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Where to learn about Angel investing….

Knox Massey — Mon, 16 Nov 2009 16:14:34 +0000

Where are the best places to learn about angel investing? Here are the ones I use—national, regional and local.

National Resources:

- Angel Capital Association

- Angel Capital Education Foundation

- Frank Peters Show

- Dave Berkus

- Tech Coast Angels

Local Resources:

- Atlanta TechnologyAngels

Regional Resources:

- Piedmont Angel Network

- Upstate Carolina Angel Network

- Nashville Capital Network

@secretsig

Much Ado about Jason

Knox Massey — Wed, 14 Oct 2009 14:10:13 +0000

Yes, I have read Jason Calacanis’ recent post about “pay to pitch” angel groups. What is my response or thoughts? The issue of “pay to pitch” is an old issue. Years old. Decades old. This form of “compensation” has been around prior to angel groups. It’s a form of the investment banking model of a commission or “success” fee. Some angel groups adopted it years ago–because that was the “model”. Times have changed and you’ll find that now that the vast majority of angel groups do not use this model. Market forces over the last decade have reduced this model to a small minority of angel groups.

The group I ran for seven years, Atlanta Technology Angels, has never used this model–and never will. Our group always believed that any money we invested in a company—should stay in the company. Simple model, simple to execute.

Personally, I do not believe in the “pay to pitch” model. Why haven’t I spoken up before? Well, I have, but not publicly. Besides my (former) duties at ATA, I’ve also been busy helping to build the Angel Capital Association and the Angel Capital Education Foundation, two entities that help educate angel groups (and entrepreneurs) about best practices in angel investing. My jihad has taken years and lots of energy, but has been helpful and productive.

Jason certainly has the right to express his opinion, but he just joining an old battle and perhaps unintentionally maligning some angel investor folks that are on his side. However, I wish him the best.

UPDATE: Seems as if there are rumors swirling that this is all a promotional stunt or “revenge” for one of the “targeted” angel groups calling on Jason’s TechCrunch 50 (startup)companies to present to their group/groups (in exchange for a fee). It seems as if there is some ”tit for tat” name calling because it looks as if Jason doesn’t charge for TechCrunch50 companies to present to his audience/sponsors–but he does wrap them in exclusivity. Looks like Jason also has some history of accusing other fee based groups/conferences of “payola”.

Is this all just a competitive issue whereby Jason is trying to destroy what he deems competitors? Who knows….

UPDATE II:

Just sent a DM to Jason about an OAF in Atlanta. Will let you know what I hear.

State of the Angel Investing Market, Circa October, 2009

Knox Massey — Thu, 01 Oct 2009 16:51:10 +0000

A couple folks asked me recently to give an update on angel investing both in Georgia and nationwide as I see it. The last post I did on this topic was in February, 2009. My, how time flies. I’ve recently left my position as managing director at the Atlanta Technology Angels but I still remain on the Board of Directors at both the Atlanta Technology Angels and the Angel Capital Association. I continue to speak to angel investors all across the USA (and hear from UK, much of Europe and New Zealand and Australia) so my information should remain timely and up to date. In this post, I’ll probably talk Georgia-specific but also mention some national trends.

Please note that all thoughts and comments on this blog are mine and do not reflect the thoughts or comments of any outside organization.

1.) Current Investing

Much of the current investing activity in Georgia is going towards companies previously funded in the 2005-2008 timeframe. Very few new companies are getting funded by angels in late 2009. I know of a couple of new term sheets out to new companies in ATL and I know of a few companies that have just completed long term financing rounds, but I hear the “raise” for new companies is taking more time and is a source of frustration. Here’s why I think this is happening:

- Angel investors, depending on the individual and/or entity, have had a reduction of assets/liquidity due to the equity crash of September, 2008. This reduction may be 5%-15% or it may be 50%. The 5%-15% ‘ers are still looking, the 50% ‘ers are gone from the market. However, the 5%-15% ‘ers are still cautious (despite the 60% reflation of the S&P/Dow) for another downturn. So, many angels are protecting their current early stage investments by reinvesting into current portfolio companies to make sure these companies can last another 12-18 months. On a national basis, I’m seeing this same tactic across the board. The only exceptions to this are angel groups that have raised funds($2m-$5M) or groups in very active markets such as San Francisco, Los Angeles, or a very few NE markets. (More on angel funds later.)

