Dan Martell knows a thing or two about investing in startups. The Moncton, N.B.-based founder of Clarity.fm, a site that connects entrepreneurs with advisors, consultants and mentors, including many angel investors, made his first angel investment eight years ago and has since put money into 33 technology startups in cities ranging from Halifax to New York to San Francisco.

Five of those companies delivered returns on his investment of seven times. Such results — in addition to huge tech startup buyouts, most notably Facebook’s purchase of Instagram for $1-billion — have fostered the idea riches can be secured by betting on the right startup among would-be investors.

“[In tech] you can go from nothing to a $2-billion outcome in four years. You’re not going to do that with a painting franchise,” said Mr. Martell, who was Canada’s Angel of the Year in 2012.

However, he is quick to caution anyone hoping to secure a fast, lucrative return from a one-off tech investment. As he pointed out, one-third of the 33 tech companies he invested in are now “dead.” “I’m doing good, but that’s not the norm. Most angel investors don’t make money,” he said.

“It’s like anything in financial investing: the higher the risk, the higher the reward. And this is one of those really risky sectors.”

For those undeterred by that risk, Mr. Martell offers some advice.

First off, he said you must take a “portfolio approach.” In other words, ensure you have enough “dry powder” to do a number of deals. He suggested no fewer than 15 investments of $10,000 each. “If you don’t have $150,000 you’re willing to put on black in Vegas and roll the dice, then you shouldn’t be angel investing,” he added.

He also recommends investing the same amount in each company and, if possible, co-investing with more experienced angels. “Don’t put half your capital into one company right off the bat because somebody sold you on the vision of it being the next Google. That happens all the time,” he warned. “People lose money in angel investing [because] they think they have the magic touch.”

Despite the risk, Mr. Martell said he he enjoys helping other entrepreneurs. Plus, angel investing allows him to “see the next version, the next generation, the next big innovation,” he said.

His investments — in companies focused on everything from drone technology to Bitcoin and 3D printing — don’t always make financial sense. “I could suggest 15 other ways you could probably make more consistent, accurate returns on that capital,” he said. “The upside is maybe you’ll make 10 times your money.”

Gerry Pond, another New Brunswick angel investor and Techvibes Canadian Angel of the year in 2011, claims his track record is the inverse of the industry standard: While nine out of 10 tech startups are said to fail, 90% of his 30 investment companies have either reached successful conclusions, such as a buyout, or are still in existence.

[In tech] you can go from nothing to a $2-billion outcome in four years. You’re not going to do that with a painting franchise

He started investing in startups in 2001 after a lengthy career in the telecom industry that included a stint as chief executive of NBTel. Most notably, he was the first investor in New Brunswick-founded Radian6 and Q1 Labs, which were acquired in recent years by Salesforce and IBM, respectively, with Radian6 fetching more than $300-million.

So what is his secret? Mr. Pond, who often invests with a cadre of investors under the East Valley Ventures banner, sticks to personal tech — his area of knowledge. “We don’t have any magic. Our eyes and ears are no different than anyone else’s,” he said.

“We’re pretty careful to stay inside of what we know, which is IT, particularly related to communication systems.”

Wander outside your knowledge area and your rate of success will fall, he argued. “So far, my return on investment in technology startups is a lot better than anything I’ve done on the stock market.”

Permjot Valia, the London-based angel behind Mentor Camp, is less bullish about the potential for returns when investing in tech startups. He has invested in 35 companies (25 in tech) across five countries, including Canada and Serbia, and recently created a tech startup fund in Arkansas.

Of his 10 non-tech investments, Mr. Valia has experienced three exits. “I’ve not had any successful exits from the tech world,” he noted. “I’ve had lots of failures.”

Mr. Valia preaches patience, noting that tech startups require an average of eight years to mature. “It’s very, very risky, and it’s very long-term,” he said.

He contends most tech sector reporting is too positive, giving a false impression of startup success and riches. “Behind all the wow stuff are loads of entrepreneurs who are broken, and loads of people who have lost lots and lots of money,” he said.

“Make sure you’re not getting caught up by the nature of reporting on startups. It tends to be overwhelmingly positive without highlighting the risks.”

He recommends investing no more than 10% of your money in tech startups. “And only invest money you’re 100% comfortable with losing. I cannot stress enough how risky it is… For every exit you hear of, there are probably 40 startups that didn’t make it.

“When you do get it right, the feeling is indescribable,” he said. “But the thing about angel investing is: until you actually get money, it could all go horribly wrong at any moment.”

Article source: http://business.financialpost.com/2014/09/23/investing-in-tech-startups-can-be-lucrative-but-beware-of-the-heavy-risk/

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Entrepreneurs are being encouraged to apply for a scheme which has helped to found hundreds of digital businesses.

