2x Partners: Angel Investors 101

While attending the Stonyfield Institute, lawyer (and good friend of the firm anyway!) Steve Palmer provided some info on:

How the term angels came to be/what they are
How you find them
What they want

Steve was good enough to provide some notes below:

ANGEL INVESTORS

(Those of you who are Biblical scholars might like to think of angel investing in terms of “manna from heaven”)

Overview

I. What are angel investors?

II. How do you find them?

III. What do they want?

I. What are angel investors?

– One possible answer: Anyone who will give your venture some money!
– The term “angel investor” was first used to describe wealthy individuals who helped to fund Broadway productions.
– In 1978, William Wetzel of the Center for Venture Research of the University of New Hampshire started using the term the way we think of it today.
– Because each angel investor is different – and because angel investing in general has changed over the years as we will learn in a moment – what I am saying about angel investing are generalizations.
– Originally, angel investors were high net worth individuals who made investments with their own personal funds in early stage ventures – typically as a second stage investment after founder or friends and family rounds.
– Often they were entrepreneurs who “cashed out” and wanted to invest in new enterprises.
– In the late 1980s, angel groups or angel networks began to form where groups of high net worth individuals pooled their money to make investments. They have investment criteria, review committees and often professional staff. There are now at least 300 such angel groups in the U.S. – and probably more.
– One of the larger groups in this region is “Common Angels” in Boston, which was formed in 1998, and which generally has an IT investment focus.
– These angel groups and networks have moved angel investing along the spectrum to look more like traditional venture capital financing.
– But there are still plenty of traditional individual angel investors out there and actively investing. One estimate puts the number of active angel investors in the U.S. in 2007 at over 250,000.

II. How do you find them?

– Just like “real” angels, you often can’t see them.
– It is easier to find “angel groups” these days using search sites such as Google, Yahoo or Bing or by using resources such as the Angelsoft network. Angelsoft network, which you can find at angelsoft.net, was formed in 2004 and provides web-based deal flow management software to angel investors and provides a forum to introduce entrepreneurs to potential sources of angel funding.
– Identifying the traditional type of individual angel investor is a bit trickier.
– One way to find them is by attending events such as this and by networking. I have a feeling there may be an angel investor or two in this room right now. But be kind – lest they disappear!
– Ask other entrepreneurs.
– Ask your advisors.

III. What do they want?

– Remember, they may be angels, but they are also investors. Like any investor, they want a return.
– As early stage risk investors, they’d like a big return – something on the order of 10x, 20x or even more over a 5 year horizon. And like other investors, they certainly don’t always get it!
– They want you to succeed! Many angel investors, in addition to giving you money, want to be your mentor. They like to share the benefit of their experience and their contacts.
– Many develop a strong personal interest in and connection with your company – and you.
– They often have knowledge and interest in your industry and can be good sounding boards.
– In general they are more likely to be “hands on” than passive investors, but are less control oriented than VCs

IV. Closing

I started with a Biblical reference, so I’ll close with one from pop culture. If you are a fan of It’s a Wonderful Life, now you know that every time you hear a bell ring, not only has an angel gotten his or her wings, but has made an investment in a company like yours!

Provided courtesy of:

Stephen L. Palmer | K&L Gates

State Street Financial Center, One Lincoln Street, Boston, MA 02111

(617) 951-9211 direct | e-mail: stephen.palmer@klgates.com

91 thoughts on “2x Partners: Angel Investors 101”

  1. Hi, i read your blog occasionally and i own a similar one and i
    was just wondering if you get a lot of spam remarks?
    If so how do you stop it, any plugin or anything you can advise?
    I get so much lately it’s driving me mad so any help
    is very much appreciated.

  2. Write more, thats all I have to say. Literally, it seems as though you relied on the video to make your point.
    You definitely know what youre talking about,
    why throw away your intelligence on just posting
    videos to your weblog when you could be giving us something informative to read?

  3. Hello very nice web site!! Guy .. Excellent ..
    Amazing .. I’ll bookmark your blog and take the feeds also?
    I’m happy to search out so many useful information here in the submit, we’d
    like work out more techniques on this regard, thanks for sharing.

    . . . . .

  4. Hmm it seems like your site ate my first comment (it was super long) so I
    guess I’ll just sum it up what I wrote and say, I’m thoroughly enjoying your blog.
    I as well am an aspiring blog writer but I’m still new to everything.
    Do you have any recommendations for novice blog writers?
    I’d definitely appreciate it.

  5. Hello, Neat post. There’s an issue along with your web site in internet
    explorer, might check this? IE nonetheless is the market chief and a good portion of other folks will pass over your magnificent writing because of this
    problem.

