Fascinating article in Wired about the resurgence of angel investing in the US, as well as a new software platform for angel investors that seems to be a category killer for now. Alok, would you know more about this?
Okay, so what? Well, the classic V.C.’s simply have too much money under management, and too expensive a talent pool, to waste time looking at investing anything less than $10 million in a project. Meantime, no entrepreneur wants to give up equity by taking in more money than he absolutely needs. So, when it only costs a few million to get a serious new company off the ground, how can the V.C.’s really play? They have to find places to make gigantic gambles, usually overpaying because the other big V.C.’s are also trying to invest in the few really big-dollar opportunities out there. It has become a system doomed to failure.
The flip side of the story is the rise of angel investor groups. These investment consortiums have always been ideally positioned to provide $500,000 to $5 million equity injections; but until recently, that wasn’t enough to get a serious effort off the ground. More fundamentally, however, they have historically not been terribly investor-friendly, largely because the individual members have other occupations.
The individual members didn’t work in the same place or even at the same times, so angels were terribly inefficient at evaluating transactions, sharing information, and negotiating and documenting deals.
Those days are over, thanks to software developed by David Rose, founder of the New York Angels (yes, I belong). Angelsoft is a wonderful collaboration platform that manages deal flow, helps match talent and expertise to projects, provides easy-to-use data rooms for potential investors, and generally drives the investment process. It combines project management and social networking in a way that, for the first time, makes the angel process efficient for both the company seeking capital and the potential investors.
The big news now is that, in a period of just a couple of years, over 400 angel groups around the globe have standardized on the platform. That means, of course, that they will also be able to share deals between themselves, vastly expanding the capital and expertise available for any given project.
including (among other things) India's first web site company (in 1995), and India's first startup to get silicon valley venture capital funding (in 1999). He has helped build Yahoo!'s first social media network (before facebook existed) and was recently helping Intel build new products for the Indian consumer. In addition, he set up and ran the startup accelerator at the VC fund, Axilor Ventures, and spends a lot of time helping startups of various kinds further refine their product and strategy.
He is also the force behind the well-known discussion group silklist, since 1997, which makes it one of the longer-lived email lists on the net. Discussions on silklist have ended up inspiring articles, books, Ph.D theses, and sociological studies. Recently, he helped found the 'unconference' styled event, The Goa Project, which aims to bring interesting people of all types together to learn and collaborate..
More info about Udhay on Linkedin.