Angel. Photo:Baldur McAqueen

Over the past three days, GeekWire Chief Business Officer Rebecca Lovell and I both have moderated panels about the state of angel financing in Seattle. The discussions have been lively, and fun. [PreviouslyAngel mind meld: What early-stage investors really want]

But, at the end of the day, what entrepreneurs really want to know is where to go to raise cash.

Well, look no further. In advance of the MIT Venture Lab’s annual “Meet the Angels” panel, Rebecca (GeekWire’s very own data hound and “mathlete”) compiled this super handy table showing details of the seven major angel groups in Seattle.

Each has their own style and charter, so we hope this will serve as useful guide for those entrepreneurs thinking about hitting the angel financing trail.2010-2011 Angel Group Stats

Comments

  • guest

    Charging obscene amount of money, yes, Keiretsu and Zino, on startups desperate for cash in this day and age is just BS. Let’s not beat around the bush and call out these two for they really are, blood suckers praying on vulnerable startups. 

    For that matter, startups stupid enough to pay that kind of fee deserve to not get funded. 

    There are plenty of other resources beyond local angels, check out Angelist.

  • Thomas R.

    Any hidden meaning with the picture? That angel statue overlooking a grave in a cemetery sure is foreboding…

    • Joe the coder

      Funny, first thing I thought about before I’d read a word of the article was “who died?”  

      • johnhcook

        I was wondering if anyone would pick up on that. :)

  • Dave

    Are you putting in fees for companies to apply? Because AoA’s membership fees for investors were $1,750 per individual first year, $1,250 each year after to renew.

    I think it would be useful for you to compile the investor fees as well since one barrier to people doing angel investing is a lack of knowledge about how to go about it and what it costs, as well as time to go dig up the information. Maybe a post for another day or a guest post from AoA, Founder’s Co-Op or one of those groups.

    • Anonymous

      Thanks, Dave. The stats I requested from the heads of the angel groups in this overview were for compiled for the entrepreneur audience at the @mitef:twitter annual “Meet the Angels” event. You’re right that the investment stats of these angel groups is the tip of the iceberg when it comes to the overall health of the entrepreneurial ecosystem.

      In our panel discussion, we touched on the challenge of getting more accredited investors into the angel game, and cultivating more deal leads.  As Yi-Jian Ngo of the Alliance of Angels pointed out, 99% of angel investing in this country happens *outside* the activity of membership Angel groups like the 7 profiled here.  

      It’s important to consider funds like Founder’s Co-Op (just raised $8M after their 2008 $2.5M fund), incubators (such as Tech Stars and Founder Institute), not to mention newly-minted angel investors who put fuel back in the tank after their own positive liquidity events. 

  • Ray Burt

    Curiously missing is the return on the investments …

    • Joe the coder

      Agreed but it’s probably a low ROI effort for a journalist – that is a bunch of work to pull together the results for each investment.  It would be nice for potential investors if the clubs/groups cited their track record.  Then at least a diligent journalist could verify or refute.

      • johnhcook

        It is not that it is a lot of work, it is that the data is not available for public consumption. I’ve been covering the startup beat for nearly 15 years, and the various angels, entrepreneurs and VCs will rarely (I won’t say never, but close) tell you valuation. If you have a pipeline into that information, let me know as I’d love to see it. The only thing close (and just for VC investments) is when firms disclose IRR for full funds via state pension boards. I do look into that info from time to time, but it even doesn’t break down investments on a per deal basis.
        John Cook
        Co-founder, GeekWire
        206-913-7926
        John@GeekWire.com

        • Anonymous

          When I was Program Director at the Alliance of Angels, Rob Wiltbank put together an incredibly painstaking study on angel returns, through interviewing individual angels across 539 groups and 1,130 exits. These calculations take into account both the valuations, terms, investment amounts, and participation in follow-on rounds, which varies by individual (it’s not a yay or nay decision as in VC funds, who do report such IRR information to their LP’s).

          Here’s a link to Rob’s study, as well as some work done on the topic by the Kauffman Foundation on this complex but fascinating topic: http://www.angelblog.net/Angel_Returns.html

      • johnhcook

        It is not that it is a lot of work, it is that the data is not available for public consumption. I’ve been covering the startup beat for nearly 15 years, and the various angels, entrepreneurs and VCs will rarely (I won’t say never, but close) tell you valuation. If you have a pipeline into that information, let me know as I’d love to see it. The only thing close (and just for VC investments) is when firms disclose IRR for full funds via state pension boards. I do look into that info from time to time, but it even doesn’t break down investments on a per deal basis.
        John Cook
        Co-founder, GeekWire
        206-913-7926
        John@GeekWire.com

  • http://twitter.com/DaveParkerSEA Dave Parker

    Great post and resource. It’s good to have these listed in one place.

    For the (first time) entrepreneur, it’s important to understand your investor profile – who invests in your type of deal.
    You also need to remember that just because you need cash doesn’t mean that your a good investment.