DigitalCity Fellowships offer entrepreneurs who have an idea for a digital business up to £4,000 of funding to cover their living costs, as well as mentoring and support, while they develop their product or concept.

The deadline for applications for the next round of Fellowships is on Monday 8 September, and would-be entrepreneurs are being invited to apply for the scheme which is based at Teesside University.

The DigitalCity project has now been running in the Tees Valley for 10 years and in that time it has helped to create more than 260 new companies.

DigitalCity Fellowships are open to individuals and teams with an original project idea, who live in the North East of England and who have graduated from University.

Fellows receive industry-specific mentoring and advice from leading figures and access to workshops and networking events and also the use of specialist equipment.

Several of the region’s most successful digital companies have grown from DigitalCity Fellowships.

Hammerhead Interactive, a software development company which specialises in virtual reality games and visualisations, recently completed a Fellowship.

Director Christian Frausig said “Obviously, the money was a big help as it gave us a chance to experiment and test out different ideas.

“However, the main thing that helped us was the mentoring. It was a huge benefit having all that advice about the best way to set up the business.

“There was a really good variety of mentors, not just within DigitalCity, but also the people they brought in from outside.

“If we needed specific legal advice or something like that, there was always somebody we could turn to.

“We were never working in isolation, there’s a great community here in Teesside.“

David Jeffries, head of DigitalCity, said: “Over the last decade DigitalCity has helped to create a collaborative digital economy in the Tees Valley and the Fellowship scheme has helped to launch hundreds of successful companies.

“DigitalCity Fellows find that the support they receive, both the funding and the advice and mentoring from leading industry professionals, help to remove a lot of the risk associated with early stage start-ups.

“Also, the contacts they make and the links they forge over the course of their fellowship help to ensure the future success of their business.

“We would like anybody who has an innovative digital business idea to get in contact with us.“

This project is part financed by the European Regional Development Fund (ERDF), managed by the Department for Communities and Local Government.

The ERDF Competitiveness Programme 2007-2013 is bringing over £300 million into the North East to support innovation, enterprise and business support across the region.


#North East
#digital
#entrepreneur
#funding

Article source: https://bdaily.co.uk/entrepreneurship/25-08-2014/teesside-digital-entrepreneurs-encouraged-to-apply-for-university-funding-scheme/

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The Cliffs of Moher

The Burren and Cliffs of Moher Self-Drive Tour

Ireland is bursting with a large pool of technology and design talent, and we aim to leverage it to expand our presence while creating exceptional digital products. ‘The Celtic Tiger 3.0’ is happening, and we are excited to take part in it.”

Dublin, Ireland (PRWEB) September 22, 2014

Semilla Ventures LLC., an angel investing venture fund based in New York, announces its first seed investment in Roady Guides: Ireland.

Roady Guides is a self-drive guide tour app for the iPhone that provides over 100 short and insightful audio commentaries for Ireland’s most popular attractions — all based on your phone’s GPS location. Roady Guides was developed in its entirety in Ireland, and it combines the freedom of an open road trip and the benefits of a guided tour, together as a single product.

The app features six driving tours in the Irish counties of Galway, Kerry, Wicklow, Cork and county Antrim in Northern Ireland.

Boris Chamorro, Managing Director of Crann Semilla Ventures Ltd, the Ireland-based affiliate of Semilla Ventures, said “We are very excited for the launch of our first project. The travel industry in Ireland is growing exponentially and we are positioning Roady Guides as a tool for domestic and international visitors to enjoy Ireland’s beauty and heritage in a different way.” He continued, “Ireland is bursting with a large pool of technology and design talent, and we aim to leverage it to expand our presence while creating exceptional digital products. ‘The Celtic Tiger 3.0’ is happening, and we are excited to take part in it.”

Gerard Kelly from Getchoo Creations, the software design agency in Ireland that developed Roady, said: “We are pleased to be part of the Roady Guides project. It was a pleasure to work with the Crann Semilla Ventures’ team to create an innovative solution that tourists will find a joy to use.“

**END**

About Crann Semilla Ventures Ltd.

Crann Semilla Ventures Ltd. is an investment fund based in Dublin and is an affliate of Semilla Ventures, an angel investment fund based in New York City. With over 60 years of combined experience in finance, technology and design, Crann Semilla Ventures Ldt. is investing in Ireland to leverage its prominent role as a hub of technical prowess and technology advancement in western Europe.