  6. A fascinating discussion is definitely worth comment.
    I do think that you need to publish more on this subject matter, it may not be a taboo subject
    but generally people don’t discuss such issues.
    To the next! Best wishes!!

  7. It is truly a nice and helpful piece of info.

    I am happy that you shared this helpful information with us.
    Please keep us up to date like this. Thank you for sharing.

  8. It’s a pity you don’t have a donate button! I’d
    certainly donate to this superb blog! I guess for now i’ll settle for bookmarking
    and adding your RSS feed to my Google account. I look
    forward to new updates and will share this website with my Facebook group.

    Chat soon!

  9. StacyMoln Wales KaceyBeja
    LeonaShif AC Milan GQDOlaazu
    Margherit Spanien OscarRose
    MaricruzP Atletico Madrid JillEspar
    SantoWald Belgien JulioEej
    ArielBoot Everton ShalandaE
    VanessaWi Liverpool AldaPelsa
    AustinGen England TomasRayn
    JuanitaYu Los Angeles Galaxy HilarioBl
    LouisDpyv Island KaylaAlve

  10. JerrodMor Leicester City WilfredoA
    AdriannaS Argentina Jeannette
    IngeLlcyp Mexico SuzanneKu
    VickeyWhi Juventus MaurineAn
    MaeEdmund Valencia AngelSing
    DaleneGer Schalke 04 JulienneC
    AmelieKit Arsenal JacintoWa
    JohannaRo Belgien VonnieCas
    EvelyneHo Mexico EddieDaec
    AlysaBarr Sverige ChristieQ

  11. It’s perfect time to make a few plans for
    the long run and it’s time to be happy. I’ve learn this publish and if I may I desire to
    recommend you some attention-grabbing things or advice.
    Maybe you can write next articles regarding this article. I want to learn even more issues approximately it!

  12. I’ll immediately snatch your rss feed as I can not to find your e-mail subscription link or
    newsletter service. Do you’ve any? Please let me recognise so that I could subscribe.
    Thanks.

  13. Undeniably believe that that you said. Your favorite justification seemed to be at
    the web the easiest thing to have in mind of. I say to you, I certainly get irked at the same time as other
    people consider issues that they plainly don’t realize about.
    You managed to hit the nail upon the top as smartly
    as defined out the entire thing with no need side effect , other folks can take a signal.
    Will probably be again to get more. Thanks

  14. Currently it sounds like WordPress is the top blogging platform out there right now.
    (from what I’ve read) Is that what you’re using on your blog?

  15. 286339 855456Oh my goodness! a great post dude. Numerous thanks Nevertheless We are experiencing issue with ur rss . Dont know why Can not sign up to it. Could there be anybody discovering identical rss difficulty? Anyone who knows kindly respond. Thnkx 782351

  16. I am extremely impressed together with your writing abilities as smartly as with the layout in your blog.

    Is this a paid subject or did you modify it yourself?
    Either way stay up the nice quality writing, it’s rare to peer a great blog
    like this one nowadays..

  17. Hello, i think that i saw you visited my site so i came to “return the favor”.I am trying to find things
    to enhance my website!I suppose its ok to use some of
    your ideas!!

  18. Oh my goodness! Incredible article dude! Many thanks, However I
    am going through problems with your RSS. I don’t understand the
    reason why I cannot join it. Is there anybody having the same RSS problems?
    Anybody who knows the solution will you kindly respond?
    Thanx!!

  19. Pretty section of content. I just stumbled upon your website and in accession capital
    to assert that I acquire in fact enjoyed account
    your blog posts. Any way I’ll be subscribing to your augment and even I achievement you access consistently quickly.

  20. I enjoy what you guys are usually up too. This sort of clever work and exposure!
    Keep up the amazing works guys I’ve incorporated you guys
    to my blogroll.

  21. First of all I would like to say fantastic blog!
    I had a quick question in which I’d like to ask if you don’t mind.
    I was curious to find out how you center yourself and clear your mind prior
    to writing. I’ve had a tough time clearing my mind in getting
    my thoughts out. I truly do enjoy writing however it just seems like the first 10 to 15 minutes are generally wasted simply just trying
    to figure out how to begin. Any suggestions or tips? Thanks!

  22. Hey! I understand this is sort of off-topic however I needed to ask.
    Does operating a well-established blog like yours require a lot of work?
    I’m brand new to writing a blog but I do write in my journal on a daily basis.

    I’d like to start a blog so I can share my personal experience
    and feelings online. Please let me know if you have any kind of recommendations or tips
    for new aspiring bloggers. Appreciate it!

  23. You need to take part in a contest for one of the highest
    quality websites on the internet. I am going to highly
    recommend this web site!

  24. Hello there, just became aware of your blog through Google,
    and found that it’s truly informative. I’m gonna watch out for brussels.
    I’ll appreciate if you continue this in future.
    Lots of people will be benefited from your writing.

