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Seed Capital From Angel Investors: Alan Rossiter, Vice Chairman, Springboard Capital (Part 4)

Posted on Friday, Jul 23rd 2010

By guest authors Irina Patterson and Candice Arnold

Irina: You mentioned AngelSoft. How do you use AngelSoft?

Alan: Very sparingly. We’ll probably cease using it at the end of this year. We’re not particularly fans of proprietary software. We deal with a tremendous amount of confidential information. We use it because a lot of the other angel groups tend to use AngelSoft. We don’t use it to manage our deal flow.

We use AngelSoft for input and deal flow. They have a very nice software that makes it quite easy for entrepreneurs to provide a standardized set of information. It’s actually quite good. We use that, like most other angel groups, for input but then we take it offline immediately and manage it on our own servers. It’s pretty sensitive information for companies.

Irina: How entrepreneurs who seek funding can reach you?

Alan: We’re like any other venture capitalists that I know. We’ll take information a lot of different ways, we’ll do it by e-mail, by phone call. . . . We advertise on our website, and what we advertise when we talk to people is that if you send us any information, we’ll consider it. If you send it in through AngelSoft, we will consider it within seven days. That’s simply because the formatting of what they call the application that in AngelSoft forces the entrepreneur to highlight critical information that we look for. If you get it in a business plan that somebody sent you or something like that, it may take an hour or two to drag out of that the same information you want. It’s a clerical issue.

Irina: Have you thought about what would make your life easier?

Alan: Believe it or not, I do believe that some sort of standardized application like an AngelSoft is a tremendous help. That, of course, greatly lessens the amount of time I have to spend looking at deals when we first get them. Now there is a very significant caveat after that. Most of the very promising deals that we see never come through AngelSoft because they are hot hand-off referrals from a venture firm or something like that.

In some cases, we’ve invested in companies where the companies had absolutely no interest in going in and filling out some sort of application. And they were strong enough deals where they really don’t need to. Springboard’s position is we don’t ever want to force anybody through a specific channel.

That is a very popular technique among angel organizations. I understand it and respect their opinions, but for Springboard it’s just not our feeling that that’s something we want to do. We want to make sure that door is wide open.

Similarly, I don’t know how much of this there is still going on, but there have been angel organizations that have actually charged companies a fee. Again, that just doesn’t fit for us; we just don’t think that’s appropriate.

Irina: What are your biggest daily challenges?

Alan: One of the things that’s always a challenge – it’s a challenge for us and it’s a challenge for venture firms – because of the volume of deal flow, which is huge, managing the deal flow, the flow process of where is this company, what actually needs to be taken with respect to this company, who needs to call who, what information do we need, when did we get it?

Managing all of that data flowing through the organization is quite a challenge and, again, in venture firms everywhere, it is a major activity and time-consumer. We use our own spreadsheets and databases and so forth to manage that.

This segment is part 4 in the series : Seed Capital From Angel Investors: Alan Rossiter, Vice Chairman, Springboard Capital
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