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https://itunes.apple.com/app/id907958727?mt=8

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Article source: http://www.prweb.com/releases/self-drive-tours-ireland/roady-guides/prweb12172524.htm

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Angel investors (not venture capital firms) are the most likely candidates to get your businesses from a piece of paper to a proof-of-concept.  These angel investors typically come in four distinct groups:

Friends and Family

Friends and family investors have their distinct plusses and minuses.  The plusses are these people know you the best, so they are the closest to you in determining whether or not you are backable, as first hand references.  The minuses are pretty major:  these are your friends and family!  It is very difficult to mix personal and professional relationships.  And, as we know, only one in 10 startups is successful.  So, there are very high odds you lose all the money invested by your closest friends and family, which will make for VERY awkward Thanksgiving dinners from that point on.  So, if you decide to ultimately go down this road (which for many startups are their only option), make sure your friends and family know this investment is HIGHLY risky, and they should not invest the funds unless they are prepared to lose 100% of their investment (e.g., like money they would gamble in a casino).

Individual Angel Investors

As for finding angel investors directly, this is the hardest route, by far.  First, because they prefer to stay anonymous.  And, second, because they don’t know you at all.  Sometimes rich individuals have built formal family investment offices, with professional managers screening deals for them.  But,if they can afford a family office, they prefer to invest $5MM+ in more typical venture investments, not $500K for a startup.  Preferably, you need to find an individual that understands your industry and business model and can bring real value to the table.  If they have first hand experience in your space, and they think they can help you accelerate your efforts, it is easier for them to get over the investment hurdle.  So, identify those individuals, and try to figure out someone they know, who can credibly make an introduction for you.

As an example, if you think you have the next great video gaming technology, I would research what similar video game technologies have recently been sold (meaning the founder just got very cash rich), and reach out to that founder to tap into their expertise as an advisor, board member or investor.  Notice, I didn’t lead with investor.  You need to establish credibility with this individual before jumping into the investment question.  And, if he doesn’t want to invest, he may know others in the industry that would, so ask him for references.  Venture capital firms are also aware of key angels in their market, so reach out to them for guidance.  Angel List is a particularly good resource that makes finding angels for your region/industry easier than ever, so check them out as a good place to start.  But, again, look for credible relationships to help open the door for you, preferably to investor is your home market (as most angels tend to bias local investments).

Angel Investor Networks

This category, is my favorite category: networks aggregating angel investors.  Like the family offices, investors set aside funds for angel investments, screened by a professional team that sources deals for the network.  So, the individual angel gets to keep their anonimity and have the comfort of a team of smart managers doing due diligence on investment targets, on their behalf.  So, instead of one angel investing $1MM by themself, 100 angels aggregate $100MM and invest as a group in the deals they like the best, individually or collectively.  And, on the flipside, it is much easier for you to raise your full amount needed, with one phone call, instead of calling the numerous investors individually.

Here in Chicago, the two largest angel networks are Hyde Park Angels and Cornerstone Angels (click here to see a broader list of Chicago investors).  These angel networks very much prefer to invest in their own backyard.  So, if you live in Chicago, reach out to networks like these.  If you live in another city, you will need to research who the angel networks are in or near that city.  As a national resource, I stumbled on this great list of angel investors sorted by region of the country, at the Angel Capital Association website.

Via Fund Raising Advisers

If all of the above fails, you should consider engaging a boutique startup fund raising adviser.  The problem with this road is raising funds via this channel can be more expensive, with the advisor typically taking a 5%-7% success fee in cash, plus the same dollar amount in warrants to buy into the deal, and often times, plus a monthly retainer to cover their costs.  So, if you are not confident in your own abilities to raise capital, perhaps an outside adviser can help.  But, like investors themselves, advisers typically take on clients they think will be easiest to sell to investors.  So, make sure your story will resonate with them too.

Hopefully, this information helped to make the angel identification process “less scary”, knowing there are viable angel investor options which can be pursued.  And, over time, expect more and more angels to get more active in early stage investing as a core part of their portfolios.  Especially, with the rise in crowdfunding options (learn more about crowdfunding here).

George Deeb is a growth consultant at Red Rocket Ventures, and author of “101 Startup Lessons–An Entrepreneur’s Handbook”.

 

Article source: http://www.forbes.com/sites/georgedeeb/2014/09/19/how-to-find-angel-investors-for-your-startup/

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17. Gerald Aigner was brought in to manage Google’s supply costs. Now, he’s in London being an “internet professional.”

Employed by Google from: 1999 – 2006

Most recent position at Google: Aigner was a member of Google’s senior staff, according to his LinkedIn page. Specifically, he was in charge of the data center and internet/leased line negotiations, hardware design and purchasing, hardware and network monitoring, and performance optimizations.

Current Company/Position: Aigner now lists himself as an “Independent Internet Professional” based in London on his LinkedIn profile.

Article source: http://my.news.yahoo.com/google-first-21-employees-where-185902438.html

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For angels trying to find the perfect company to invest in, I have good news and bad news.  First the bad news:  there is no perfect company to invest in.  All have risks.  Now the good news:  you can mitigate that risk by asking the right questions and digging for good answers.