- The angel market is in a state of flux in Georgia. New leadership at the Atlanta Technology Angels, the gradual withdrawal of Imlay Investments from the market, the addition of a Y-Combinator play (Shotput Ventures), the slips and slides of creating new angel groups in other Georgia markets, and Angel Lounge trying to find its voice all have combined to make life both exciting but somewhat confusing for entrepreneurs looking for funding.

-No Exits. I’ve been saying for a couple of years now that if there are no positive exits (or conversely, failures/bankruptcies) for current angel investors, the angels cannot recycle the previously invested cash they receive from a postive sale, M&A or IPO. And, no exits mean no “new” angels (or very few). If there are no exits, no recycled capital and no new angels, a stagnant economy is unintentionally created. Sound familiar? Yep, look around you at the economy. All the new money is from the Fed. How to help this situation? See #3 and #5.

-The era of Free Money……is over. See #2.

2.) Valuations

Valuations seem to have gone way off course. They are at stubbornly high 2007 levels–and have seen an increase in last 3-6 months. It seems as if there is no in between for the companies raising cash. Believe me, this is as frustrating for the angel investors as it is for the entrepreneurs.

3.) Angel Group Syndication

If you need to know what angel group syndication is, you’d better learn. If you don’t know that there are angel groups in other states willing to listen to GA companies, you’d better learn.

4.) Deal Flow

Deal flow has lessoned considerably this (3rd) quarter. However, there is a backlog of new companies that many angel groups are working through. I imagine that with the release of Capventure companies Tuesday night, Atlanta will see an uptick in dealflow for the short term.

5.) Tax Credits for Georgia Angel groups

Many of you know that a tax credit for Georgia early stage investors has been a long term project of mine for 5 years. Let me tell you, it hasn’t gotten any less important for me or for the State of Georgia. The reason North Carolina/RTP is cleaning our clock in funding young tech companies? Tax Credits. North Carolina has had tax credits since 1996 and now has two NEW angel funds of $5M each–all due to tax credits. As soon as GA politicians and GA old boy networks learn that tax credits aren’t just for the favored few, the better off Atlanta/GA is going to be.

That’s all for now. Happy to answer questions, if any. More posts later in October.

Please welcome Gordon Rogers to ATA

Knox Massey — Tue, 29 Sep 2009 00:02:49 +0000

As many of you know, Gordon Rogers has taken over as the Director/President of the Atlanta Technology Angels, a position I held from 2002-2009. Gordon “officially” started in this position the week of September 7 and has hit the ground running. He has since been to a whirlwind of meetings, lunches, coffees, screenings, coaching sessions, mentoring sessions, etc over the last three weeks and is headed off to Greensboro, North Carolina this Wednesday for the SE Angel Capital Association meeting which will be held September 30 through October 1. This is exactly why the ATA Board of Directors picked Gordon. He exemplifies what ATA has been doing for 10 years–He has jumped in head first, can’t get enough of what ATL has to offer and wants to give back to the community both monetarily and from operational and startup experience.

Gordon has been a member of ATA since 2007 (Gordon is not a founding ATA member as was erroneously noted in a community Angel Lounge email this week) and has an entrepreneurial background which should resonate thoroughly within the Atlanta community. Gordon has invested initially in Elf Island/Good Egg and has been a tireless supporter of both the company and their CEO, Craig Kronenberger. I have no doubt that many other companies and entrepreneurs will receive support from Gordon for years to come.

