Seed Capital From Angel Investors: Venktesh Shukla, Chair, TiE Angels (Part 3)

By guest authors Irina Patterson and Candice Arnold

Irina: Would you consider investing in a $20 million niche market?

Venktesh: Yes. If it’s a $20 million market and somebody owns a decent chunk of the company and the valuation is, within two years of investing in it, let’s say,  $4 million. The company gets acquired for $20 million, that’s a very good exit for angels. >>>

Seed Capital From Angel Investors: Eric Pozzo, Fund Manager, Oregon Angel Fund (Part 2)

By guest authors Irina Patterson and Candice Arnold

Irina: Is this, managing the fund, your full-time job?

Eric: Yes, it is. And a lot of it is to facilitate the selection of companies that present and also to make sure that the due diligence gets done thoroughly and well and politely in a way that works for the entrepreneur as well as the investors.

But the other major role of the fund manager – and I do have a colleague here as well – is negotiating the deals. It would be very awkward to have 60 different investors out there negotiating what a valuation should be and what the terms should be. So, those discussions are left to the fund management, and we use the template from the National Venture Capital Association for our term sheet.

We’ve neutered it a bit, taken out some more offensive terms. One of the benefits of being in the fund here is that the deals are professionally negotiated with professional series A documents behind them. And an investor who ends up with $25,000 ends up with a portfolio of five different companies, of which she has approximately $5,000 into each company, but in a very professional way. >>>

Seed Capital From Angel Investors: Eric Pozzo, Fund Manager, Oregon Angel Fund (Part 1)

By guest authors Irina Patterson and Candice Arnold

This is the thirty-sixth interview in our series on financing for entrepreneurs. I am talking to Eric Pozzo, fund manager at the Oregon Angel Fund. It is a professionally managed, investor-driven angel organization that launches a new $3 million fund each spring and invests in companies in Oregon and southwest Washington. >>>

Seed Capital From Angel Investors: Venktesh Shukla, Chair, TiE Angels (Part 2)

By guest authors Irina Patterson and Candice Arnold

Irina: How many proposals do you receive per month?

Venktesh: It’s hard to tell, but so far I think we have received 60 to 70 proposals over the past three months.

Irina: Out of those, how many deserved a closer look?

Venktesh: Well, what we do is every month, on a rolling basis, we invite about eight companies to come and present to us face to face. And out of those eight, we select three for presentation to the full membership of TiE Angels at our monthly meeting. Out of those three, typically one company gets funded. >>>

Seed Capital From Angel Investors: Kindra Tatarsky, Director of Operations, Golden Seeds (Part 5)

By guest authors Irina Patterson and Candice Arnold

Irina: What do you think angel investors could do to increase their chances of success?

Kindra: It is obviously a risky investment strategy, so the most important thing is to build a portfolio. You can’t just pick one or two or three companies because there are so many things that can go right and so many things that can go wrong. And perhaps the company that you think looks to be the biggest concern when you first invest might end up being your biggest success and vice versa; the one that you think is a home run might have some unforeseen obstacles and end up going bankrupt. So, it’s critical to build a portfolio. >>>

Seed Capital From Angel Investors: Venktesh Shukla, Chair, TiE Angels (Part 1)

By guest authors Irina Patterson and Candice Arnold

This is the thirty-fifth interview in our series on financing for entrepreneurs. I am talking to Venktesh Shukla, chair of TiE Angels.

TiE Angels is an angel investment group formed by charter members of TiE Silicon Valley, the flagship chapter of TiE organization globally.

TiE global is a not-for-profit network of entrepreneurs and professionals dedicated to the advancement of entrepreneurship. It is spread across 55 chapters in 13 countries comprising 2,000 experienced entrepreneurs and business executives and 13,000 aspiring entrepreneurs and professionals as members.

TiE originally stood for The Indus Entrepreneurs, reflecting the South Asian background of the individuals who chartered the organization in 1992. Over time, TiE has come to represent Talent, Ideas and Enterprise, or The Innovative Ecosystems, through its activities and influences, lending a number of meanings to its acronym.

TiE Angels is a group of about 50 angel investors with approximate net worth of over $2 billion and investment focus on Northern California at the time of this interview.

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Seed Capital From Angel Investors: Kindra Tatarsky, Director of Operations, Golden Seeds (Part 4)

By guest authors Irina Patterson and Candice Arnold

Irina: Do you try to estimate a particular return over a particular period?

Kindra: Of course. That’s part of the entire process. We look at an anticipated return to see if the return makes sense for an investment and the valuation x return makes sense, so absolutely.

Irina: What’s your target return?

Kindra: Well, we target a 10x return over a three- to five-year period.

Irina: At what stage of a business’s development do you prefer to invest?

Kindra: Validated business. We do not invest in business plans. >>>

Seed Capital From Angel Investors: Kindra Tatarsky, Director of Operations, Golden Seeds (Part 3)

By guest authors Irina Patterson and Candice Arnold

Irina: Do you have  membership dues for your angel members?

Kindra: Yes. It ranges from $2,000 to $3,000.

Irina: How many members do you have?

Kindra: We have about 146 members.

Irina: Who are your members, usually?

Kindra: They range from CEOs of companies of various sizes – anywhere from Fortune 1,000 companies to Fortune 100 companies – they are cashed-out entrepreneurs, they are serial entrepreneurs, they are heads of divisions within large companies and Wall Street people as well. So, they range from Wall Street financial experts to marketing experts to consumer products experts to lawyers and scientists within the life science sector. We have a real breadth of expertise within our network. >>>