Seed Capital From Angel Investors: Brian Garrett, Co-Founder And Managing Director, Crosscut Ventures (Part 9)

By guest authors Irina Patterson and Candice Arnold

Brian: I already mentioned how inundated we are just trying to keep up with the deals we have coming to us. I would never sleep if then tried to turn around on every deal that we pass on and try to make other introductions on their behalf. I can more possibly – and it’s usually more on the partnership side of things than it is on the “here are additional funding sources you should approach side” – unless I happen to know someone for whom I think the story would resonate particularly well with her particular background. >>>

Seed Capital From Angel Investors: Kiki Tidwell, Board Member, Northwest Energy Angels (Part 3)

By guest authors Irina Patterson and Candice Arnold

Irina: How long do you usually prefer to hold a company in your investment portfolio?

Kiki: We’d like to hold it five years or less, but the market now is more of an eight-year hold. Depending on the product, some of these are being acquired much earlier. >>>

Seed Capital From Angel Investors: Brian Garrett, Co-Founder And Managing Director, Crosscut Ventures (Part 8)

By guest authors Irina Patterson and Candice Arnold

Irina: We talked about entrepreneurs’ past experience and how much weight it carries when they are looking for funding.

Brian: It’s obviously better if you can grab, as an example, a Brian Lee, who is a co-founder of LegalZoom, and then founded Shoe Dazzle. You can look at him and say, “Yeah, there’s credibility here that he’s going to know how to scale this next idea.” He has since gone and done that. Those are, obviously, the best situations, but when you click with entrepreneurs and you buy into their vision and you can see their passion, as long as they show a credible path to executing, we’re willing to take first-time entrepreneur risk. >>>

Seed Capital From Angel Investors: Kiki Tidwell, Board Member, Northwest Energy Angels (Part 2)

By guest authors Irina Patterson and Candice Arnold

Irina: How many deals have you funded since inception in 2006?

Kiki: On our website, it says over $3 million in 18 companies. But this year, our total investment year to date is $926,000 in seven deals, and that’s in 11 months. Well, it’s 10 months, because we haven’t done November’s meeting. We’ll have our meeting next month. >>>

Seed Capital From Angel Investors: Brian Garrett, Co-Founder And Managing Director, Crosscut Ventures (Part 7)

By guest authors Irina Patterson and Candice

Irina: What your usual round size?

Brian: I would say that $500,000 to $1.5 million seems to be the magic number for seed rounds; therefore, the valuation could be as low as $1 million and as high as $4 million or $5 million for that level of dilution that I just talked about – the 20% to 40% range. >>>

Seed Capital From Angel Investors: Kiki Tidwell, Board Member, Northwest Energy Angels (Part 1)

By guest authors Irina Patterson and Candice Arnold

This is the forty-third interview in our series on financing for entrepreneurs. I am talking to Kiki Tidwell, an angel investor and board member of the Northwest Energy Angels, a membership organization of private investors who are interested in funding cleantech entrepreneurs. Founded in 2006 and based in Seattle, they’re investing in deals nationwide. >>>

Seed Capital From Angel Investors: Brian Garrett, Co-Founder And Managing Director, Crosscut Ventures (Part 6)

By guest authors Irina Patterson and Candice Arnold

Brian: If we’re rude in how we go about saying no to entrepreneurs, they’re not going to be likely to come back to us with the next idea.

For all intents and purposes, we could be wrong. This current idea may be a brilliant one. It just may not be right for us, so we try to be respectful to every entrepreneur.

We try to be responsive to every inbound request. It’s tough, I will acknowledge. We try to be a resource here in the Southern California market because, again, our goal is to foster a real ecosystem in innovation.

We need a lot of successes to breed the next generation of successes, so our goal is to try to be as helpful as possible. But we couldn’t charge for that. That wouldn’t fly. >>>

Seed Capital From Angel Investors: Brian Garrett, Co-Founder And Managing Director, Crosscut Ventures (Part 5)

By guest authors Irina Patterson and Candice Arnold

Brian: Our general thesis is that there are very few companies that are going to generate value north of $200 million. Most companies are being acquired in the $20 million to $60 million range, and there are great returns to be had there if you’re invested early and at the right price. It’s a great way to generate returns on a smaller fund. That’s the whole micro cap thesis. >>>