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Investors attend Invest Southwest Capital Conference 2010

  
  
  
  
  
  
  

investor conference
Invest Southwest Capital Conference December 8-10, 2010

CONNECTING INVESTORS TO THE REGION’S MOST PROMISING VENTURES

Invest Southwest is the premier capital conference in Arizona and the Southwest. Since 1992, this event has connected the region’s most promising ventures with knowledgeable investors. On December 8–10, 2010, investors and venture capitalists from across the country will gather at the Four Seasons Resort Scottsdale at Troon North in Scottsdale to see the “Best of the Southwest” present their business plans and investment opportunities. These companies are ready for investment, and have participated in a competitive application process and an extensive mentoring period in anticipation of their conference presentation.

The event also includes an investor seminar, an internationally known keynote speaker, and presenting company exhibits and interactive sessions. For accredited investors only.

Here are some videos of conference sponsors and participants talking about why Invest Southwest is important for Arizona venture capital and entrepreneurship.


To register for the conference (accredited investors only) go to http://www.investsouthwest.org/register.html

The Angel Investor Market Q1/Q2 2010

  
  
  
  
  
  
  
angel investorFrom the Center for VentureResearch at the University of New Hampshire:

Market Size

The angel investor market in Q1,2 2010 showed signs of stabilization since the 30% market  correction in the second half of 2008 and the first half of 2009. Total investments in Q1,2 2010 were $8.5 billion, a decrease of 6.5% over Q1,2 2009. However, a total of 25,200 entrepreneurial ventures received angel funding in Q1,2 2010, a 3% increase from Q1,2 2009, and the number of active investors in Q1,2 2010 was 125,100 individuals, a drop of 11% from Q1,2 2009. The decline in total dollars, coupled with the small increase in investments resulted in a smaller deal size for Q1,2 2010 (a decline in deal size of 9% from Q1,2 2009). These data indicate that while angels remain committed to this investment class they do so with a cautious approach to investing. Angels are committing fewer dollars in more deals, a result of the lower valuations. While the market exhibited a stabilization from Q1,2 2009, when compared to the market correction that occurred in 2008, these data indicate that the angel market appears to have reached its nadir in 2009.

Stage

Angels have decreased their appetite for seed and start-up stage investing, with 26% of Q1,2 2010 angel investments in the seed and start-up stage, marking a steady decrease in the seed and start-up stage that began in 2008 (45%) and 2009 (35%), and it is the smallest percentage in seed and start-up investing for several years. This decline was reflected in an increase in postseed/start-up investing with 56% of investments in this stage.

Historically angels have been the major source of seed and start-up capital for entrepreneurs and this declining interest in seed and start-up capital represents a significant change in the angel market. Without a reversal of this trend in the near future, the dearth of seed and start-up capital may approach a critical stage, deepening the capital gap and impeding both new venture formation and job creation. This change in investment behavior is likely an indication of both a need to increase investments in existing portfolio companies in order for these portfolio companies to survive the recession and an extended exit horizon. Expansion stage investing (14%) remained unchanged. New, first sequence, investments represent 46% of Q1,2 2010 angel activity, a decline of 12% in the last year.

Sector Analysis

Healthcare Services/Medical Devices and Equipment accounted for the largest share of investments, with 24% of total angel investments in Q1,2 2010, followed by Biotech (20%), Software (12%), Industrial/Energy (11%), which reflects a continued appetite for green technologies, Retail (9%) and Media (5%). Retail and Media have solidified their presence in the top six sectors, mainly due to a continued interest in social networking ventures.

Deals by Sector: Healthcare (24%), Biotech (20%), Software (12%), Industrial/Energy(11%), Retail (9%), Media (5%)

Latent Angels

If the angel market is to achieve sustainable growth there needs to be a reasonable augmentation in active investors, and thus, level of participation is an important consideration. While the number of angel organizations, and individuals that are members of organized angel groups, is increasing, there is a significant percentage of latent angels (individuals who have the necessary net worth, but have not made an investment). In Q1,2 2010, 65% of the membership in angel groups was latent angels, which is an increase from 2009 (54%) and 2008 (36%). This significant percentage of latent investors indicates that while many high net worth individuals may be attracted to angel groups, they have not converted this interest into direct participation. This increase in latent angels may be the result of the longer exit horizon and in general be indicative of the lack of seed capital and the need for research to move the latent angel to the active investor.