Recently Susan Preston, a successful angel who is general partner for CalCEF Clean Energy Angel Fund, led a webinar on this topic for the Angel Capital Association.  Preston, an educational instructor for the Angel Resource Institute, offered excellent insight into what makes an investable company.

Combining Preston’s insights with my own research and comments from angels across the country, I’ve compiled the top seven factors for assessing which companies to invest in:

  1. The company is scalable.  This means the company can grow quickly in revenues, while expenses are kept down, building a good margin.  Some business models work great for this, while others that require considerable personnel may not.  A common example of a scalable business is the manufacturer of a razor which needs a lot of razor blades that are low-cost to make and sell, while a company that requires lots of customization or expert time in installation or consulting is not as scalable.

    Simple laboratory scales for balancing tubes

    Simple laboratory scales for balancing tubes (Photo credit: Wikipedia)

  2. The company is attractive to potential acquirers.  Many corporations that acquire innovative ventures are looking for high growth, scalable companies with great margins and products that align with their strategies.  It is important for the company to have an exit strategy from the start, and for investors to understand who is likely to buy them, why these buyers would be interested and the anticipated timeline to acquisition, among other considerations.
  3. The potential exit provides the return you need.  Every potential exit comes with a return calculus based on a combination of how much you invest, the pre-money valuation, how much of the stock the investor owns, and the acquisition purchase price. So it is important not only to have an idea of how much the company might be sold for, but how much money you invest and whether additional investment rounds might dilute your ownership percentage.  If I am looking for a 10X return on my investment, one way to increase the chance for a bigger return is to work with a company that isn’t likely to require a lot of additional capital.  That way I can more easily understand how much the company needs to sell for in order to hit my return target.  Of course all of this is “in theory,” since exit predictions are rarely accurate (wouldn’t it be great if they were?).
  4. An excellent management team.  Investable companies are led by solid management teams with experience, knowledge and complementary skills, along with the ability to build a great culture as the company grows.  While many angels prefer teams with previous entrepreneurial experience, some enjoy working with first-time entrepreneurs who have tremendous enthusiasm and energy and also surround themselves with experienced insiders and senior advisers. The team needs a realistic business plan and financials with a clear path to profitability.
  5. The product is validated by customers and meets other criteria.  One of the biggest things to determine when considering an investment is “who is going to buy this product?”  Investors need to talk with customers or potential customers to validate that they plan to buy it.  Does it solve a major problem or pain point for them? And how does this product compare to the competition?  The company should be able to easily communicate why their product is better than their current or future competitors.  There are also a host of other issues to consider, from intellectual property to manufacturing.  Make sure a realistic product road map exists and that true costs of production and delivery are well thought through.
  6. A large market and strong go-to-market strategy.  Make sure the addressable market is big – $500 million, not $5 million – for a better chance at revenue growth.  And confirm a clear market strategy.  Who are their partners?  What is the process to get to market?  Ask about the length of the sales cycle, which is often longer than entrepreneurs think.  How do the market and product work together?  As an example Preston says when she first started investing in clean energy, she thought people were going to buy green because it was the right thing to do. “Not true at all.  No one is going to do that unless it’s priced competitively and there’s a compelling bottom-line reason to do it,” she says.
  7. The opportunity fits your personal preferences.  Choosing a company is a personal decision and over time angels develop their own weighted list of attributes to look for.  Most angels start by investing in industries they are familiar with.  Others consider geography, growth stage, amount of capital needed, and many other factors.  It may be that no two angels are alike – but the best ones have an investment strategy that fits their preferences.

How you weigh each of these factors is your own choice.  During the webinar, an attendee asked Preston if the management team was more important than the market or product. Her answer surprised me: “Many people have said that the management team is the most important factor in assessing a company, but I’ve come to the conclusion that we can’t say one factor is more important.  Having gone through this a number of times, they are all important.”

If you’re looking for more resources on assessing a company’s “investability,” I recommend two free resources.  One is a report on how “super angels” look for the right companies (hint: the entrepreneur team really matters) and the other is a series of videos on InvestorIQ, including a number of top angels discussing how they find the best companies.

Angels will never find a perfect investable company.  Each one has risks.  Your job as an investor is to evaluate the risk and develop a smart, professional approach that balances the risks and rewards of investing in that company.

Article source: http://www.forbes.com/sites/mariannehudson/2014/09/18/7-factors-for-deciding-to-invest-in-a-startup-or-not/

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New platforms are opening up access to tech startups on a massive scale. Sites like AngelListFundersClubAlphaworks allow angels (that meet accredited investor status) to invest in startups and technology companies. While it’s still high risk, there’s less of a barrier to becoming an angel investor.

Angel groups have been common over the past few decades, but that’s changing as more individuals are empowered—via shared knowledge, as well as through new platforms—to invest independent of a group. The number of angels investing on their own has increased more than 50% in the past year, up from 26% to 41% of deals done in Q1 of 2014.

