Angel Insights Blog

We all collectively dodged a bullet after the collapse of Silicon Valley Bank which threatened to destroy a whole generation of startups. Had the US Treasury and Federal Reserve Bank not intervened quickly, many companies would have lost their hard-won deposits and the market collapse would have made it extremely difficult for them to access new financing. Many more companies in and outside the tech sector would have struggled as their products and services stopped working because of reliance on these newly defunct tech companies’ products. While the short-term impact would have been dramatic for our entire economy, the long-term impact would have been far greater because it would have likely resulted in an unparalleled mass extinction event covering a whole generation of companies.

Working harder won’t solve poverty, pollution, social inequality, and dozens of other major challenges we face on this planet. If we want to feed, clothe and house 8 billion people, address the host of health, environmental and other issues, good old fashioned elbow grease isn’t going to do it. But if we become effective at commercializing innovative solutions of passionate entrepreneurs, we stand a chance.

We all know that investing in startup companies is inherently risky. Over half of early-stage investments typically fail to return any capital, with the top 10% usually returning 85-90% of all the cash proceeds. The game is won on “grand slam home runs," not “singles."

SAFEs! They’re apparently everywhere. And it is easy to understand why this perception persists. Y Combinator, a leading incubator, invented the original (pre-money) SAFE (Simple Agreement for Future Equity) in 2013 to provide an easy, fast and cheap way to fund the dozens of startups comprising a Y/C batch. Their rationale was simple. Companies receiving small amounts of cash should not spend much of that on legal fees or waste time negotiating complex legal terms so early in a startup’s journey.

The ACA holds a simple belief: educated investors are more successful investors. A core pillar of ACA’s mission is to provide our members the tools and resources necessary to successfully navigate the ever-evolving investment space in 2023 and beyond. We are pleased to work with Linqto, one of ACA’s key partners, to provide you with educational resources through its Linqto Learn program at no charge.

Angel Capital Association (ACA) CEO Pat Gouhin and North Coast Ventures Founder and ACA member Clay Rankin were in Washington D.C. from March 27 to March 29, 2023. During that time, they met with relevant legislators and federal agencies to discuss ACA’s concerns regarding Qualified Small Business Stock (QSBS) regulations and the possibility of expanding the Accredited Investor (AI) definition.

Early-Stage investing is inherently cyclical, and for the first time in over a decade we are experiencing a downcycle. An important question leaps out: Is it better to invest more or less during a downcycle?

The Angel Capital Association, in concert with Jeffrey Lang of the Desert Angels and ACA’s proud partner Dealum, have come together to conduct an informative interview on one of 2023’s most important topics in the angel investment space: angel group collaboration.

The near-term crisis has largely been averted with the Federal Reserve, Treasury and FDIC regulators announcing that depositors regained access to 100% of their money starting Monday and that no losses will be borne by the taxpayer. The move should restore confidence and keep startups solvent and their employees employed, but there likely will be some longer-lasting psychological effects relating to capital risk that we should all be on the lookout for.

In the July 2022 edition of ACA Data Insights, the Queen City Angels (QCA) presented “What We Learned from Our Data," a comprehensive study using six years of data related to member engagement. QCA defined ‘’engagement” as a member's commitment to QCA's success and demonstrated by their intellectual contributions and participation in activities key to the organization’s mission. QCA members spent 6 months meeting with other investor groups (many ACA members) around the country doing a smart practices study of deal flow and due diligence processes which contributed to the writing of our Standards + Practices Guide.