Yield Rates

The yield (acceptance) rate is defined as the percentage of investment opportunities that are brought to the attention of investors that result in an investment. In Q1,2 2010 the yield rate was 12%, continuing a stabilization in yield rates that began in 2008 (10%) and continued in 2009 (14.5%). This yield rate indicates a cautious approach to investing, reduces the concern of an unsustainable investment rate, but also reflects an increased difficulty for entrepreneurs to secure angel funding.

Women and Minority Entrepreneurs and Investors

In Q1,2 2010 women angels represented 18% of the angel market. Women-owned ventures accounted for 11% of the entrepreneurs that are seeking angel capital and 14% of these women entrepreneurs received angel investment in Q1,2 2010. Thus, while the number of women seeking angel capital is low, the percentage that receives angel investments is in line with the overall market yield rate. Minority angels accounted for 4% of the angel population and minority-owned firms represented 6% of the entrepreneurs that presented their business concept to angels. The yield rate for these minority-owned firms was 23%, which for the third straight year is in line with, or higher than, market yield rates. However, the small percentage of minority-owned firms seeking angel capital is of concern.

The Center for Venture Research (CVR) has been conducting research on the angel market since 1980. The CVR’s mission is to provide an understanding of the angel market through quality research. The CVR is dedicated to providing reliable and timely information on the angel market to entrepreneurs, private investors and public policymakers.

The response rate for this survey was 37%. 

Entrepreneurs Unite during Global Entrepreneurship Week!

  
  
  
  
  
  
  

EntrepreneurGlobal Entrepreneurship Week: November 15th-21st

This week is Global Entrepreneurship Week. Nearly 100 countries participate in GEW every November, and each year there are more than 40,000 events that occur around the world with over 10 million participants. 

The United States is second (UK is first) on the list of countries participating with 414 scheduled events and 37,665 people participating.  

What featured events are happening during the Week?

There are a number of featured events that demonstrate the global scope and scale of the initiative. Some of these featured events include:

  • Global Cleantech Open Ideas Competition 22 countries

  • Speednetwork the Globe 50 countries

  • Startup Weekend 15 cities around the world

  • Global Student Entrepreneur Awards 8 countries

  • Creativity World Forum 12 Districts of Creativity 12 countries

  • EO 24 38 countries

  • Your Big Year England

  • La Fête de l’Entrepreneur France

  • YBI Global Forum Mexico

  • The Hunger Project Sweden

Global Entrepreneurship Week has several great sponsors:

Source: http://www.unleashingideas.org/

Check out the list of ASU's Global Entrepreneurship Week events (some are open to the public)

ASU GEW events

CANCELED: Thunderbird Angel Network Dinner November 17th

  
  
  
  
  
  
  

angel investorThe Thunderbird Angel Network dinner scheduled for November 17th has been canceled due to unforeseen circumstances.  

The TAN dinner meetings will resume on the next scheduled TAN dinner date, January 20th, 2011 on the Thunderbird campus.  The evening will begin with a networking reception at 5:30pm, dinner will begin at 6:00pm, followed by due diligence reports and company presentations. The registration fee for the dinner meeting is $40.00.

Thunderbird Angel Network dinners are open to accredited investors only- please refer to our Investor Fact Sheet to learn more about being an accredited investor.  You can download the Investor Fact Sheet from under the Investor tab on our website.

Since the Thunderbird Angel Network was recently launched in October, the member dinners are currently open to non-members. We believe that investors interested in becoming members of the TAN may attend one meeting as a non-member before joining. 

New companies seeking investment will present at the January 20th dinner:

  • Companies to be announced by January 9th

To reserve your place and make your payment for this dinner, click here to register and you will be redirected to a secure payment link.