This new era of independent, open angel investing has the potential to involve more investors to participate in a massive market, representing $22.9 billion of capital invested in 2012. To understand the nuances of angel investing I asked five expert Quibb members—Silicon Valley-based entrepreneurs who have become successful angels—to share their unique knowledge:

Siqi Chen (Investor in TouchOfModern, Famo.us, Airseed)

Two lessons I learned from angel investing, one from a great investment, and one from an investment that I missed out on:

1. Optimize for pivotability

This is a quality that I think is underrated. Some of the biggest success stories in investing come from teams that have executed multiple pivots (Twitter, Slack, Kabam, Groupon). This is probably the number one quality that I look for. One of my most successful investments, TouchOfModern, ended up with their current business model on their third pivot.

2. Be careful when judging early execution

Focus instead on the team and the market. When I first used Uber back when they were in private beta, I wrote them off because their credit card input system was bugged. “They won’t even let me pay them!” I said. We all know how that story ended. When you’re doing seed stage angel investing you’re going to be investing in very early products, it’s important to judge opportunities accordingly.

Mike Greenfield (Investor in Pocket, Cover, Hullabalu)

When I first started investing, the question I asked myself when deciding to invest was “Is this company going to yield a positive return on my investment?” Now, I usually ask “Is this a company that I could have seen myself joining when I was 24?” If the answer to the second question is yes, it means the founders are working on a big problem that doesn’t have glaring structural flaws, they have a good chance of success, they’re people who could convince someone geeky like me to work for them, they’re working on something important, and they pass my integrity test. If all of those things are satisfied, I feel like I’m probably doing something right as an investor, even if my investment doesn’t make money.

Christopher Schroeder (Investor in Vox Media, Skift, ibotta)

I had always known that there is something of a lemming mentality in all investing (those with a stronger backbone than others have long made a fortune in the public stock markets simply by reading the herd correctly and running the other way). When I began to angel invest a few years ago, the phenomena seemed exponential. When I brought a deal to successful, bright and savvy friends, the first question inevitably was “who is in?” before “tell me about the team and the concept and why they can get through the typhoon that is startups?”

On the other end of the spectrum were the over due-diligencers. These are the types who have years of experience in a related field (with emphasis on related), often in more established enterprises who are almost McKinsey-like in their analysis. Their experience and insight are not without value, and make for interesting board meetings, but I just lost my shirt on a company for pretty much every reason other than the ones my over-due-diligencers predicted.

My batting average approaches Hall of Fame figures when I start with the individuals (by the way, meaning that as often as not I foul tip or worse)—their personal stories, their conviction, their willfulness to figure out anything without being captured by their own hubris. The idea, of course, matters and their approach to it tells us a lot—but they as often are as good at asking the right questions of themselves, and have the steely will to walk through walls attuned to that when sufficient evidence tells them they are wrong—they, well, go at it in a different way.

And I seek the same in angel investors who bring me ideas, and have become heavily biased towards women and men who themselves have built companies from scratch. Not all great CEOs are great investors—but in companies who are one level barely above the dream stage, it sure comes in handy.

Jeff Miller (Investor in DuckDuckGo, Artsy, GazeHawk)

As an investor it’s extremely challenging to be of significant help to an entrepreneur (aside from capital). This isn’t for want of trying. Most founders I know are appreciative when angels give product feedback, send a supportive tweet, or make themselves available as a sounding board, but the types of clutch actions by an investor that can affect a company’s future—like making an intro to a key hire, for example—is much more rare than I had anticipated it would be. The flip side is that the best performing companies tend to need the least amount of assistance from their investors. This runs counter to what I think most angels expect when they get into the game.

Andrew Chen (Investor in AngelList, Secret, BarkBox)

External market trends and potential impacts on the companies you invest in are almost impossible to predict but can have monumental impacts, potentially creating an inflection point in the company’s trajectory. I’ve learned that partnerships can be extremely valuable when these external shifts take place, and it’s important to have at least small partnerships and relationships with bigger companies in place, as they can be really powerful once those shifts start to occur.

Another lesson—I feel that the definition of what makes a “good team” isn’t concrete, and is potentially skewed by the types of people that choose to start companies. Over time, I’ve come to prefer a company that has a product that’s really working (i.e. has product-market fit), versus one that has a “good team” but a product that isn’t quite working yet. I’ve found that a “good enough” team, with support and guidance, often times has the capacity to pull off something great.

We welcome your comments at ideas@qz.com. 