    Cheers!

  25. What i don’t understood is in truth how you are no longer really a lot more
    well-preferred than you may be right now.
    You are so intelligent. You already know thus significantly with regards to this subject, produced me individually believe it from numerous varied
    angles. Its like women and men don’t seem to be fascinated
    unless it’s one thing to accomplish with Girl gaga! Your individual stuffs
    nice. All the time care for it up!

  26. Hello, i think that i saw you visited my website
    so i came to “return the favor”.I’m attempting to find
    things to improve my site!I suppose its ok to use a few of your ideas!!

  27. Hello my loved one! I wish to say that this post is awesome, nice written and come with almost all vital
    infos. I would like to peer more posts like this .

  28. Successful VCs and angel investors have mastered the art of spotting one of the lucky few companies that have landed on a plausible solution, and betting on them when it’s still too early to tell whether they’ll succeed.

  29. I’m really enjoying the theme/design of your web site.
    Do you ever run into any browser compatibility problems?
    A handful of my blog readers have complained about my blog not working correctly
    in Explorer but looks great in Chrome. Do you have any advice to help fix this problem?

  30. Nice post. I was checking constantly this blog and I am impressed!

    Very helpful info specially the last part :)
    I care for such information a lot. I was looking for this certain info for a very long time.
    Thank you and best of luck.

  31. Having read this I believed it was rather informative.
    I appreciate you spending some time and energy to put this information together.
    I once again find myself spending way too much time both reading and commenting.
    But so what, it was still worthwhile!

  32. I was curious if you ever considered changing the layout of your website?
    Its very well written; I love what youve got to say. But maybe you could a little more in the way of content so people could connect with it better.
    Youve got an awful lot of text for only having 1 or 2
    images. Maybe you could space it out better?

  33. I do consider all the concepts you’ve presented in your post.
    They’re very convincing and can certainly work. Nonetheless, the
    posts are very short for newbies. May just you please lengthen them a little from next time?
    Thank you for the post.

  34. [url=http://www.bloggerfree.com/forum/topic/169805]www.bloggerfree.com[/url] [url=http://socearn.com/blogs/2211]socearn.com[/url] [url=http://www.cityevents.tv/blog/141925/manchester_united_tr_ja_loew_sade_att_han_skulle_stanna.html]www.cityevents.tv[/url] [url=http://www.whitetail-tales.com/app/blog/view/id_492828]www.whitetail-tales.com[/url]

  35. Hi there very cool blog!! Guy .. Excellent .. Wonderful ..
    I’ll bookmark your blog and take the feeds additionally?
    I am glad to search out a lot of useful info here within the publish,
    we’d like develop extra techniques on this regard, thanks for sharing.
    . . . . .

  36. Hello would you mind letting me know which hosting company you’re working with?
    I’ve loaded your blog in 3 completely different browsers and I
    must say this blog loads a lot quicker then most.
    Can you suggest a good web hosting provider at a reasonable price?

    Kudos, I appreciate it!

  37. Good day! Do you know if they make any plugins to assist with SEO?
    I’m trying to get my blog to rank for some targeted keywords but I’m not seeing
    very good success. If you know of any please share.
    Kudos!

  38. Hmm it appears like your site ate my first comment (it was
    super long) so I guess I’ll just sum it up what I wrote and say, I’m thoroughly enjoying your blog.
    I as well am an aspiring blog blogger but I’m still
    new to the whole thing. Do you have any suggestions for first-time blog writers?
    I’d genuinely appreciate it.

  39. I used to be suggested this website by my cousin. I’m now
    not certain whether this submit is written via him as no one else realize
    such precise approximately my trouble. You’re wonderful!

    Thanks!

  40. Hello would you mind sharing which blog platform you’re working with?
    I’m looking to start my own blog soon but I’m having a hard time deciding
    between BlogEngine/Wordpress/B2evolution and Drupal.
    The reason I ask is because your design and
    style seems different then most blogs and I’m looking
    for something unique. P.S Sorry for getting off-topic but I had to
    ask!

  41. Hi every one, here every person is sharing these familiarity, therefore it’s fastidious
    to read this web site, and I used to visit this blog everyday.

  42. awesome post. I totlly enjoyed it. The entire website is awesome. We are a mortgage broker. We have people great mortgages and other business loan.

  43. Aw, this was a very good post. Taking a few minutes
    and actual effort to make a superb article… but what can I say… I procrastinate a lot and
    never manage to get anything done.

  44. I really love your blog.. Great colors & theme. Did you build this website yourself?
    Please reply back as I’m wanting to create my very own site and would like to know where you got this from or what
    the theme is called. Kudos!

Leave a Reply

Your email address will not be published.