Technology Reporter- Boston Business Journal
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.