Article source: http://qz.com/267482/five-successful-angel-investors-spill-their-secrets/

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I love AngelsThis is an interesting infographic designed by the creative team over at SeedInvest.  It depicts the importance of angel investing and gives the viewer some numbers to work with.  SeedInvest has been one of the leaders in the battle to save angel investing.  Paradoxically there are some people out there who believe angel investing should be restricted – making it more difficult for people to fund young, innovative companies.  Why do they want to diminish angel investing?  Well they believe that bureaucrats and politicians are better stewards of your hard earned money.  We all know the federal government has an excellent record of managing their own finances too.

Hopefully common sense will prevail and angel investing will become easier, not more difficult because:

  • Angels invest $20 billion in about 60,000 startups each year
  • While angel investing is prominent in California, it drives significant innovation in regions like the mid-west (think Detroit… Cleveland..)_
  • Funding small companies drives economic growth
  • Economic growth means more jobs… and that is a good thing…

 

________

Angel Investing from SeedInvest

Article source: http://www.crowdfundinsider.com/2014/09/49986-angel-investing-helps-power-economic-growth-infographic/

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COLUMBUS, Ohio, Sept. 17, 2014 /PRNewswire/ — Today it was announced at the ACA Leadership Workshop in Columbus, Ohio that ProSeeder has become an Official Partner of the Angel Capital Association. In connection with this partnership, ProSeeder is also announcing the release of several new features that specifically address the needs of leading angel networks around the world. ProSeeder will exhibit their platform at the Workshop from Wednesday, September 17 – Friday, September 19, 2014. The Workshop is an ACA member-only event for members and leaders of some of the largest angel networks in the US. They will be discussing current trends and best practices in angel investing.

The ProSeeder platform now offers additional features and configurations to increase efficiency for angel network operations. These new features include the ability for angel networks to onboard new members in a streamlined manner by tracking membership renewals, credit card processing of membership dues, and additional investor CRM capabilities. Additionally, ProSeeder is launching Legal Entity Management to streamline the K1 issuance process for angel networks, venture funds, and private companies.

ProSeeder has entered the market as a technology provider enabling angel networks, venture funds, broker dealers, family offices, real estate funds, and other financial firms to become more efficient and collaborative. CEO Ken Gatz announced at the ACA Leadership Workshop; “The goal of ProSeeder as a technology provider is to enable clients to build value in their own organizations and easily engage with other groups.” To advance this, Gatz also announced further customization options and capabilities for dashboards and workflow systems within the ProSeeder platform; “technology should adapt to an organization’s operations, as opposed to that organization having to modify its processes to fit a rigid technology platform. This is the promise of ProSeeder.”

ProSeeder will continue its relationship with the ACA as a Partner and Sponsor of the ACA Southwest Regional Meeting in Tucson Arizona, on October 24th, 2014 at Marriot University Park, 880 E 2nd Street.

About ProSeeder Technologies:

ProSeeder Technologies is a SaaS-based enterprise platform for the private securities marketplace. The system enables financial organizations and private companies to conduct and manage all aspects of investment (pre and post financing) and corporate operations on a single fully integrated system. ProSeeder’s technology is easily customizable for angel networks, venture funds, family offices, broker dealers, real estate funds and private companies.

www.proseeder.com

“Follow us on Twitter for exciting news, platform updates and more @ProSeeder (www.twitter.com/ProSeeder)”

Article source: http://ca.finance.yahoo.com/news/proseeder-now-official-partner-angel-210000260.html

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DreamFunded Featured

DreamFunded: A Crowdfunding Platform “Built by Angels for Angels”

mannyfernandez1-1Manny Fernandez, co-founder and CEO of equity crowdfunding platform DreamFunded and SF Angels Group founder, has enjoyed quite a summer:  Fernandez recently was awarded “SF Angel Investor of the Year” by Startups Showcase and his recently launched DreamFunded currently remains ranked  on AngelList’s most popular startups, peaking at second place.

I recently had the opportunity to catch up with Manny over email about his exciting angel investing career, his new crowdfunding platform and his experience as an entrepreneur in the startup trenches.

____________________

Erin HobeyCongratulations on your recent career kudos and DreamFunded launch. What a pleasure to have the opportunity to interview you, Manny!  I’m curious about the beginnings of your career.  How did you get started?

Manny Fernandez: In my early 20s, I was a real estate investor. With my track record and network, I later co-founded a real estate fund. I acquired and held single-family homes. I made the decision to sell the portfolio at the peak of the real estate market. I then founded an online real estate startup, which was acquired after two years.

Success GraphErin: What was your first unforgettable experience with startups?

Manny: I was amazed at how much time it took to find and raise money from angel investors. All this time took away from building a business, I told myself many years ago; if there was a better way to raise money, when I became successful, I would find a solution to help the next upcoming startups.  At 21 years old, I even thought about using the interest to raise money, but after talking with my lawyer, he said that was not a good idea, because of the then current laws.

Erin: What did you learn from this experience that has shaped your own business MO?

