We consider it self-evident that the towns that
produce the best baseball teams are those with the most active Angel
groups. Consider the current World
Series in light of recent HALO reports on Angel Activity. In 2012 the St.
Louis Arch Angels investing group was lauded as one of the most active in the
region. In Q1 2013 they were recognized as one of the most active in the entire
country.
In Q2, 2013, New England Angels edged out
California in the total dollars
invested during the quarter, with the Launchpad Venture Group
remaining a perennial top performer.
So naturally, it is the St. Louis Cardinals vs. the Boston Red Sox in this year's World Series.
It’s time to warm up. Angels take the
field, entrepreneurs to the bullpen, while I retell the tale of how we
became “Angels.”
Back in the mid-1970s, at the
University of New Hampshire, Bill (Prof. William) Wetzel was researching how
new companies raised startup funds. His studies uncovered a new class of
investor: high net worth self-made individuals who were willing to take
greater risks or accept lesser returns than others. More importantly, these
investors provided more than money; they provided the benefit of their
experience, which was often of more value than the amount of money they could
invest. A typical investor would develop a portfolio of four or five
companies, typically located within a day’s drive of his home.
But what to call these patrons?
It occurred to Wetzel that these investors had much in common with the
legendary “angels” of Broadway, who supported young artists out of a sincere
interest in promoting the careers of talented people.
Thus Wetzel began to call his
business investors “angels.” “We didn’t originate the term, we stole it
from Broadway,” he says. Then along came Inc. Magazine, where the
term first appeared in print in an article, “The Truth about Angels, More
Than a Myth.” Thus did we become angels, are angels, and most
likely will be called angels in the future, as the term becomes even more
institutionalized in the names of many angel groups and in
internationally recognized trade groups, such as our Angel Capital
Association.
Epilog: How art thou fallen from
heaven, O Lucifer, son of the morning! Isaiah 14:12
Most Broadway angels have faded from
memory, but here in the Northeast the fame, or rather notoriety, of one
particular super-angel may serve us as a cautionary tale.
Handsome Harry Frazee, a well-known
Broadway angel, added the Boston Red Sox to his portfolio in 1916. The team,
which won the World Series in 1918, was stocked with great players, including a
young pitcher/hitter named Babe Ruth.
But by 1920 Frazee’s finances were
depleted, so he sold Babe Ruth to the New York Yankees for $125,000 in cash and
a $300,000 mortgage on Fenway Park. No trade, just cash. In rapid order,
Frazee, who had purchased the Red Sox for $500,000, sold and traded additional
players for at least $155,000. In 1923 he sold the team, now the worst team in
baseball.
With money from the Ruth sale,
Frazee backed several Broadway plays, one of which, when rewritten as a musical
comedy, became “No No Nanette,” the biggest hit of the era. Once again
Frazee was wealthy, but in the minds of my parents and grandparents generation, he
became the most despised man in Boston history. RIP Harry Frazee, reputed drunkard and letcher (we said they didn't like him).
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So what Had Frazee become? He had
bought a great team, sold off the assets, destroyed the hopes of millions of
fans young and old, while enriching only himself. Had he passed in rapid
succession through angel investing into venture capital and straight on to private
equity? They say that just because a vegetarian starts eating meat doesn’t mean
he has to go all the way to cannibalism. All we know for certain is
that from 1920 onwards, Harry Frazee was most assuredly Ruth-Less.
The Red Sox didn’t win another World
Series for 86 years, a drought often called “The Curse of the Bambino.”
They also haven’t won another world
series at home since 1918, although they have two chances to do so starting
tonight.
Epilogue. For
the first time in 95 years, the Boston Red Sox won the World Series at home,
defeating the St. Louis Cardinals 6-1 at Fenway Park in the sixth and final game
of the 2013 series. Reversing the memory of the Frazee years, the Red Sox had
climbed from the basement of the American
League East to the World Championship in just one year.
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