How angel ecosystem and angel investors impact internet startups
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Transcript of How angel ecosystem and angel investors impact internet startups
2016/10/10 John Sechrest
Seattle Angel Conference@sechrest
How Angel Ecosystem and Angel Investors impact Internet Startups
John SechrestFounder of Seattle Angel Conference
Facilitator of Startup Weekends
Lean Startup Seattle
Seattle Startups Open Coffee
Founded an Internet Service Provider
Previously Economic Development Director
Economic Development Pathways
Recruitment ( Bring from outside)
Retention and Expansion (Grow what we have)
Tourism (Show what we have)
Startups ( Make new innovation )
Startup EcosystemEntrepreneur Centric
Coworking spaces
Accelerators
Educational programs
Networking programs
Startup Weekend
From idea to growth company
Focused on creating Growth companies
7+ Billion people who have problems to be solved
What makes a good Ecosystem
(ala Dave McClure)
Attitude - Optimism
Mentorship and Education - Knowledge
Universities and Companies - People
Capital, Legal, Finance - Infrastructure
Engineering and Design - Product
Platform and Distribution - Customers
Online Payments - Monetization
IPO / M&A Market - Exits
Building a startup ecosystem funnel
1000 entrepreneur garages ( $10K)
300 Accelerator Startups ( $50K )
100 Seed Stage startups ( $200K )
30 Series A startups ( $1M )
10 Later Stage companies ( $10M )
2 IPOs ( $100M )
If Entrepreneurs are everywhere, then
Angel Investors can be everywhere
From Dave McClure: Solutions for Investors
in new Tech Markets
Increase Number of Investors Increase Frequency of early-stage
investorsIncrease portfolio size/ Decrease check
sizeIncrease frequency of acquirers
Increase the number of Investors Add more new investors Increase the number of deals Build cohorts of investorsIncrease deal flowIncrease the quality of companiesLean StartupStartup WeekendFounder / Team formationIncrease the quality of deals Train investors Create investor perspectiveIncrease the investor portfolios Invest in cohorts
How can we improve investments?
What makes an Angel Investor Different than A Venture Capitalist
Venture Capitalists invest other people’s money
Venture Capitalists take a fee for investing other people’s money
Angel Investors investor their own money
Angel Investors work to minimize overhead on investments
What do Angel Investors bring to the process?
Due Diligence
Feedback to the Entrepreneurs
Perspectives on the Market
Connections to others
Social Validation for other investors
5 types of Group Angel Investing
Angel Networks - 8 networks in Seattle
Managed Angel Funds - Founders Coop
Passive Angel Funds - AoA fund
Active Angel Funds - Seattle Angel Fund
Event Funds - Seattle Angel Conference
What makes for good Angel Investing:
Recognize that investing involves significant uncertainty.
Invest in things you know.
Build a diversified portfolio
Do meaningful due diligence
Support your startups
Make introductions
Seattle Angel Conference Progress
In the 10th Cycle
Invested in 21 companies
Near $2M invested
Over 200 new Angel Investors
Created foundation for the Seattle Angel Fund
What are the ecosystem roles of Angel Investors
Increase the success rate of growth companies
Increase the quality of startup founders
Decrease risk for startups
Connect startups to resources
Provide perspective
How does the Angel Conference Work?
40 Investors 50% New
50% Previous Investors50 Companies12 week review24 Quarter Finalists
12 Semi Finalists6 Finalists1 Investment2-3 Side dealsPublic final Event
Benefits of the Conference
Give Investors perspective
Small risk to learn about Angel Investing
Connects new Startups with new Angels
Helps Startups get stronger
Creates better deal flow for other Angel Groups
Creates more Angel Investors for other Angel Groups
Creates stronger leadership for startups
Evolution of a Startup
1st - Seattle Angel Conference
2nd - Seattle Angel Fund
3rd - Specialized Angel Network
4th - Passive matching Fund
5th - Venture Series A
Seattle Angel Conference Progress
In the 10th Cycle
Invested in 21 companies
Near $2M invested
Over 200 new Angel Investors
Created foundation for the Seattle Angel Fund
Seattle Startup Scene
11 angel groups
45+ Coworking facilities
5 Active VC’s
Hundreds of events each month
Questions?
Res
ourc
es
Rob Wiltbank Data http://www.willamette.edu/~wiltbank/
Wade Brooks http://willamette.edu/mba/faculty-research/faculty/brooks_w
ACA https://www.angelcapitalassociation.org/
ARI http://www.angelresourceinstitute.org/
Halo Report http://www.angelresourceinstitute.org/research/halo-report/halo-report.aspx
Gust.com
Angel.co
Seat
tle
Res
ourc
es
http://www.funding-quest.com/wp-content/uploads/2016/04/PNW-angel-groups-2015-investments.pdf
http://startupseattle.com
http://startupseattle.com/resources/map-seattle-startup-ecosystem/
http://geekwire.com
Geekwire “200” - http://www.geekwire.com/geekwire-200/
http://www.geekwire.com/startup-list/
Ecos
yste
m
Res
ourc
es http://www.angelblog.net/Startup_Funding_Sources_of_Financing.htmlhttp://www.slideshare.net/dmc500hats/lean-little-cockroach-startuphttp://www.slideshare.net/simeons/patterns-of-successful-angel-investing-8306787/39http://www.slideshare.net/dmc500hats/hack-osaka-innovation-strategies-for-regional-startup-ecosystems/2-BE_THE_NAIL1_BE_THEhttp://www.slideshare.net/dmc500hats/farming-unicorns-building-startup-investor-ecosystems-dublin-june-2016/45-Questions_Comments_More_Info_http500cohttp://www.slideshare.net/TimDick/state-of-venture-capital-and-angel-markets-2016https://www.pm360online.com/wp-content/uploads/2016/04/f1_chart.jpg
Sta
rtup
Pat
hway
s Companies attract talent to Seattle.People at companies get idea to start a companyCome to Open Coffee or to other networking eventsPerhaps come to a Startup Weekend to explore ideaLeave JobFind TeammatesJoin Coworking spaceApply to acceleratorsApply to Angel GroupsGrow companyDo Merger