    Each of these groups have (different) business models that that Angels support via membership and activities to invest in local companies that present in the respective forums – read as: they have the money to invest and they are easy to find in this forum.

    The group provides them with deal flow, resources to review deals and group due diligence and most importantly follow on capital. So that there investment in your startup isn’t the first and last investment in the deal. It also gives them the training to know how to do due diligence.

    In most cases the Angels pay to be part of the group and the groups have connect for social and other events as well as just funding a startup. So membership to Zino for the year is a good place to hang out if your looking for that investor profile.

    Is this a defense of charging entrepreneurs for pitching? No, you should go pitch every angel you can (when your ready). This is just an alternative for pitching at Starbucks and instead pitching as a group.

    One thing is for sure, you should use all of the coaching resources you can – so apply and go through the K4 process for free. If you decide you want to pitch to the group, then pay… I’m also excited about how Crowdfunding could change the huge gap in Seed Funding.

  • http://eyejot.com/users/davidg davidgeller

    Entrepreneurs should take a careful view of people willing to lend them money with little or no domain expertise in their business or idea. Angel investment groups in Seattle (and probably in most places) are semi-social entities where moderately (but rarely excessively) wealthy people come together to pool their money for what can only be described, in most cases, as gambling.

    My somewhat limited experience suggests that rarely do these groups dive deeply into the companies they’re considering investing in. They can’t because they’re typically not full-time investors and, more importantly, rarely posses the skills necessary to adequately judge whether one business will be successful while another fails. So, they often can’t provide the entrepreneur with anything other than money. While that may seem fine, it might not be and the relationship could carry with it terms that are onerous and diminish future success for the entrepreneur.Rather than see a chart of how much money has been invested (or lost), I’d really like to see which of the companies they’ve invested in have become successful by growth or acquisition. That might prove to be a better barometer of success than how much money they’ve raised and distributed – or their size of their organization (or drinking club).

    My perspective is centered entirely around technology (mostly web/Internet) startups and I always found it odd that dentists, successful real estate people, attorneys, senior managers and dot com millionaires would prove to be successful investors and/or startup advisors. Many of the people I encountered in some of the angel groups described by this post were neither strong technologist nor possessed the financial skills typically found with traditional VC organizations or super Angels.

  • Jordan

    Entrepreneurs, be very careful in interpreting the chart. Zino’s claim, for example, to have “facilitated” $20M in funding since 2005 is difficult to parse. 

    There’s a big difference between “someone who happens to be a member of Zino makes an investment somewhere” and “a Zino member makes an investment in a company that paid to be a part of their pitch events as a result of the pitch event”. If you are calculating the odds of being in the latter bucket, it’s misleading to take into account the numbers coming out of former bucket. 

    Angel groups should be earning their money from the quality of their investments. Earning money by charging entrepreneurs more than “cost covering” fees creates a conflict of interest. It incents the angel group to encourage entrepreneurs to pitch who they may know have a low probability of being funded.

  • Jack

    How about an entrepreneur group who’s only revenue model is from charging investors to get a shot at investing in the member companies? There could be an internal review committee that puts the best start-ups out front for the investors, and aligns the ones who aren’t ready, with consultants to help them get there. 

  • Jack

    How about an entrepreneur group who’s only revenue model is from charging investors to get a shot at investing in the member companies? There could be an internal review committee that puts the best start-ups out front for the investors, and aligns the ones who aren’t ready, with consultants to help them get there. 

  • http://www.birthdayslam.com Jeff Robinson

    How about a follow up article on ” Angel Groups – The Investors and the Returns – Expected vs Real ” 
    No doubt – It is not pretty. 

  • http://www.facebook.com/aaron.a.bird Aaron Bird

    Great article.  This is a good resource for Seattle entrepenuers looking to take the Angel route.

  • Tigerprawn32

    Be very careful about pitching to these guys. They can be an enormous time sink with lots of attitude and no advice. There are great angels in Seattle, but going to these groups isn’t a great way to reach them. 

  • http://www.startupnextdoor.com/ John Washam

    This comment is late to the game. When this article was published, I was on a pre-launch coding rampage, so was too busy to ready blogs.
    When I finally launched and was looking at the Seattle startup/angel landscape, I was quite disappointed. Every group (entrepreneur orgs and angel groups) looks like a scam. I’ve disliked the idea of pay-to-pitch since I first heard about it 2 years ago.  If you are using the $ amount to filter out bad ideas or entrepreneurs that “aren’t ready”, I’m sure there are a number of intern associates that would help/volunteer. Yes, there are a lot of startups and deal volume you have to look at and review, but $ is not an effective filter. You’ll just get more bad ideas and inexperienced entrepreneurs with good savings accounts. 
    I can definitely afford to pay, but I won’t. And I think my startup is a winner. It’s already launched and getting traction. But I’m not going to pitch you. I’d rather commute to Silicon Valley and pitch there. It would even be cheaper in some cases.
    If anyone knows of worthwhile groups that really are looking to help entrepreneurs and get deals, and not just fund steak dinners for themselves, send a reply.

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