Please take the opportunity both to welcome Gordon and to offer your support.

gordon@angelatlanta.com

404-526-6037

Moving On from ATA…

Knox Massey — Wed, 09 Sep 2009 20:26:17 +0000

September 9, 2009

Friends–

After seven active and busy years as the Managing Director of the Atlanta Technology Angels, I am stepping down from that position at ATA to become the Managing Partner of a family partnership, Keith-Massey Family Partnership, LLLP. Day to day operations of ATA have, as of this week, been taken over by Gordon Rogers, an active member and investor within the Atlanta Technology Angels group. However, my commitment to local, regional and national angel investing will stay strong as I will remain a member of ATA, will remain on the ATA Board of Directors and will remain on the BOD of the Angel Capital Association.

I am indebted to many folks, among them Sig Mosley, Melanie Leeth, Bill Henagan, Dan Pompilio, Meade Sutterfield, Steve Chaddick, Mike Dickerson, Mike Eckert, Clark Gilder and many, many others, all of whom helped patiently teach me the finer points of investing in young technology companies and working with other investors.

I am most proud of the 25 companies that the Atlanta Technology Angels investment group help found or fund during my watch over these seven years. Those include:

Aretta OpenSpan

Asankya Oversight Tech

AeroVectrex Pramana

Beacon Preparis

CentraFuse Qcept

Calorie and Pulse Sentrinsic

Elf ISland SoloHealth

Fortel DTV SimpleC

Global Crypto TerraGo

GLobal Standard Financial Websingularity

Invirtus Zeewise

Invistics Jacket Micro Devices

Link2Cell

What did I learn?

- Relationships, above all, are the most important aspect of this type of investing. Good relationships last much longer than any investment.

- This type of investing is hard work. Writing a check is only the first step.

- Business cycles count.

- Believe in what you do. If you do, success will find you.

- Simplify your priorities and then focus on what is most important.

- Patience, patience, patience.

- Life goes on.

My contact information will stay the same. I look forward to seeing you soon.

“Open House” Reviews for early stage Georgia Technology Companies seeking funding

Knox Massey — Fri, 17 Jul 2009 13:37:32 +0000

In August, the Atlanta Technology Angels investor group is having their review sessions on August 12 and August 19 in the ATDC BOD room on the first floor of 75 Fifth Street. For this month, we are having an “Open House” review that will be on a “first come, first serve” basis.

All we ask is that:

1.) You are a “technology” company.

2.) You are based in the great State of Georgia.

3.) You have not raised more than $500,000 and are seeking no more than $1,000,000. (This doesn’t mean we will invest $1,000,000–it’s only a criteria for these sessions.)

4.) If you have valued your company, the valuation is no more than $3,000,000.

5.) You are not selling common stock (which we do not buy/invest in).

6.) Be on time and be mindful of the review timeframes.

(These are rough guidelines and by no means are final guidelines for an investment by our group.)

We are meeting from 12:00-5:00 PM on both dates. Each company will have 20 minutes total to give a short presentation/review of their company and/or product. We will be eating box lunches from 12:00-1:00. The time slots will be thus:

Timeslots for August 12 AND August 19: (We are FULL for both days. Check back for September dates!)

12:00-12:20

12:30-12:50

1:00-1:20

1:30-1:50

2:00-2:20

2:30-2:50

3:00-3:20

3:30-3:50

4:00-4:20

4:30-4:50

So, 10 slots, two dates, twenty companies. All of the participants from our side will be accredited investors and part of ATA. There will be no outside guests or non-investors at the review sessions. All information presented will be kept confidential.

I do have approximately 5 companies that are “pre-slotted” as they are companies we have been talking with previously. So, fifteen open slots.

Contact: knox.massey at angelatlanta.com

Get your move on.

Georgia Companies funded by angel investors since 1999

Knox Massey — Mon, 06 Jul 2009 13:31:19 +0000

I have decided to create a list of all the Georgia based companies that I can find that have been funded by angel investors since 1999. I have a database of over 200+ Georgia based angels that I have collected over the last few years and have contacted as many as I could. I have listed the names of over 100+ companies so far, and will be adding to the list over the next couple of weeks as more information is received. However, I imagine that what I find will only be roughly 50-75%% of the total companies funded during this time.

