November 17, 2008

The Angel Scoop

Hey everyone, here’s the maiden launch of my blog for FundingUniverse. This is my chance to rant and rave on the subject of Angel Investing: Trends, Deals, Happenings, Phenomena and Kooky Stories.

Where am I coming from?
You can check out my Web site at but please allow me to get this background stuff out of the way. I’ve put in 34 years of hard labor in start-ups, turnarounds and fast-growth technology companies. I work mostly with IT and BioSciences companies, investing in them, helping them find money and sometimes as a board member or advisor. I’m on the board of several angel groups, technology incubators and have advised almost 100 companies, and have co-founded several successful tech companies, and I am most proud of Knowledge Adventure, which we sold for $100 million in 1996. Soon after I was an early shareholder in Bill Gross’ Idealab, which quickly became the most famous tech incubator in the world, and recently has morphed into one of the most notable tech operating companies in the U.S. Idealab created and sold it to Yahoo for $1.6 billion, and now runs a few dozen companies, among them the hottest solar company, eSolar, new automotive company, Aptera Motors, and robotics company, Evolution Robotics.

What me worry?
Okay, I won’t dodge the question. Worried? Well, just a little. How’s this economic disruption affecting angel investing and entrepreneurial companies? Well things are going to be more difficult… plenty. Right away, any borderline investor deals are probably going to get killed, and the deals that do get done will be at terms a lot more investor favorable. However, for those companies that have an oh-my-gosh, true competitive advantage in a large market that’s screaming for a solution, don’t worry, you’re still good. While many angels have pulled back or are waiting, there still are investors who need to keep their capital employed. I mean, even if billions of dollars of capital has been withdrawn, there still are tens of billions remaining that must be employed, right? In any event, I suggest you make plans to keep yourself busy now though mid-January, cause once we hit Thanksgiving, deal closings will be few and far between.

I like “Recession-Resistant”
There is no recession-proof. But no matter whether you’re entrepreneuring or investing, make sure your company does something truly important. No…wait, you better make sure it provides something that’s absolutely essential to the buying public. If it isn’t, go find a way. The next year or two may not be your best years, but they can be years that you survive and build. I call that recession-resistant, but you may want to look for satisfaction in simply getting by.

Question: What’s a word for high gas prices and the war in Iraq? Answer: Nostalgia
What I’m saying is if you look back six months, it looked like high gas prices and the war in Iraq were making our lives unbearable. Now… I betcha you wish those were still our big problems!

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