ACA Membership Director Sarah Dickey interviewed Ellen Weber recently as part of a series of ACA member profiles.

Meet Ellen Weber – ACA member angel investor, Executive Director of Robin Hood Ventures and Executive Director of the Temple Innovation and Entrepreneurship Institute. Ellen provides insight into how the 16 year old angel group maintains its edge for investing in dynamic markets.

How and when did you get involved in angel investing?

Robin Hood was founded when two long-time friends attended a local pitch event with little structure and no follow up.  They wanted to create an angel group that would not only get deals done as effectively as possible, but would also work closely with the entrepreneur after investment.  I agreed to help them start this new angel group with an initial role of serving as the back office to get things off the ground. Very quickly my role grew and I also became very active in the local entrepreneurial community. 

By: Jeff Solomon, CPA, CVA, Managing Partner, Katz Nannis + Solomon, PC

Early stage investors are often asked to sit on boards, and many sets of investment terms require that outside investors sit on the key board committees.  But what’s involved in being on an Audit Committee, and how do you do it right?  Let’s take a look at examples of an effective working relationship with the auditor and the types of questions you should be asking your auditors when you meet to add value to the governance process and to the company you represent:

By: Ken Kousky, BlueWater Angels and Krista Tuomi, American University

Federal and state governments are beginning to recognize the important role that startups play in job creation. (A recent article by Neumark, Wall, and Zhang notes that they account for almost 20 percent of gross job creation.) For these startups, early stage financing is increasingly necessary given the shortened product life cycle - businesses can only succeed by moving rapidly from ideas to product distribution.  Banks do not provide this type of funding; family and friends rarely have enough; and the public stock market is only an option for established firms. The 2014 Joint Small Business Credit Survey Report emphasizes this. In particular, it finds that the majority of small firms (under $1 million in annual revenues) and startups (under 5 years in business) are unable to secure any credit. (The average approval rate from all sources was only 38%). Not surprisingly, lack of credit availability was the top listed challenge for startups in 2014.

Sometimes new regulations create the need for market leaders to adjust, so that efficiencies for all can continue.  One such example is a set of rules set by the Securities and Exchange Commission for “generally solicited” offerings.  The rules – or really the market interpretation of the rules – have created so much confusion that the Angel Capital Association decided to develop a certification program for part of the angel market, angels who invest through angel groups, so that angels and entrepreneurs can actually do generally solicited deals.

When Congress passed the JOBS Act in 2012 they allowed for the very first time the ability for entrepreneurs to raise equity capital by advertising rather than through existing relationships in private.  Fearing fraud, Congress also required that companies take “reasonable steps to verify” that investors in these deals are accredited investors and asked the SEC to set the detailed rules.  The SEC’s rules said that copies of income or wealth documents or certifications by accountants and lawyers would work, as would a complicated set of methods that look at the facts and circumstances of the deal.

By: Elizabeth Usovicz, General Manager of Transaction Commons, as part of a series she writes for ACA aimed at entrepreneurs, "Your Pitch is Just the Beginning."

Carmine Gallo, author of “Talk Like TED”, calls ideas “the currency of the 21st century.” It’s true that consistently refining and taking action on relevant ideas leads to business innovations and scientific breakthroughs.

For entrepreneurs with an innovative business concept, the process of refining a big idea and taking relevant action includes the ability to synthesize input from a wide range of sources. Input from too many sources can leave you feeling as though there are a hundred voices whispering in your head, muddying your refinement process and making it harder, not easier, to make decisions and take action. Making sense of this varied input requires having a framework for filtering and evaluating those voices.  Here are three framework components to consider.

By: Marianne Hudson, ACA Executive Director

The reality show “Shark Tank” has become one of the most popular programs on television and has helped the wider public hear the term “angel investor” and grasp what they do.  And likely the Sharks have invested in and coached many entrepreneurs, helping those companies become successful.

But I really liked a news article last week - “Dallas Health Startup Investors Are Angels, Not Sharks” - because it distinguished many angel investors from the maneuvering and other drama that happens on the TV show.  In my opinion, the article nailed it:

By: Marianne Hudson, ACA Executive Director

This post originally appeared on Forbes.com. 

Two industry powerhouses - America Online Co-Founder Steve Case and former Hewlett-Packard CEO Carly Fiorina - made a splash recently when they led a report, “Can Startups Save the American Dream?

I very much like this report from the University of Virginia’s Miller Center and the ideas in it. However, they missed a significant piece of the answer. While the report focuses on how entrepreneurs can kick-start the economy, it overlooks what we need to do to support the angel investors who fuel the entrepreneurs creating our country’s jobs and innovations.

The contribution of angel investors is huge. Angels have backed some of the most important companies in America including Facebook, Google, Amazon, Twitter and Starbucks. Angels supply nearly 90 percent of outside equity to startup companies, after friends and family.  In 2013 angels invested nearly $25 billion in about 71,000 companies in every state. Without angel investors, many of these companies would not be around.

By: Christopher Mirabile, ACA Board and Launchpad Venture Group

This post originally appeared on Inc.com

Most people are pretty confused about what crowdfunding is and is not. Here are the ten key concepts entrepreneurs and investors need to understand.

1. Product crowdfunding and equity crowdfunding are really different.

Most people still confuse them. Product crowdfunding is done on sites like Kickstarterand Indiegogo. It allows you to finance innovation directly, at the product level; contributors pre-purchase products or simply donate. Conversely, with equity crowdfunding investors take stock ownership in the company making the product, which is very different and quite a bit more complicated. Equity crowdfunding is not yet fully democratized for ordinary investors, but sites like AngelList and WeFunder allow larger (accredited) investors to do it.

By: Elizabeth Usovicz, General Manager of Transaction Commons, as part of a series she writes for ACA aimed at entrepreneurs, "Your Pitch is Just the Beginning."

Asked to explain his investment philosophy to a group of entrepreneurs, the founding partner of an investment fund put it this way: “There are only two things I care about: Can you make product, and can you sell product?”  If you’re the founder of a startup, you know first-hand that sales drive revenue, and revenue drives both investment and growth. How good are your sales skills?

All sales are the result of creating a connection with the buyer, and the best salespeople are adept at developing meaningful business relationships with their prospects. Here are some essentials to developing relationships like a sales pro.

As we say goodbye to 2014 and jump in to 2015, we would like to add our congratulations to all ACA members with recent growth, investments, and exit news!   Here are a few recent stories below:

Big Returns!

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