By guest authors Irina Patterson and Candice Arnold
Irina: What is your source of deal flow?
Brian: A good portion of the deals come from the angels themselves because of their contacts. We are on the Angelsoft platform, so there is an enormous amount of deal flow that comes through them as well.
New York City is a cauldron that’s just bubbling over like I’ve never seen before. Entrepreneurs, startups, whatever you want to call them, kids are coming here in droves from Silicon Valley and all over the world. There’s no lack of deal flow from either the investing angels or just from the generic platform, from Angelsoft.
Irina: Angelsoft was created by David Rose [chairman of the New York Angels, the founder and CEO of Angelsoft], right?
Brian: Absolutely, yes. It’s now the de facto platform around the world for angel groups.
Irina: Let’s talk a little bit about Angelsoft. What do you like about it?
Brian: I think the thing that makes Angelsoft a worthwhile tool is the fact that it professionalizes the process from what was a Wild West, on a variety of levels of information management, documents, on e-mail management, control and communications.
It’s a qualitative platform where information, in a structured manner, is disseminated, distributed, and collaborated on in an effective way.
So, an angel group hears a presentation; they all get on Angelsoft; they say, “Here’s my interest. Let’s talk about it.” Information following the interest through due diligence gets shared. The secure nature of that is excellent. It works in a very nice way.
Angelsoft is a platform designed primarily for the angel group’s administrator, who administrates the facilitation of the tool so that both the information that’s provided by the entrepreneur and the information that’s disseminated through deals’ actual completion are organized by the administrator.
Individual angels use it to source a deal, to look at and discuss documents associated with the deal, to determine where they stand relative to the funding in terms of its commitment. It’s a balance between the use of the administrator managing the deal and the angels going on Angelsoft to facilitate their discussions to determine if the deal is the right deal and the due diligence that leads to a final investment.
Irina: What do you do personally from day to day as an angel and vice-chairman?
Brian: As an angel, I’ve got an eight-part program to continue to get the best deals, which is my responsibility, and to teach angels and entrepreneurs how to best work together. Those are my two responsibilities.
If I do those well, it will create more angels as part of the angel group and will facilitate a quality relationship in the school environment, for mentorship needs, and so on.
The third thing I do is more related to the environment. I’m lobbying in New York State to get better tax support for angels. I meet with venture capital firms and other angel groups around the country and around the world to talk about opportunities to collaborate on deals, and to provide workshops for people like Bill Payne [angel investor and educator].
From an educational standpoint, teaching both angels and entrepreneurs how to manage their exits, how to manage qualitative legal issues, board issues, and so on. It’s a variety of eight things that I do, but I do focus on the first two.
Irina: You said you had a program for entrepreneurs. How does that work?
Brian: It’s a lot of outreach. I spend a lot of time at major universities, lecturing to the students so that up close and personal, I’m there for them.
They e-mail me constantly, so we gain a level of trust with entrepreneur community. They feel as though they get it at some point. Frankly, a lot of where the nuances are of quality angel investing is missed. If a young startup entrepreneur doesn’t start understanding from the beginning a good, quality early stage investment, it could really hurt him going forward. That’s number one. I’m out there a lot.
Number two is the ongoing development of workshops. But workshops, not just a talking head . . . workbooks, getting people to really get it, to understand funding a company and the processes that are changing, by the way, dramatically, in the startup entrepreneur, angel investment space.