Manny: I always kept my eye out to solve this problem. Now I found the way with DreamFunded.com.

Erin: What was your first business and how did you finance it?

Manny: Real estate investing. I raised money from mentors, friends and family.

Erin: How did you become involved as an angel investor?

sf angelsManny: In 2010, I educated myself on angel investing while taking some courses at Stanford. I started investing on my own, with the help of a mentor. I later joined my first angel group TiE Angels. In 2013, I founded SF Angels Group, a San Francisco focused angel group. The group has grown rapidly to 28 angel members.

Erin: Who was your first mentor?

Manny: I am honored to have had many greats. However, they prefer to stay behind the screens. A great mentor for DreamFunded is Bill Payne. Bill helped found four angel groups and whose bio is listed on DreamFunded team page.

bill payne

Erin: Did you have a particularly memorable angel investor?

Manny: Bill Payne is a memorable angel investor in my life. He is very well known internationally in the angel community and has a great reputation.

Erin: What did you learn from this relationship?

Manny: I learned how to screen and evaluate deals.  I also learned from that experience how to think about the deal. As well realized, many investors need guidance on what to invest in and what to stay away from. I see through this new market of crowdfunding, leadership will be important to help guide the market into the potential money making deals and away from the ones that appear that it will not make investors any money.

I realized early on that I was a just a “me too” angel investor. I wanted a way to stand out so I can attract some good deals, or at least be a person that had a strong network in place, so when the deal presented itself, we could help the startup with its capital goals.

In mid-2013, I was invited by a Stanford professor to attend an event put on by Pricewaterhouse Coopers. That event was called MoneyTree. In that event, the rep from Pricewaterhouse Coopers said based on the VC funding in Q1 of 2013 that “San Francisco is the new epicenter of Silicon Valley.”

I said to myself that there is no angel group with a focus in San Francisco. There was the angel group called the Keiretsu Forum, but they charged startups $6,000 to present. I decided to found an angel group specific to San Francisco, one that does not charge the startup to present. I went to some of my mentors and angel friends and invited them to be a part of SF Angels Group.

realtysharesErin: Which business / entrepreneur first viewed you as a mentor?  How did the business develop with your guidance?

Manny: I was the first angel investor/ advisor in RealtyShares.com.  RealtyShares.com was later accepted into 500 startups, and subsequently they raised substantial VC round fund from Catalyst Partners a top tier VC firm.

Erin: What are the benefits and disadvantages of third party or angel investors?

Manny: The benefits are that you get advice from experienced successful people who been there and have a vested interest in your success. They also have a network of relationships that they can connect you with to grow your business.  The disadvantages are if you have many angels and each with different opinions and advice. It can make it harder for the startup to focus and build vs. handle investor relations.

Erin: As an entrepreneur, please share what you look for in a startup.   Which tech startups have you targeted for investment?

Manny: As an investor and entrepreneur. I look for huge new markets and looks to make investments in that market early. I don’t talk about what startups that I am targeting until the deal is done.

Erin: Please share what first sparked your interest in crowdfunding.

Hackathon Logo 2014Manny: In 2012, I was invited to a Hackathon hosted by app.net. As I was programming with someone, I heard a story of how App.net crowdfunded their own startup, on their own platform that they built and raised over $800,000 without giving away any equity. Since I had a background of investing, this made no sense. I was skeptical.  Then Marc Andreessen walked into the room. I approached Mr. Andreessen and asked about App.net, and he said, “Dalton was the real deal.” From that experience, I made a decision to become an expert in crowdfunding.

Running PebbleErin: Which crowdfunding campaigns have you followed closely and why?

Manny: Pebble watch. It was historic for crowdfunding: it shows that the power of the crowd, when the crowd believes in the vision.

Erin: What led you to establish DreamFunded, the crowdfunding platform that you cofounded with CTO Darnell Kemp?

Manny: As an angel leader in San Francisco, I received emails from investor from all parts of the world that wanted to co-invest with SF Angels Groups deals. I am a frequent judge/ panelist and speaker at many Silicon Valley pitch events and conferences. Through that,  many people wanted to co-invest in our deals. I saw the trend that investors wanted access to deals already being done by angels and wanted to co-invest a few thousand in a series of deals done by angels. As an entrepreneur, I am always looking for ways to solve other people’s problems. Once I see many people with the same problem, and I see a way to make money from it.

Darnell KempI had a hard time coming up with an available name. Then I thought back to many years ago, when my first Dream was to build a startup and then my second dream was to get FUNDED. Then the name comes to me: DreamFunded.com.

Darnell and I built the platform what is known today as DreamFunded.com. Darnell graduated from at MIT in CS; we built the platform together. As a business school student, Darnell did a lot of the research on this business model.