The next four dinner meetings scheduled for the Thunderbird Angel Network:

January 20, 2011                                 March 24, 2011

May 19, 2011                                      September 22, 2011

Upcoming Thunderbird Angel Dinner November 17th

  
  
  
  
  
  
  

angel investor
Register today for the next Thunderbird Angel Network Dinner on Wednesday, November 17th!

Since the Thunderbird Angel Network was recently launched in October, the member dinners are currently open to non-members.  We believe that investors interested in becoming members of the TAN may attend one meeting as a non-member before joining. Only accredited investors may attend the TAN meetings. For information on the definition of an accredited investor, please see the Investor Fact Sheet located on the Investor section of our website.

The next TAN dinner meeting will be held Wednesday, November 17th at the Thunderbird School of Global Management campus. The networking reception will begin at 5:30 p.m. and dinner will begin at 6:00 p.m. Following dinner, the due diligence team will present and then the new companies will present.  The registration fee for the dinner meeting is $40.00.

New companies seeking investment will present at the November 17th dinner:

  • Companies to be announced by November 14th

To reserve your place and make your payment for this dinner, click here and you will be redirected to a secure payment link.

The next scheduled dinner meeting for the Thunderbird Angel Network is January 20, 2011.

Difference Between Venture Capitalists and Angel Investors

  
  
  
  
  
  
  

venture capital
When an entrepreneur is ready with a business plan that he or she has researched, prepared, and is confident will be successful, the next step is to find funding.  The funding should start with the entrepreneur.  If you are not willing to put your own money and risk into your business, then why should anybody else?  Next, the funding should come from sources like family and friends (also known as FFF: family, friends and fools).  If your own family and friends aren't willing to invest in you, why should complete strangers? Finally, the next step is to find external funding from a bank, venture capitalists, or angel investors. Usually banks are unwilling to fund startup ventures that don't have 2-3 years of financial statements due to the high level of risk, and banks are especially risk adverse and not open to investing in small business during a recession. That leaves two 2nd round funding choices for entrepreneurs: venture capitalists and angel investors.  So, what's the difference?

Angel investors are wealthy individuals who help entrepreneurs during the startup phase by providing seed capital, which is the capital that is required and utilized in starting and growing a business. An angel investor is more like your friends, family or fools than a bank or venture capitalist because an angel investor is more likely to give importance to the entrepreneur than the business model. Angel investors are usually entrepreneurs themselves and they like to help upcoming entrepreneurs, not only by providing the capital but also by mentoring. 

A venture capital fund also invests in companies in the startup phase of the business, but can be defined as a pooled investment that uses the money from third-party investors, such as investment banks or wealthy individuals, to invest in business projects.  A venture capital firm is an investment company that invests its shareholders' money in startups and other risky but potentially very profitable ventures.

Difference Between Venture Capitalists & Angel Investors:
seed capital

  • In a startup business the angel investor comes into the picture earlier than the venture capitalist. Angel investors are usually the 1st or 2nd round of funding (seed or concept stage), while venture capitalists are usually the 3rd or 4th round of funding (growth stage).
  • Angel investors are individually wealthy whereas venture capital is usually pooled funds or an investment firm.  Angel investors privately invest their own funds, while venture capital is usually a professionally-managed fund.
  • The amount of capital provided varies. Angel investors provide capital starting from $25,000 to $1M (approximate amounts depending on the deal). Venture capitalists generally do not consider deals less than $1-2M. 
  • The process of obtaining funds is less rigorous in the case of angel investors, and very rigorous in the case of venture capitalists.
  • The terms and conditions put forth by venture capitalists are generally more stringent than angel investors.
  • Angel investors are sometimes said to invest "emotional money," while venture capitalists are said to invest "logical money". 
  • Angel-funded startup companies are less likely to fail than companies that rely on other forms of initial financing.

Despite their differences, many angel investors work with venture capitalists to find the best investors for great startup companies. Check out the directory on our website for links to other angel investing groups and venture capital firms.

Are Angel Investors Angels or Demons?

  
  
  
  
  
  
  

angel investorAccording to the following article from the Economist, there have been allegations that "super angels" have been banding together to keep venture capital firms out of the startup business and to lower startup valuations.  This conspiracy theory in the startup industry has recently caused apprehension in investors and entrepreneurs.  

