In case you haven’t heard, the SEC will revisit the definition of accredited investor soon and there is a possibility the financial thresholds could be raised so much that 60 percent of all accredited angel investors would no longer qualify to make angel investments. If this happened, this would have a huge impact on the high-growth startups that create the majority of jobs and innovations in this country.

We need angels, entrepreneurs, and all parts of the startup ecosystem to let the SEC know how important it is to keep the angel capital pool large and healthy. ACA has created a set of letter templates and other information so you can easily write the SEC and other policy makers. Check out our “Protect Angel Funding” web page for all details.

At issue is the potential for the SEC to raise the financial thresholds for individual accredited investors for inflation – so net worth requirements could increase from $1 million to $2.5 million and annual income thresholds could grow from $200,000 per to about $450,000. By the SEC’s own estimates, about 60 percent of households would no longer meet accredited investor requirements with the net worth increase alone. 

By: Sarah Dickey, ACA Membership Director

Congratulations Upstate Carolina Angel Network on an 11X Exit with Selah Genomics!

Editor’s Note: Welcome to a new periodic feature – ACA Member Exits. We want to help you share the great news about your exits with your ACA colleagues and the public. Please send funding and exit news to ACA so we may share it and if you have any questions about this feature please contact Sarah Dickey.

ACA member group Upstate Carolina Angel Network (UCAN) of Greenville, SC is celebrating their April 2014 11X exit of Selah Genomics. UCAN is an angel network of about 50 members that has invested over $9 million in 33 companies since forming in 2008. Selah Genomics has sold to EKF Diagnostics, a publically traded company in the United Kingdom. Selah Genomics is a molecular and clinical diagnostics company focused on personalized medicine. After a six-month lock-up and future earnout –for which the key milestones are largely in place – this $70 total acquisition could represent an ~11X exit for UCAN investors.

The foundation for this UCAN exit began at the group’s first presentation meeting in 2008. During that meeting the group met and invested in CEO Michael Bolick’s company – Selah Technologies. Although eventually sold in a private stock deal to Lab21, the original Salha acquisition has not yet brought liquidity to its investors. Fast forward to 2013 when, based on their previous working relationship, CEO Bolick approached UCAN for support in spinning out a new company and they gladly accepted the opportunity. As UCAN Director Matt Dunbar explained, “We knew the CEO Michael and we knew the business, so due diligence and the investment process moved quickly for us.”

Meet ACA Member Katherine O’Neill - ACA Board Member and New Jersey Angel Network Executive Director

Editor’s Note: Welcome to a new periodic feature – ACA Member Profiles. We want to help you create the connections you need and get to know ACA angels and groups with this glimpse into membership.  If you have any questions about this feature and/or have an idea for a future member profile please contact Sarah Dickey

How and when did you get involved in angel investing?
In 1998 and 1999 I was doing consulting for early stage bio-companies and was offered stock as payment. I still have some stock papers for companies that are no longer in business These were my first investments in early stage companies. I started to become active as a check-writing angel in 2003 when I joined Jumpstart New Jersey Angel Network. Jumpstart had just formed with a total of 12 members.

By: Sarah Dickey, ACA Membership Director

2014 has been a year of growth for ACA.  Over the past year ACA has focused on growing its footprint as the early-stage investment landscape has evolved.  ACA members now include accredited platforms and individual angels, in addition to angel groups. We are pleased to share with you the new ACA members. 

More than 12,000 active accredited investors now below to ACA - the most ever and making ACA the largest angel organization in the world. So far this year ACA has welcomed 30 new member groups across our long standing membership categories including Provisional Members (angel groups just being formed but not yet active), Full Members (active angel groups), and Affiliates (organizations that promote the growth of the angel investing field).  Representing 18 US states and one Canadian province, these new members are growing active capital in their communities to support innovative companies. 

A key part of ACA's growth is new member categories: accredited platforms, equity marketplaces focused on accredited investors, and individual investors.  Eleven accredited platforms have joined ACA this year.  AngelList, FundersClub, and SeedInvest were the first three and now many new organizations are forming and joining. 

Individuals who are not connected to angel groups are also new to ACA and we are happy that these angels from 18 US states and one Canadian province are now members. For their privacy, we are not sharing their names and contact information.  

By: Marianne Hudson, ACA Executive Director

We have good news. Several ACA members have asked about the "1202" exemption that expired December 31, 2013. The Senate Finance Committee approved the 100% exemption of gains in investments in qualified small businesses earlier this month as part of its "tax extenders" bill. We have even better news - the extension is for two years and would be retroactive to January 1, 2014.

We’re looking out for you. The Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act still needs to be approved by the Senate and House, but it appears to have bi-partisan support. More details on the bill are in the Senate Finance Committee website.

For those of you who are not awar of this tax exemption, its formal name is Qualified Small Business Stock, and full IRS information is here.  If you don't know about it, at least make sure that your accountant does!  It can be a great tool to catalyze investment in job-creating startups and help our economy.

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.

Subscribe