who isn’t smart, personable, passionate, driven, who doesn’t share similar interests, or who is not nice. Super angels invest, in part, to mentor young entrepreneurs and because they’re excited about their potential new companies. They figure, why waste time with CEOs with toxic personalities?

Stay focused: Super angels tend to focus on the industry they are familiar with, although a few are known for their “spray and pray” approach.  Since the article was published Sudek says he’s learned it’s even more important to stay focused.  “One of the problems with angel investing is people tend to rate things outside of their core area of expertise higher because they know less about the subject,” says Sudek. “Really invest in things you understand – not just the industry, but specific segments of the industry. Know how things are sold, how they change, how they’re adopted.”

Build and use your networks: Because super angels have been very successful business people, they tend to network with others like themselves. Their networks include personal friendships, people they used to work with, and friends of these friends and co-workers. When they see a good deal, they’re not afraid to offer it to their friends. Angels who lack an expanded network but want to build a good one can get involved with an angel group or accredited platform.  Both provide exposure to a wider group of strong entrepreneurs and promising investment opportunities and angel groups give angels another way to meet and learn from each other.

Make sure strategies align: An entrepreneur’s strategy and an angel’s strategy matter to each other. Determine early on if your strategies and expectations align to avoid future problems. This is especially important for your product roadmap, go to market strategy, and exit plan.

Assess quickly – within a defined process: Super angels, because they know their industry, have key contacts and make many investments. It’s not unusual for them to only meet someone a few times before writing a check – often completing the process in a matter of weeks. “It’s not a speed issue; it’s a trust issue,” Sudek says. Being able to make a quick assessment speaks to knowing what you’re looking for.  Still, for us “less super” angels, it’s important to have a process to evaluate deals and conduct due diligence. Although your process doesn’t have to be the same as another angel’s process you can learn excellent processes from angel groups and accredited platforms.

Even if you are not a super angel, you can still be a superb angel investor – with growing networks, building your people reading skills and some of the lessons learned from the best.

Article source: http://www.forbes.com/sites/mariannehudson/2014/10/16/super-secrets-from-super-angels-for-the-rest-of-us/

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Article source: http://www.houstonchronicle.com/business/columnists/tomlinson/article/Houston-needs-more-angels-investors-that-is-5812567.php

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Stomach bug claims unhelpful: growersNZ Newswire

Horticulture NZ says it’s not surprised public health officials have not been able to trace the source of a …

Article source: http://nz.finance.yahoo.com/news/exit-goal-alignment-crucial-angel-042800359.html

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Stomach bug claims unhelpful: growersNZ Newswire

Horticulture NZ says it’s not surprised public health officials have not been able to trace the source of a …

Article source: http://nz.finance.yahoo.com/news/exit-goal-alignment-crucial-angel-042800359.html

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Acronyms abound in the business world – think GFC, Ebitda, Opex, Libor, OCR. Now visiting American angel investor John Huston has added a new one – EGC. It stands for exit goal congruence and means the investor’s desire to eventually sell the company and make a return is matched by that of the entrepreneur.

It’s the most important thing for any angel investor to consider before they commit their money, he said. Huston became an angel investor in 2000 after retiring from a 30-year career in banking and founded the first Ohio TechAngel fund in 2004 with 50 investors. It later became a founding member of the US Angel Capital Association.

Speaking at today’s 7th annual New Zealand Angel Summit in Auckland, Huston said he invested only in tech companies in his home state because he liked to know the entrepreneur who he would be making rich. He said goal alignment with the entrepreneur was key to achieve his aim of putting between US$3 million to US$5 million in the pockets of that entrepreneur once the company was sold.

“I want to get my money back so I can help other entrepreneurs,” he said. There was more benefit to the local community to have 20 entrepreneurs make US$5 million each who then infect others to have a go than putting US$100 million into the hands of one entrepreneur, Huston said. He pointed to the wealth created in accounting software company Xero by outside investors that could have helped many other small companies.

His favourite of the 50 angel investments he’s made is an ecommerce company that sold for US$19.7 million within 22 months. “The return wasn’t large but the two co-founders, one was Indian and the other Chinese, those two families shared US$10 million of the US$19.7 million. They can send their kids to any college they want or buy a ski house or a boat. It will have a profound impact on them.”

Catherine Mott, the founder of Blue Tree Allied Angels in Pittsburgh, said there needed to be a “champion” for each company angel investors put money into. Her fund has invested US$30 million in 46 companies in the Pittsburgh area.

Her key advice to would-be angels is to diversify, have patience and do good due diligence before committing money.

“You need someone who can create and build a good due diligence team. One person can’t do proper due diligence alone which is why they join a group and tap into many people in the group who can efficiently perform due diligence,” she said.

The former banker said that lead investor may or may not sit on the board if the investment goes ahead as that could require different skills.

(BusinessDesk)

Article source: http://www.nbr.co.nz/article/exit-goal-alignment-crucial-angel-investing-visiting-us-expert-says-bd-164093

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