Read the full article from the Economist below:

"I WAS at Bin 38 and all I got was this lousy valuation", read the message on Dave McClure's T-shirt at a conference in San Francisco this week. The boss of 500 Start-ups, a fund that provides seed capital to entrepreneurs, Mr McClure had the shirt designed to ridicule an accusation that he and several other financiers have been colluding.demon investor

The charge was made by Michael Arrington, the founder of a blog called TechCrunch (which was sold to AOL this week). His claim has turned a spotlight onto "super angels", who run funds that invest in deals considered too small to be of interest to traditional venture-capital firms. In a blog post Mr Arrington said he recently gatecrashed a meeting at Bin 38, a San Francisco wine bar, at which he claimed a bunch of super angels were gathered "Godfather-style" to discuss things like how to counteract rising valuations of young firms and how to keep big venture funds out of deals.

"Angelgate", as it has been dubbed, sparked a furore in the start-up world. In an expletive-laden response on his own blog, Mr McClure called Mr Arrington's claim of conspiracy "bullshit" and said the angels' meeting focused on issues like how to boost access to start-up capital and how to get non-tech firms more interested in buying tech businesses.

It is hardly unusual for investors in Silicon Valley to compare notes. And Mr Arrington has yet to provide hard evidence of collusive behaviour. But the episode has exposed divisions in angels' ranks. Ron Conway, a well-known investor in tiny firms, has privately castigated some of his fellow super angels for having overinflated egos and for appearing too keen to make a fast buck.

All this matters because their clout has been growing. "Angelgate is a bit of a validation of super angels' influence," says David Hsuof the Wharton School. And competition is certainly getting stiffer. Established firms have rediscovered their appetite for seed funding: Greylock Partners, a well-known venture firm, this week said it had launched a $20m seed fund. That will make heavenly returns even harder to come by.

Source:  Economist; 10/2/2010, Vol. 397 Issue 8702, p82-82, 1/2p

 


Angel Investors Investing Less?

  
  
  
  
  
  
  


investing lessUNH Center For Venture Research: Angel Investors Flee Seed and Start-Up Stage in First Half of 2010

October 26, 2010

According to the Angel Market Analysis done by University of New Hampshire's Center for Venture Research, angel investors committed fewer dollars in more deals in the first half of 2010, the lowest level in several years.  This trend could soon impact new ventures and job creation.

Total investments in the first half of 2010 were $8.5 billion, a decrease of 6.5 percent over the first half of 2009.

A total of 25,200 entrepreneurial ventures received angel funding in the first half of 2010, a 3 percent increase from the same period in 2009, and the number of active investors in the period was 125,100 individuals, a drop of 11 percent from the same period in 2009. The decline in total dollars, coupled with the small increase in investments, resulted in a 9 percent decline in deal size for the first and second quarters of 2010 compared with 2009. 

“These data indicate that while angels remain committed to this investment class they do so with a cautious approach to investing. Angels are committing fewer dollars in more deals, a result of the lower valuations,” said Jeffrey Sohl, director of the UNH Center for Venture Research at the Whittemore School of Business and Economics.

“Historically angels have been the major source of seed and start-up capital for entrepreneurs, and this declining interest in seed and start-up capital represent a significant change in the angel market. Without a reversal of this trend in the near future, the dearth of seed and start-up capital may approach a critical stage, deepening the capital gap and impeding both new venture formation and job creation. This change in investment behavior is likely an indication of both a need to increase investments in existing portfolio companies in order for these portfolio companies to survive the recession and an extended exit horizon,” Sohl said.

Healthcare services/medical devices and equipment accounted for the largest share of investments, with 24 percent of total angel investments in Q1 and Q2 2010, followed by biotech (20 percent), software (12 percent), industrial/energy (11 percent), which reflects a continued appetite for green technologies, retail (9 percent) and media (5 percent).  Retail and media have solidified their presence in the top six sectors, mainly due to a continued interest in social networking ventures.

