ACA Blog

Angel Insights Blog

Serving as the voice of the North American angel community, the Angel Capital Association is pleased to bring you our Angel Insights Blog, featuring commentary on startup investment trends, the latest on public policy affecting entrepreneurial investment, and other topics top of mind to active accredited investors.

We encourage you to participate in the discussion.

By: Jean Peters, ACA Board Member and Managing Director of Golden Seeds

Paul Singh, the ubiquitous startup investor, generously participated on two panels at the Angel Capital Association’s 2014 Summit in Washington, DC a couple of weeks ago – and came with a message: angels must pursue his (tech-enabled and focused) way -- or hit the highway.

At least that was the takeaway he reported in his recent blog post: Angels and Angel Groups: Adapt (or Get Out).

By: William Carleton, Counselor @ Law, and member of ACA Public Policy Advisory Council

Keith Higgins, the relatively new Director of the Division of Corporation Finance, delivered a speech at the closing session of the 2014 Angel Capital Association Summit – and was it a doozy!

A huge issue for angel investors is the "reasonable steps to verify" accredited status that is part of new Rule 506(c), which permits issuers to engage in "general solicitation." The issue was a focus of at least two breakout sessions at the Summit, including one Thursday moderated by ACA policy chair Mike Eckert that I participated in with the gifted lawyers Peter Rosenblum and Rob Rosenblum (not related), and an excellent breakfast briefing Friday from K&L Gates lawyers Gary Kocher and Kevin Gruben.

By: Marianne Hudson, ACA Executive Director

We had a great gathering of angel investors last week at the ACA Summit. The event in Washington, DC attracted more than 600 people, from 30 countries and 44 American states. Thank you to the Summit planning committee for putting together a terrific agenda and speakers, and also to our partners and sponsors, which added value and expertise to the event.  Everyone will have different highlights for the Summit, but here are mine:

  • Great networking events. Thursday evening’s ACA reception was at 1776 DC accelerator, with great food (from an entrepreneurial food incubator!) and opportunities to meet some of 1776’s entrepreneurs. I loved the reception for women investors at Foley Hoag law firm, as we saw a huge increase in the proportion of women at the Summit! The Canadian Embassy also hosted a great dinner for international guests, which also included a tour of Washington monuments.
  • Keynote presentation by Michael Chasen, co-founder of Blackboard, Inc and now CEO of SocialRadar. How many people can talk about leading a company from two people in a brownstone to 3,000 employees in a publicly traded company? His “5 Pieces of Unconventional Wisdom I Learned Building a $2B Company” had great insights and was hilarious.  

By: Sarah Dickey, ACA Membership Director

Jean Hammond has done more for women entrepreneurs and women angels than perhaps any other angel investor. We say this as we award Jean, a founder of the Boston chapter of GoldenSeeds and member of Hub Angels and LaunchPad Venture Group, our most prestigious honor - the 2014 Hans Severiens Award.

By: Sarah Dickey, ACA Membership Director

Look for EyeVerify to turn heads and open eyes in the future as more companies and consumers use its eye-recognition software to unlock their tech devices.

This Kansas City, Kan., company is the winner of ACA's 2014 Luis Villalobos award, recognized as the most ingenious and innovative idea recently financed by angel groups that are ACA members. The award is named in memory of Mr. Villalobos, the founder of Tech Coast Angels, and a true “leading light” in the angel field. The award was presented to EyeVerify by Dave Berkus, a member of Tech Coast Angels and Tim Ryan of ACA partner OTC Markets.

By: David Verrill, Hub Angel Investment Group, LLC & Chairman – Angel Capital Association

Noted New England entrepreneur and angel investor Ty Danco recently changed his method of angel investing away from the more traditional angel group process to AngelList. His thoughts were captured well in his interview on the Frank Peters Show in April entitled “Ty Danco, Throwing in the Towel”. Ty’s reasons were simple, he has his own growing startup that demands his time – making him more of a passive investor; he is happy to follow some of the most famous angel investors who are putting money to work on accredited portals in a highly curated fashion; and geographical diversification never hurts. By innuendo, Ty’s change cast a cloud on traditional angel investing through the group structure. It shouldn’t have.

By: Sarah Dickey, ACA Membership Director

I recently had the great experience to work with the judges for the Luis Villalobos Award and see many wonderful companies that ACA members are supporting. Three finalist companies were selected from the nominations, with the winner to be announced on March 27th at the 2014 ACA Summit in Washington, DC, during a special awards ceremony. The Luis Villalobos Award recognizes the most ingenious and innovative idea recently financed by an ACA member.

This year’s finalists are 7AC Technologies (Boston), EyeVerify (Kansas City), and Localytics (Boston). Each was nominated by an ACA member that has invested in the company. The award is named in memory of Luis Villalobos, who was known for actively investing in and mentoring ingenious, creative, and innovative startups.

By: Bill Payne, Vegas Valley Angels and Frontier Angels

It is an exciting time to start the journey to angel investing. For many there is nothing more rewarding than being able to invest in an early stage company, share your knowledge, insights and connections with entrepreneurs and have a hand in their success. At the same time, learning how to be a successful angel investor requires dedication. Naturally, most angels start the process with a myriad of questions.

2014 is a crucial time for angel investors. We’ve already made a big deal about the SEC’s new rules on verifying accredited investor status in generally solicited deals, but now there is a possibility of an even more existential issue for angels - many of us may no longer be accredited investors if the SEC follows the requests of organizations that want to increase the requirements for being accredited. Sometimes when it rains, it pours!

The potential higher bar could eliminate 60% of angel investors, reducing the pool of capital for startups. Currently to be an accredited investor, an individual must have an annual income of $200,000 or net worth of $1 million, not including their home (see the official definition here). If these thresholds were raised for inflation, they would go up to $450,000 income and $2.5 million in net worth.

By: David Verrill, Hub Angel Investment Group, LLC & Chairman – Angel Capital Association

I recently had a conversation with a “recovering” venture capitalist who has been out of the game for five years, and was reminiscing about the good old days. The conversation quickly turned to the ever changing early stage ecosystem, and the increasing slice of the pie that angels and angel groups were eating. He asked if there was still a rift with VCs. I told him we were getting along a lot better now, for a lot of reasons. Here are the five I cited:

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