Doing this over the last couple of weeks has actually been quite rewarding. I got a chance to talk to some folks that I have not heard from in years–and the memories of funding all these companies was a treat to recall.

Why am I doing this?

3 reasons:

1.) It’s an impressive list.

2.) There is a new perception in the Atlanta area that “not that many companies in GA” have been funded by angel investors. Formal angel investing has been active in GA since at least 1989, if not before. Yes, angel investing existed before ATA and Imlay Investments–and it will likely be around long after both have gone.

3.) There is a new wave of young entrepreneurs in Georgia interested in learning about early stage investing. You need to know your history in order to be effective. So, here ya go.

If I have missed any companies, please let me know.

180Commerce

Access Integrated Systems (now Birch Telecom)

Advanced Charger (Enrev)

Agent Secure

Anydevice

Ardex

BancIntelligence

Biltmore Communications

Broadsource

C2 BioFuels

C3 (Sparco)

Calorie & Pulse Technologies

Carbon Motors

CentraFuse (Flux Media)

Chain Reaction Ecommerce

Chamberlain Medical Technologies

Channel Link

Chexar (formerly El Banco de Nuestra Communidad)

Chutney Technologies

Cirrex (Visionex)

ClearLeap

Cloud Sherpas

Commerce Science Corporation

Compliance 360

Connecture

Constructware

Cirrux

D4 Technologies

Damballa

Digital Doctor

Derivion

Damballa

Digital Envoy

eAttorney

e2procure (Augusta, GA)

eBroadcasters.com

eGulliver

eHatchery

Elf Island

Emcien

Engineered MultiMedia

enLeague

ePanacea

eQuorum Corporation(Cadnet)

ExGov

FountainHead, Inc

Fundraisinginfo.com

Gardening123.com

Galileo

Greenway Medical Technologies

Global Crypto Systems

Global Standard Financial

GroupTickets.com

GuardedNet

HERO

Homeserve

Hometodo.com

Home Wireless Networks

Idmon

Incanta

Informium

Integrated Broadband Solutions

Intelligent Sensor

Jacket Micro Devices

Kidsmart

Knowlagent

Knowledgestorm

Kudzu Interactive

Last Minute Tee Times

Link2Cell

LocalBusiness.com (DigitalSouth)

Mardome

MarketWorks (aka: Auctionworks)

MarketingCentral.com

MaxMouth

Medizeus

Mercatus Wireless

Mfg.com

Monorail Computer Corporation

Monticello Corporation (Wuliweb/PaperTiger)

Mother Nature Network

Neurotic Media

Notice Now

Nschools (Education Networks)

NuTec Sciences, Inc.

Playon Sports (2080 Media)

Photobooks

RiverDrop

TradeUps (Market Velocity)

Qualtre

Quantira

Quellan

Oversight Technologies

Qcept

Radiance Solar

RecoverDebt

RentMoney.com

RevenueTech

SoPworx

Stonebranch

Sprout

Technology Builders

Tcert

Tradeups (Market Velocity)

Togetherweb

University Angels

Unlink, LLC

USBA Holdings, Inc.

Vistascape (Acquired by Siemens in 2006)

Vertical Acuity

VetExchange

Vocalocity 1.0 (not to be confused with Vocalocity 2.0 funded by NM and the investors who bought assets of Vocalocity 1.0)Jacket Micro DevicesWaldor Group

Angel Investing Program for Entrepreneurs in Georgia

Knox Massey — Tue, 28 Apr 2009 16:16:03 +0000

A number of investors within the Atlanta Technology Angels and the Atlanta community have recently asked me if we (ATA) could provide a short program to help Georgia based entreprenuers understand the basics of angel investing—from an investors viewpoint.

I said, “Sure, when?”

They said, “How about this summer?”

I said, “OK.”

As the Atlanta Technology Angels has been investing in young technology companies since 1999 and has invested in over 40 Georgia based companies, a program such as this makes perfect sense. Additionally, investors in the Atlanta Technology Angels also have mentored dozens of Georgia-based entrepreneurs since 1999. Mentoring entepreneurs, as well as funding them, is not something we boast about–it is something we feel is a natural extension of what we do. Last, as there is often much misinformation spread about angel investing and angel investors, this is probably a timely program for Georgia-based entrepreneurs.

