Monday, November 26, 2012

Launchpad, Retaining Momentum, Announces Two Successful Exits

Angels at rest tend to stay at rest, while angels in motion tend to stay in motion, at least that’s my application of Isaac Newton’s laws to start-up investing. Launchpad Venture Group certainly has great momentum this year, being recognized among the largest and most active angel groups in 2011 and for the first half of 2012.

Since the emergence of accelerators and AngelList make it easier than ever to find new investments, it is a good time to recall that the angel business model does not depend on making lots of investments, it depends on successfully exiting them.

Managing Director Christopher Mirabile tells us that Launchpad has two exits so far this year.

Copiun was acquired by Good Technologies.  Launchpad sourced them, seeded them, and then invested in three additional rounds between 2009-12.  “Each round had a slightly different return, but overall we put in about $800K and got back about $3.4M for a 4.3X return.” (This could be greater depending on the success of the acquirer).

Vela Systems was acquired by Autodesk.  Launchpad did three rounds between 2006-8.  “Again, each round had a slightly different return, but overall we put in $390K and got back $1.7M for a 4.4X return.”

“In addition we have several others that are pretty close and might pop this year.  All in all, a great year for Launchpad!” says Mirabile.

Sources of these investments.

With so many new groups formed to assist us in endangering our money, we have started to ask our angels where their best deals originated.

“The founder of Copiun, Puneesh Chaudhry, approached me after I spoke
at a panel for Babson College, says Managing Director Hambleton Lord. “We discussed his idea for a company and I put him in touch with a couple of Launchpad members who had experience in his market segment.

“In the case of Vela, I believe we were introduced by James Geshwiler (of the Common Angels).  James asked me if we had any expertise in the construction /
commercial real estate market.   At the time, I was on the board of a
company that sold software into commercial real estate owners and
property managers.   In addition, we had a member, Tim Curran, with
enterprise software experience. Tim became the Launchpad  board
representative on Vela's board and then later on became the CEO of the

We congratulate Launchpad for their latest successes, with very great thanks to Christopher and Ham for sharing their experiences with all of us.

An Angel’s Diary.

At MIT fifty years ago, Professor Alan Lazarus taught every student about motion and vectors using a demonstration, running double sessions in lecture hall 26-100. He rigged up a model train with a spring loaded cannon on a flatcar pointing straight up. While the train was stationary, he fired a ping pong ball from the cannon; the ball went straight up, and then fell straight down, right back into the cannon. He repeated the experiment, with the train moving forward very slowly. Lazarus kept increasing the speed of the train, and each time he fired the cannon the ball maintained its forward momentum as it was fired, returning each time into the cannon. A very effective demonstration clearly remembered today.

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