The Center for Venture Research has been conducting research on the angel market since 1980. The center’s mission is to provide an understanding of the angel market and the critical role of angels in the early stage equity financing of high growth entrepreneurial ventures. Through the tenet of academic research in an applied area of study, the center is dedicated to providing reliable and timely information on the angel market to entrepreneurs, private investors and public policymakers. For more information visit http://wsbe.unh.edu/cvr or contact the center at 603-862-3341.

Source:http://www.unh.edu/news/cj_nr/2010/oct/lw26market.cfm

The Arizona Republic: Network Matches Investors and Startups

  
  
  
  
  
  
  

Arizona Republic

THUNDERBIRD ANGELS MEET ENTREPRENEURS

by Lesley Wright - Oct. 25, 2010 
The Arizona Republic

Thunderbird School of Global Management is holding its inaugural dinner meeting for the Thunderbird Angel Network at 5 p.m. on Thursday.

The network seeks to introduce qualified investors to entrepreneurial companies that are in the early stages of business.

Featured enterprises include a technology company with a touch-pad for industrial systems, an educational video-game developer, the maker of a device that protects children online, and the developer of technological feet prostheses.

To reserve a seat, go to thunderbirdangelnetwork.org, e-mail thunderbirdangelnetwork@gmail.com or call Dee Harris at 602-840-4078.

The registration fee is $40.


Read more: http://www.azcentral.com/community/surprise/articles/2010/10/25/20101025glendale-network-matches-investors-startups.html#ixzz13U8MFmte


More About Angel Investor Forums

  
  
  
  
  
  
  

angel investor forumAn Angel Investor Forum, such as the Thundberbird Angel Network, is usually a member of the Angel Capital Association.

The Angel Capital Association is North America's professional alliance of angel groups. The association brings together many of the angel organizations in the United States and Canada to share best practices and collaboration opportunities. ACA provides excellent professional development and discounts on important services for angel investors who belong to member groups, and also serves as the public policy voice of the American angel community. A directory of other ACA member angel investor forum groups is available on this site.

Angel Capital Association

 

 

 

The Angel Capital Association is an organization sponsored by the Kauffman Foundation, that is focused on developing best practices for the operation of angel organizations across North America.

kauffman foundation

 

The Ewing Marion Kauffman Foundation was established in the mid-1960s by the late entrepreneur and philanthropist Ewing Marion Kauffman. Based in Kansas City, Missouri, the Kauffman Foundation is among the thirty largest foundations in the United States with an asset base of approximately $2 billion.

Its vision is to foster “a society of economically independent individuals who are engaged citizens, contributing to the improvement of their communities.” In service of this vision, and in keeping with the founder’s wishes, they focus grant making and operations on two areas: advancing entrepreneurship and improving the education of children and youth. 

Today, the Kauffman Foundation is the largest American foundation to focus on entrepreneurship and has more than fifteen years of in-depth experience in the field. Leaders from around the world look to them for entrepreneurship expertise and guidance to help grow their economies and expand human welfare. Their Entrepreneurship team works to catalyze an entrepreneurial society in which job creation, innovation, and the economy flourish. They work with leading educators, researchers, and other partners to further understanding of the powerful economic impact of entrepreneurship, to train the nation’s next generation of entrepreneurial leaders, to develop and disseminate proven programs that enhance entrepreneurial skills and abilities, and to improve the environment in which entrepreneurs start and grow businesses.

In late 2008, the Foundation embarked on a long-term, multimillion-dollar initiative known as Kauffman Laboratories for Enterprise Creation, which, through a set of innovative programs, is seeking to accelerate the number and success of high-growth, scale firms.

Global Entrepreneurship is one of the 3 pillars of the unique Thunderbird curriculum and approach to global management education.  Our entrepreneurship center of excellence, The Walker Center for Global Entrepreneurship, is the vehicle through which we support entrepreneurship and entrepreneurs in a variety of ways.

The Thunderbird Angel Network, as an angel investor forum and future applicant of the Angel Capital Association, as well as its members and extended community, are fortunate indeed to have access to the many resources and leadership that both the ACA and the Kauffman Foundation make available to those who believe in the essential role and value of entrepreneurship in economy and society.

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