Angel Syndicates Earn Respect: Boston, San Diego, St. Louis

What is the difference between a seed round from a VC firm and a seed round from an angel syndicate? Assuming that money is equally green and fungible, and the amounts are comparable, we don’t see any difference.  Yet the business press often treats VC fundings as newsworthy while ignoring angel ones.  Thus did our fond hearts leap with joy last week when Dan Primack listed the following two fundings in his Fortune Term Sheet newsletter under venture capital deals.

Panjo, a Santa Monica, Calif.-based online marketplace for auto, sport and hobby enthusiasts, has raised $1.6 million in seed funding. Spark Capital led the round, and was joined by Bertelsmann Digital Media Investments, Lerer Ventures and Mesa. Panjo was created within the MuckerLAbs accelerator.

Crowdly, a Facebook-based advocate management platform, has raised more than $1.2 million in seed funding. Launchpad Venture Partners led the round, and was joined by New York Angels, Laconia Ventures and individual investors. Crowdly is based in Boston. 

Spark Capital is a Boston based VC firm that enjoys an excellent reputation.  Launchpad is a Boston based angel group that likewise enjoys an excellent reputation.  Our congratulations to Primack for leading the way toward pari passu press coverage. 

Three years after it pitched at TechStars demo day, Crowdly has pivoted and raised $1.2 million. Its earliest investors – angels Marcia Hooper (Ampersand, Advent, Castile, HooperLewis), Peter Clay (Gillette) and Jim Alvarez (Marketing Information and Technology Inc.) – are still along for the ride, as is TechStars. New investors include Launchpad Venture Group, New York Angels, and Laconia Ventures.

Reportedly,  after a very small initial raise, Crowdly's angel investors came back with $250,000 to carry it through about eight months of new product development and four months of beta testing. Input from early customers helped sell the story.

Crowdly allows companies to find, rank and connect with customers that are passionate advocates for their brands. The company's platform shows the lifetime influence of their top fans and a complete history of fans’ interactions over time

 

Heard on High

The Tech Coast Angels have led a new round of investment in Yalpert, a round that includes additional investment from Desert Angels, Pasadena Angels, and other independent angel investors. Yapert raised $500,000 during its initial Founders Round in 2012, bringing the funding total to $1.7 million. Yapert provides an interactive mobile magazine bringing fans the best video and image-based trending content from the visual web based on today’s most popular interests.

 

The St. Louis Arch Angels and other local  investors have teamed up  to lure a Rochester New York life sciences company to locate its production facilities in St. Louis. The Missouri Technology Corp. announced Thursday a $200,000 investment in a life sciences startup Adarza BioSystems Inc. Earlier this year Adarza received a matching investment from BioGenerator, an early stage capital fund based in St. Louis. In May, Adarza won a $50,000 Arch Grant. It also has received investments from the St. Louis Arch Angels and other local private investors. In addition, Adarza won a $1.8 million federal grant to help develop a prototype.

Rand Henke, one of Adarza’s co-founders and its chief executive, said the startup is “very excited about our expansion into St. Louis. The company is moving from the research phase in Rochester to the product phase of manufacturing and sales, which will be done in St. Louis,” he said. “We’ll be launching our first products next year, and we’re looking to set up our operations there.”

Subscribe to the Angel Investing News

Latest HALO Report, Q1 2013, says Angel Groups Invest More Per Deal, Stay Local, Back 207 Deals Totaling $222 million.

The Angel Resource Institute (ARI), Silicon Valley Bank (SVB) and CB Insights release the Q1 2013 Halo Report today, a national survey of angel group investment activity, which finds round sizes are trending up to a median of $680K per deal, pre-money valuations remain stable at $2.5 million, and most angel investment happens in angel groups’ home states.

US angel investment continues to be dispersed nationwide, and in the first quarter entrepreneurs in the Southwest region of the country received a slightly larger share of dollars than startups in California, for the first time.  The sectors getting funding remain concentrated in Internet, healthcare and mobile, with 72% of completed Q1 deals in these categories.

“The market for angel investing is solid: pre-money valuations are stable, round sizes are trending up, and market activity is spread widely throughout the U.S.,” said Rob Wiltbank, Vice Chairman of Research, Angel Resource Institute.  “The key trends over the last few years have been syndication and broader geographic distribution of investment; both of which suggest that attractive new ventures are finding places to start all over the country. ” (Editor's Note: syndication in the Halo Report refers to  cases where there is at least one angel group plus at least one other investor or investment group in a given deal.)

