Angel Insights Blog

By Maria Contreras-Sweet, SBA Administrator

What creates two out of three net new American jobs; produces close to half of our nation’s goods and services (nonfarm private GDP); and can be found, coast to coast, in every small town, big city and rural enclave?

The 28 million small businesses that propel our economy forward and define our national entrepreneurial spirit.

To be American is to have the freedom to innovate, take risks, create, transform and put in the hard work that has led to the successes – and failures – that define human progress. From May 1-6, the U.S. Small Business Administration (SBA) will recognize and honor the critical and  life altering contributions of America’s moms and pops, manufacturing enterprises, Main Street retailers and entrepreneurs during National Small Business Week.

While I was doing some research about some of our ACA Summit speakers, I found that several have penned some really interesting pieces.  Angels and entrepreneurs can learn a lot about investing trends and key trends and issues in early stage investing.  Here is an incomplete list of articles to check out:

By A.J. Watson of Fundify, LLC in Austin, TX.  This article originally appeared on Medium.com

Summary: The majority of angel investments are made by investors with no prior industry experience. This is a problem since one of the best indicators of investment success is the investor’s past experience. If you are an angel investor, you should seek to invest in industries where you have experience OR invest alongside investors with prior experience. I believe so strongly in this fact that I’m helping build Fundify.com, a community of industry experts, to help.

By: Christopher Mirabile, ACA Chair, Launchpad Venture Group, and co-founder of Seraf-investor.com

This post originally appeared on Seraf-investor.com

In the first article in this deal terms series, we observed that the concepts covered in a typical term sheet can be grouped into four main categories of investor concerns: Deal Economics; Investor Rights/Protection; Governance, Management & Control; and Exits/Liquidity. In the second article in this deal terms series we gave an overview and mapping of all of the key term sheet clauses used by investors to address the concerns in each category. In the third article we dug deeper into the provisions relating to Deal Economics, in the fourth Investor Rights/Protection, and in this article we are going to tackle the Governance, Management and Control category.

By: Marianne Hudson, ACA Executive Director

Are you an accredited angel investor?  We need ten minutes of your time to make a big difference for startup investing.  Please take this confidential survey to help us understand who angel investors are, how they became angels, and what factors influence their investing activity.

Today ACA and Wharton Entrepreneurship announced a partnership to complete the first-ever comprehensive demographic study of angel investors across the U.S.  We believe this study will help identify characteristics of angel investors that have never before been understood. It is critical for entrepreneurs, economic development entities, private market makers, regulators and legislators to understand who angel investors are, in order to drive effective policies to ensure a robust angel investing marketplace and for startups to better access equity capital.

By: Marianne Hudson, ACA Executive Director

The Angel Capital Association has appreciated the work of leading academics on assessing the impact of angel investors on promising entrepreneurs.  A recent blog by Laurent Blasie in the March Digest of the National Bureau of Economic Research does a particularly good job of summarizing the study:

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

Many angels, startups, VCs and the startup ecosystem have asked for more clarity about demo days for a couple years now.  These events seem to meet the definition of “general solicitation” and most investors don’t want to invest in companies that publicly advertise, but they have seen demo days as an important part of our world for decades.  The confusion may get clarity because of the work of a bi-partisan group of Members of Congress.

The Angel Capital Association supports HR 4498, the Helping Angels Lead Our Startups Act (HALOS Act) and want to thank Reps. Chabot, Sinema, Hurt and Takai for introducing this bi-partisan bill last week.  We believe the HALOS Act helps more job-creating startup companies raise the funding they need because it removes a barrier to funding.  There has already been discussed in a hearing of the House Financial Services and could be on a positive track.  A similar bill is also in the Senate, with bi-partisan sponsors as well.)

By: William Carleton, Counselor @ Law, and volunteer chair of ACA Public Policy Advisory Council

Yes, there's Title III under the JOBS Act, promising equity crowdfunding (think Kickstarter or IndieGoGo, just not restricted to awards or products, but instead offering ownership in the company); yes, there's Reg A+, also bequeathed by the JOBS Act; and there are a plethora, now, of state crowdfunding laws that lower the bar to who may invest in private companies.

By: Marianne Hudson, ACA Executive Director

Know someone who would add great value to ACA leadership?  Could be you, could be someone else!  Each year ACA looks to add talent to its Board of Directors to keep the organization strong, growing, and evolving.  The board is now seeking nominations from the ACA membership at large of people whom you believe have great value to add to the ACA’s mission.  We seek members of the angel investor community who have demonstrated unusual ability to organize and lead others in angel investing activities.  We particularly seek nominations of people with experience in marketing, deal collaboration and syndication, building membership in angel groups, and in wielding political influence in high places.  We seek persons of high activity level, energy, and willingness to serve in order to advance the ACA’s mission.  Email your nominations to Dick Reeves, Chairman of the ACA Governance Committee, by February 22, and include your own comments about your nominee, along with the names and contact info of two others who know the person well and can attest to their value. You may nominate yourself, but please adhere to the two-person recommender formula if you do.