Exits

By: Marianne Hudson, ACA Executive Director

The Angel Capital Association has some wonderful member angels and organizations and I’m glad so many of them actively share their knowledge and deals with other ACA members.  If you haven’t taken a tour of media coverage of ACA members this year, it is worth your time. About 60 media stories about ACA members were published in the first ten weeks of 2017, and here are a few of my favorites:

By: Marianne Hudson, ACA Executive Director

Three ACA member organizations have really put on their hiking boots with excellent adventures and exits in late 2016.  On top of some really great investor returns, they also include a couple of important social returns that I really like.  Let me tell you about them:

I have to admit that while I have really enjoyed being an angel investor and meeting such interesting people, but the real fun didn’t start until I had an exit.  I was lucky enough to be one of 40+ investors in EyeVerify, which was acquired in September by Ant Financial, a subsidiary of Alibaba for more than $100 million.  There’s nothing like getting that return check – or hearing the ins and outs of the acquisition from the entrepreneur and angels on the board!

This made me wonder how many other ACA members also had this kind of fun.  In a quick bit of website research, I found an incomplete list of acquisitions and IPOs for portfolio companies of ACA members in 2016 below.  These ACA members are from throughout North America, not just the usual venture hotspots.  I don’t know how many angels were involved in these exits, but congrats to them and the entrepreneurs who led those companies.

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

This post originally appeared on Forbes.com

Entrepreneurial finance has changed more in the last five years than the previous 100. The evolution is coming so quickly these days that it almost feels like the opening credits of the Big Bang Theory television show.  It may be, though, that 2016 speeds up the changes an innovations.  I can’t think of a more exciting era for angel investors.

So what does this all mean and what should we be on the lookout for? As the New Year begins, here are my top themes and questions for how the rapidly evolving world of entrepreneurial finance may impact angel investing:

Over the holidays, I took a look at the “Member News” section of our website, where we catalog the media coverage of ACA member investors and organizations and found more than 250 stories in 2015 about exits, new investments, milestones, economic impact, investor features and much more.  ACA members are getting it done, and done well!

By: Marianne Hudson, ACA Executive Director

Angel group valuations and deal sizes are on a huge growth trajectory according to the HALO Report through the third quarter of 2015.  The report, released today by the Angel Resource Institute at Willamette University, shows the median seed stage valuation at an all-time high of $4 million, a 33 percent increase over 2014.  Some of this is reflected in median round sizes, which more than doubled in one year - $350,000 in Q3 2014 to $725,000 in Q3 2015.

These increases are a really big deal for the angel group community, and I hope that these trends reverse themselves soon.  As ARI’s Vice Chairman of Research Rob Wiltbank said, “This report reinforces the trends that we have been reporting on for the past several quarters, particularly the rise in all round sizes and pre-money valuations. These trends have a significant impact on the way that angels and entrepreneurs plan for the future when raising capital.”

By Hambleton Lord, ACA member, managing director of Launchpad Venture Group and co-founder of Seraf Investor.  This blog post originally appeared on the Seraf blog, as part of their “Angel 101” series.

Experience is what you get, when you don’t get what you want. Fifteen years ago, when I made my first angel investment, I wish I knew then what I know today. As a newly minted angel in 2000, I assumed that angel investing would be easy to jump into and become successful at. I was partially right… it was easy to jump into. Unfortunately, it wasn’t that easy to become successful.  

By A.J. Watson of Fundify, LLC in Austin, TXThe article originally appeared on Medium.com and provides new analysis on the dataset behind the 2007 study "Returns of Angels in Groups" by Rob Wiltbank. 

At Fundify, we spend a lot of time thinking about and researching what makes a successful angel investor. We find some really interesting data through that process and I’m excited to share it with you. Let’s start with the issue of due diligence.

Spoiler alert: It matters. A lot.

Don’t be surprised to see substantially more companies using Regulation A to sell securities through public solicitation of investors beginning June 19, when the SEC’s new “Regulation A+” rules take effect. Why? The new “Reg A+” provides a new option for “mini-IPOs,” allowing companies to raise up to $50 million from investors in unregistered public offerings. Angels benefit it two ways. This is another opportunity to invest or it can help their portfolio companies secure the funding needed to take them to the next level. 

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