Mile High Tech Entrepreneurship Conference: Angel Financing- Understanding the Early Outside Money In

Tags: Entrepreneurship

For a report summarizing the conference written by Nick Wyman and Dane McDonald, Click Here.

Angel investors perform critical yet varied functions in the startup world. Conflicting depictions of angels reflect mythology as well as the wide range angel-related roles. In early stage finance, an “Angel Investor” is alternately characterized as hero / heroine (hence the name “angel”), unqualified interloper (“dumb money”), individual with transcendent capacities (“super angel”), or a member of an investing syndicate (“angel groups”). In addition to the variety of angel types, clear understanding of angel investing is challenged by a lack of transparency associated with angel investing. Angels are often individuals who prefer to retain a low public profile and seldom publicly disclose results from their early stage investing portfolio. Aggregate analysis of angel investments as an asset class is difficult to perform.

While angels come in many shapes and sizes, there is anecdotal and conceptual support that they collectively perform an increasingly vital role in startup financing. At least three factors suggest that angels are increasingly important in the Front Range. First, especially in software, angels now play in what used to be the VC sand box. Plummeting information technology costs -enabled by cloud computing, Moore’s law, and broadband capacity – have made “$500K the new $5 million.” Thus angel-size rounds are now sometimes a viable alternative to VC investment, at least for companies that are not capital intensive. Second, the venture capital industry – in particular, limited partners – has trended away from regional VC funds, resulting in a contraction of Colorado-based institutional money. Combined with retirement of the first generation of the region’s VCs, the Front Range has seen a decline in Colorado-based VC funds. And third, dense networking opportunities and high velocity information flows in the Front Range make it easier for angel investors to plug into the area’s scene. TechStars, Open Angel Forum, Silicon Flatirons events, the Founder’s Institute, the New Tech Meetup, and a host of other events and organizations allow for would-be angels to network and see deal flow without incurring inordinate amounts of search and transaction costs.

Yet angel investing remains tricky. Little reliable public information exists about how angels fare and how angels perform as an asset class is difficult to discern. Even among specialized professional investors, such as venture capitalists, variance in performance is highly divergent, resulting in some limited partners to “pick the 10 best and forget the rest.” Angels also are exposed to greater risks and uncertainties than VCs, yet often receive fewer protections and control mechanisms in exchange for their investment.

Our March 22 Conference will analyze these and other issues surrounding the angel investing world. The Conference schedule is as follows:


Welcome and Introduction
  • Phil Weiser
    Hatfield Professor of Law, University of Colorado Law School
  • Brad Bernthal
    Associate Professor, University of Colorado Law School
State of the Economy Keynote
  • Anthony Chan
    Chief Economist for Private Banking, J.P. Morgan
Angel Investor Keynote
Panel Discussion 1
  • Jason Mendelson — Moderator
    Senior Fellow, Entrepreneurship Initiative, Silicon Flatirons
  • Jeff Clavier
    Founder & Managing Partner, SoftTech VC
  • John Ives
    Angel Investor
  • Erika Trautman
    Chief Executive Officer and Co-Founder, Rapt Media
  • Bret Fund
    Assistant Professor, Management & Entrepreneurship, Leeds School of Business, University of Colorado
  • David Cohen
    Founder and Co-Chief Executive Officer, Techstars

Recognition of Entrepreneurial Community Volunteers
Academic Keynote
  • Jeff Sohl
    Professor and Director, Center for Venture Research, University of New Hampshire
Panel Discussion 2

Know What’s Next