Finding the right angel – redux

December 26, 2013

Florida Trend  has an interesting piece about the entrepreneurial ecosystem in our state that highlights the Florida Angel Nexus and the incubator at UCF.

The Florida Angel Nexus has teamed up with UCF’s Business Incubator Program and other groups such as the Tamiami Angel Fund, the Florida Institute for Commercialization of Public Research, and the Florida Next Foundation in order to connect qualified companies with the mentorship and capital needed to create a viable company and product…

The Florida Angel Nexus’ partnership with UCF is already seeing success; it has closed three deals, and is on track to meeting its goal of investing $1 million by years end. With this team, the Nexus plans to make Florida the next major innovative ecosystem in the U.S.

The Florida Trend article floats a distinction between angels and VCs – the former provide experience and guidance while the latter provide only capital – that doesn’t really match our M.O. or the early-stage investors with whom we work.

As a matter of fact, the management teams at our portfolio companies typically value our experience, guidance, and extensive network (which includes many angels who invest in BPV and work with our portfolio companies) even more than our capital.

Early stage investors don’t always fit neatly into angel or venture capital categories, and can take varied approaches to working with entrepreneurs.

In Finding the right angel we covered Scale Finance’s six categories of angels and “The Chaperone Rule”:  the odds of a startup company succeeding are significantly enhanced when the company has a chaperone from the get-go, an experienced guide on the trip from the embryo to the IPO.  Here’s an excerpt:

Good angel investors provide much more than capital.  Their networks and reputations can assist early stage companies with introductions to additional sources of financing, expertise, customers, and strategic partners.  It’s a long and difficult journey from idea to successful business, and entrepreneurs need partners who intuitively understand the right kind of support to offer over the long term during the inevitable challenges of building a business.

Angels have varied experiences, interests, strategies, reputations, and (in the case of angel groups) cultures.  Choosing the one who best fits requires as much rigor and thoughtfulness as any decision an entrepreneur makes.

Serial angels – perhaps the most productive type, often adds significant value to the companies in which they invest because they’ve done it before.

Tire kickers – the opposite of serial agents. They lack a genuine commitment to angel investing – at least at present – but they’re using the process as a means of educating themselves.

Trailblazer angels – experienced investors, typically partners in investment banks and venture capital firms who incubate deals too small for their firms while maintaining a link to their company for larger/later rounds.

Retired angels – business executives with enough personal capital to enable them to quit their jobs and “retire,” but who remain perfectly capable (and eager) to keep up in the so-called rat race.

Socially responsible angels – investors who are interested in doublebottom-line investing – that is, doing well by doing good.

Angel syndicates – groups who episodically invest together, joining their capital for more influence in more material deals.

N.B.  In 2013 the Business Incubation Program at the University of Central Florida (UCF) was named Business Incubator Network of the Year by the National Association of Business Incubators and also was selected as one of four Best Under the Radar Business Incubators by Entrepreneur magazine.

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