“Angel investing - one of the leading sources of capital for the innovation economy - is undergoing rapid transformation and growth, with new social media entrants, legislative changes, and the explosion of the start-up environment.” - Angel Capital Association Summit 2013
At Startup Grind 2013 conference in Silicon Valley I hosted the “No Harps or Hallows in Angel Funding” section designed to explore the changing early stage funding context. Coming up in April, ACA Chairman David Verrill and Board Member Jean Peters have invited me to join a related panel: Crowdfunding: Wisdom of Crowds or Greatest Fool Theory? at the Angel Capital Association’s 2013 Summit: Navigating Change for Angel Success.
Click through for a collection of insight from these great exchanges with:
Jessica Scorpio, co-Founder, Getaround
Jeremy Liew, Partner at LightSpeed Ventures
Jeff Clavier, Partner at SoftTech VC, and
David Verrill, Chairman of ACA, Founder/Managing Director at Hub Investment Group, LLC
Here is an idea: Let’s take a woman from Canada, transplant her to Silicon Valley and disrupt the automobile industry. That is the story of Jessica Scorpio and Getaround, her startup in “sharing economy” that has attracted over $14-million in investment.
“The biggest force of change in early stage investing right now is that individual investors are getting less disciplined on valuation and that is creating upward pressure on seed and Series A round valuations.” says Jeremy Liew, Partner at LightSpeed Ventures. He cautions, “that a gaggle of small investors is inferior to a lead investor as someone has to have the economic motivation to do the heavy lifting when heavy lifting needs to be done.” This is a man who was ready to invest in SnapChat ($485,000) just 25 mins into his first meeting with them.
Jeff Clavier has a top 20 Cdling Score out of more than 22,000 investors and founders that we have ranked for California and when I asked him for his views on crowdfunding (20 min mark in this video) he says that his firm in in favor. He sees it as the institutionalization of the family and friends round and another source of validation for business models and demand. And certainly not a source of competition for established early stage investors.
David Verrill shares this perspective:
“The ACA Summit in San Francisco this April 16-18 has a whole “sleeve” of sessions devoted to the (expanding) ecosystem that is involved in helping startups get funding and the resources they need to be successful.
The ACA has expanded its mission to serve accredited angels, angel
groups, family offices, and platforms. There may well be other players in this space in the future. The value proposition of each must be proven out through the success of their investment in time and money. Personally I think the more important aspect of investment is the time (and expertise).
The obvious topic to discuss is Crowdfunding. The ACA is bifurcating
crowdfunding into accredited and non-accredited, and is focusing on the accredited side of the equation.
The US startup space is a $50 billion market (angels and VCs), and with the new players that will more than likely expand. The notion of angels (or VCs or any player in the ecosystem) having their space threatened is taking more of a contractionary view. Sure the existing players will have to modify how they work, who they partner with, etc., but there is room for everyone to contribute to startups, and the benefits they bring to their investors, employment, and our economy.”