Erin: Which other platforms do you see competitive or complementary platforms with DreamFunded? What sets the DreamFunded brand apart?

Manny: FundersClub would be the closest to DreamFunded business model. What sets us apart is our deal flow, experienced angel team and our world-class investment committee. Investors are saying DreamFunded is “built by angels for angels.”

Erin: Regarding marketing strategy, how did you convince potential investors to link up with DreamFunded?

Manny: We are the 4th platform approved by Angel Capital Association (ACA). This approval greatly helped attract our over 3,000 accredited investors from throughout US and worldwide.

Erin: What role(s) will social media and your 109K+ twitter followers play? Twitter and Facebook

Manny: I hope that my twitter followers will help get the word out that one day soon every adult will be able to invest in startups. Twitter is just another way to influence others on what DreamFunded is doing. Some people say I am a thought leader, but I think I am far from that, however that is one of my goals.

We also have over 20,000 thousand likes on our Facebook page which will help us educate many on our developments. Most likes are from non-accredited investors. We are building our base of supporters now, so when the SEC rules become official, we will be ready.

Erin: I gather that DreamFunded will offer 506c and Reg A plus offerings (contingent upon final rules), and from the website, also Title III retail crowdfunding offerings.

Manny: We have no opinion on the still-pending final rules for Title III and Title IV Reg A plus. We are only doing 506b deals. If the rules make sense, we plan to do equity crowdfunding i.e., Title III retail crowdfunding offerings.  My opinion on the pending rules: let’s wait and see. In the meanwhile, DreamFunded will be operating only for accredited investors.

Erin: How will you source deals and generate revenue for the platform  (contingent upon the type of offer)?

Manny Fernandez and San Francisco Mayor LeeManny: Let’s handle this two-part question one at a time.

How will we source deals?  The process for selecting or evaluating deals for investment is due diligence (or vetting). Due diligence has been shown by Wiltbank in Returns to Angels in Groups (a Kauffman Foundation study) to be critical to investor success.  The Wiltbank study showed that deals on which angels devote 40 or more hours of vetting provided seven times (7X) greater returns over deals on which angels spend 20 hours or less of due diligence.  Existing angel groups and VCs are well aware of the relationship between due diligence and returns, consequently, they devote the appropriate time to due diligence on each deal.  It is for this reason that DreamFunded has chosen to partner with selected angel groups and VCs – those willing to share due diligence documentation with DreamFunded.

Due diligence consists of (1) interviews and background checks on entrepreneurs, the team and the company advisors/Board, (2) validation of market size and customer acceptance, (3) a review product value proposition and technology (IP validation), (4) an analysis of the competitive environment and many other considerations.  Additionally, the terms of investment must meet exacting standards.

Ben Franklin $100 BillDreamFunded has recruited a world-class investment committee to review the due diligence completed by angel groups and VC partners to assure each deal meets DreamFunded standards for anticipated investment performance.  Partners, who are highly qualified investors, will provide the DreamFunded investment committee with written documentation of their due diligence.   The investment committee will validate that each investment opportunity meets DreamFunded standards prior to posting investments for member consideration.

Erin: How does DreamFunded make money?

Manny: For every round of investment in any company, DreamFunded will establish a single-purpose entity (an LLC in most cases) to consolidate investments from members.  DreamFunded will set aside 10% of all investments to establish and administer these LLCs.  However, the pay-off for DreamFunded will be when portfolio companies exit, that is, when invested startups are sold (or, for some, as they go public through an IPO).  DreamFunded will benefit from a 20% carried interest on each investment that is, “profits” exceeding return of capital will be divided 80% to investors and 20% to Dream Funded.  So, with the exception of the fee to pay for administering the LLCs, DreamFunded will make money only on profitable investments.

Erin: Which dreams and ventures are you currently funding and why?

Crowdfunding is Angel investingManny: Since we are using the 506b, we are not allowed to talk about the good deals that are currently active within DreamFunded membership only section.

Erin: Which leadership techniques have you learned and employed that will help you ensure DreamFunded’s success?

Manny: As you know, there is nothing that will ensure success. But to best answer your question on leadership, I think knowing what I stand for and then inviting supporters to join to help make the vision a reality and by making sure there is a win/win for the other person in advance. I also think surrounding myself with a trusted team greatly helps in any leadership role. Everyone has strengths and weakness, I seek to get people around me whose strengths are my weaknesses.

Erin: What’s next? Please describe other projects you have percolating! stratup grind

Manny: We are trying to build relationships with our over 3,000 members of DreamFunded through webinars, Gotomeeting and in person meetings.

Insiders, mark your calendars for September 26th when Startup Grind will be hosting a fireside chat on Manny Fernandez.

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Article source: http://www.crowdfundinsider.com/2014/09/49613-interview-dreamfundeds-ceo-co-founder-manny-fernandez/

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