Archive for February 2016

A few weeks ago I provided a comparison of different debt options for startups.  This generated a conversation about debt options for angels and angel groups and whether there were cost-effective ways to tap extra liquidity when needed.  There certainly are a broad range of debt offerings emerging as non-bank financial service providers all look for substantial yields.

One interesting method is the asset backed financing offered by Merrill Lynch/ BOA and Morgan Stanley, among others. Broker/dealers have always had margin accounts where investors could borrow funds to buy stocks or bonds. Using one’s existing exchange listed shares as collateral for startup financing is new, however. (This refers to investors’ stocks, not those of the entrepreneurs.)

By: Marianne Hudson, ACA Executive Director

Many angels, startups, VCs and the startup ecosystem have asked for more clarity about demo days for a couple years now.  These events seem to meet the definition of “general solicitation” and most investors don’t want to invest in companies that publicly advertise, but they have seen demo days as an important part of our world for decades.  The confusion may get clarity because of the work of a bi-partisan group of Members of Congress.

The Angel Capital Association supports HR 4498, the Helping Angels Lead Our Startups Act (HALOS Act) and want to thank Reps. Chabot, Sinema, Hurt and Takai for introducing this bi-partisan bill last week.  We believe the HALOS Act helps more job-creating startup companies raise the funding they need because it removes a barrier to funding.  There has already been discussed in a hearing of the House Financial Services and could be on a positive track.  A similar bill is also in the Senate, with bi-partisan sponsors as well.)

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

Yes, there's Title III under the JOBS Act, promising equity crowdfunding (think Kickstarter or IndieGoGo, just not restricted to awards or products, but instead offering ownership in the company); yes, there's Reg A+, also bequeathed by the JOBS Act; and there are a plethora, now, of state crowdfunding laws that lower the bar to who may invest in private companies.

By: Marianne Hudson, ACA Executive Director

Know someone who would add great value to ACA leadership?  Could be you, could be someone else!  Each year ACA looks to add talent to its Board of Directors to keep the organization strong, growing, and evolving.  The board is now seeking nominations from the ACA membership at large of people whom you believe have great value to add to the ACA’s mission.  We seek members of the angel investor community who have demonstrated unusual ability to organize and lead others in angel investing activities.  We particularly seek nominations of people with experience in marketing, deal collaboration and syndication, building membership in angel groups, and in wielding political influence in high places.  We seek persons of high activity level, energy, and willingness to serve in order to advance the ACA’s mission.  Email your nominations to Dick Reeves, Chairman of the ACA Governance Committee, by February 22, and include your own comments about your nominee, along with the names and contact info of two others who know the person well and can attest to their value. You may nominate yourself, but please adhere to the two-person recommender formula if you do.

Subscribe

Tapping into America’s Biomedical Seed Fund by Ethel Rubin  on  February 12
The Seraf Method to Valuing Startups: Exit Practicalities by Ham and Christopher LM  on  January 16