So, here it is:

“Angel Investing for Entrepreurs in Georgia”

When:

- July 8 (JULY 8 EVENT WILL HAVE TO BE RESCHEDULED DUE TO PARKING GARAGE COLLAPSE! EMAILS TO GO OUT THIS WEEK…)

- July 23, 12:00-2:00 PM (ON SCHEDULE and is FULL!)

Where: ATDC BOD room, 75 Fifth Street, RBC Building, Midtown (lunch will provided for all attendees)

How Many: Up to 12 entrepreneurs each on July 8 and July 23

Who is helping: Accredited Georgia-based Angel Investors. All angel investors will be active and have a mimumum of three angel investments.

Who should attend: Georgia-based entrepreneurs who are currently building/growing a young company and who might need to raise private capital at some point…. We’ll rely on the honor system here–but you might be asked to talk about your company at some point…

Outside Sponsors: None

Service Providers: None

Cost: None

How do I sign up: email me at knox.massey at angelatlanta.com or respond to this post

Questions: Same email as above

The Largest Angel Investor Event EVER in Atlanta, GA!

Knox Massey — Sun, 22 Mar 2009 16:35:47 +0000

I am taking a break from my digital “Lent-cation” to post some information about the 2009 Angel Capital Association’s Annual Summit in Atlanta, GA, April 15-17 at the InterContinental HotelIn Buckhead.

If you are an angel investor, or have thought about participating in angel investing, this event, without exception, is the place to be April 15-17, 2009.

I am the Chair of the 2009 Summit here in Atlanta and have had a wonderful time helping to create the content for this year’s summit.

Here’s the 2009 Agenda.

In helping to create the content for this the 2009 Atlanta Summit, I’ve had the rare opportunity to work with angel investors from all over the country in preparing for this year’s Summit. I have been stunned by the amazing diversity, passion and determination of angel investors throughout the USA.

I’m also delighted to have two local sponsors, Imlay Investments and Georgia Tech (E2e Works). Sig Mosley and Melanie Leeth at Imlay have been patient mentors to me and Don Betts at E2e Works has been a faithful proponent of angel investing in the State of Georgia. Other sponsors include Microsoft BizSpark, National Science Foundation and Vencore Capital.

You don’t want to miss Friday’s VC panel with Brad Feld, Managing Director of the Foundry Group, Greg Foster of local VC firm, Noro-Moseley and Roger Krakoff of Sigma Partners. This lunch panel will be moderated by Ian Sobieski, founder and Managing Director of the Band of Angels.

You also don’t want to miss Thursday’s “Luncheon Fireside Chat” with Mark Heesen, president of the National Venture Capital Association,and John Huston, Chair of the Angel Capital Association BOD.

Last, you don’t want to miss the Friday morning discussion on “interregional syndication”. Angel groups throughout the NE and SE have been syndicating investments with each other for years. However, in these economic times, the issue is more important than ever. There will be a “realtime” discussion of current syndication practices and processes. In addition, three companies will present investment opportunities to the entire angel audience.

OK, enough names and topics.

Here is the ACA Summit registration information.

Hotel reservations are here.

And, again, a full agenda of the Summit here.

Any questions, please email me @: knox.massey at angelatlanta.com

I look forward to seeing you there!

Time for Reflection

Knox Massey — Sun, 22 Feb 2009 15:47:57 +0000

I’m taking time off this year during Lent from Twitter, Facebook, blogs and will use limited email. Life is busy and sometimes you just need to slow down for reflection. Lent this year is 2/25/09 through 4/11/09–which is 46 days.

I will be posting my Angel Market posts in early March and early April and will also use this blog to post announcements for the upcoming Angel Capital Summit here in Atlanta April 15-17 at the Intercontinental Hotel in Buckhead.

If you need to get in touch, visit me in my office at 75 Fifth Street. Otherwise, see you April.