An Infographic summary should be available here: Infographic.

Halo Report Q1 2013 Highlights.

Round Sizes

Median angel round sizes reached another five quarter high at $680K in Q1 2013 up from $550K a year ago and $650K last quarter. When angel groups co-invest with other types of investors, the median round size is higher at $1.5M. Seventy-five percent of angel deals are syndicated.

Valuations

Pre-money valuations in early stage companies remain steady at $2.5M.

Locations

For the first time the Halo Report compares the location of angel groups with the location of their investments. Eighty-one percent of deals were completed in the angel groups’ home state over the past 12 months.

Sectors

Together, Internet, healthcare and mobile companies completed 72% of angel group deals and received 64% of angel group dollars. All three sectors closed more deals than one year ago and healthcare companies received a slightly larger share of angel group dollars than in Q1 2012.

Most Active Angel Groups

Based on total deals, the most active angel groups in Q1 are, in alphabetic order, Alliance of Angels, Desert Angels, Golden Seeds, New York Angels, Sand Hill Angels and St. Louis Arch Angels.

Angel groups that invested the most per deal in the last 12 months are, alphabetically, Golden Angels Investors, Golden Seeds, Houston Angel Network, JumpStart New Jersey Angel Network, Nashville Capital Network, Oregon Angel Fund, and Tech Coast Angels.

Geography

Angel group investment deals are more evenly distributed across the US than in years past. Seventy-three percent of angel group deals are now done outside California and New England, although 30% of dollars are invested in these regions. The Southwest region edged out California for the first time, with 18.1% share of angel group dollars. Year over year, companies in the Great Plains region and New York saw the largest increase in angel group deals. Declines of equal proportion are in New England and the Southeast over the same time period.

----

The Halo Report includes aggregate analysis of investment activity by angels and angel groups and highlights trends in round sizes, location and industry preferences. The data is collected via survey and aggregation of public data using CB Insights innovative data analyses. The Q1 2013 Halo Report data is based on 207 deals totaling $222 million dollars invested.  The transaction details are available in the CB Insights subscription database for users to review and analyze themselves.  Academics may also access some of the data through ARI.

The Angel Resource Institute (ARI) is a charitable organization devoted to education, mentoring and research in the field of angel investing, a growing driver of our entrepreneurial economy. ARI was founded by the Ewing Marion Kauffman Foundation. The programs of ARI include educational workshops and seminars, research projects and reports, and information about angel investing for the general public. ARI is affiliated with the Angel Capital Association, the professional association of angel groups in North America. 

SiliconValley Bank is the premier bank for technology, life science, cleantech, venture capital, private equity and premium wine businesses. SVB provides industry knowledge and connections, financing, treasury management, corporate investment and international banking services to its clients worldwide through 27 US offices and six international operations.  (Nasdaq: SIVB). 

Silicon Valley Bank is the California bank subsidiary and the commercial banking operation of SVB Financial Group. Banking services are provided by Silicon Valley Bank, a member of the FDIC and the Federal Reserve System. SVB Financial Group is also a member of the Federal Reserve System.

CBInsights is a National Science Foundation-backed data-as-a-service firm that collects information on private companies and their investors and acquirers.  CB Insights data and technology is used by firms to make better marketing, procurement, lending, acquisition and equity investment decisions and to gather data-driven market and competitive intelligence.  The firm's data is regularly cited by leading media publications including the New York Times, Forbes, Bloomberg BusinessWeek and Fast Company among others.

Subscribe to the Angel Investing News

Arch Angels report a record year, investing $5.6 million in 16 companies

Saint Louis, MO.  The recently expanded Arch Angels network invested $5.6 million in 16 new and existing startups in 2012, the largest number of companies the Arch Angels has ever funded in a single year. This additional funding brings the total investments the network has made in its eight-year history to more than $31.5 million in 37 companies. 

In 2012, the Arch Angels invested $3.3 million in nine new early-stage companies hailing from the life sciences and technology industries. They invested an additional $2.3 million in seven companies they had previously funded.

 The Arch Angels network also saw an increase in membership in 2012, growing its base by nearly 43 percent from the prior year, from 47 members in 2011 to 67 today, creating a more robust source of funds for emerging entrepreneurs. This growth is due, in part, to a merger with local financial services technology angel investing group FinServe Tech Angels. The two organizations joined forces on Sept. 1 to further strengthen angel investing in the St. Louis region. 

 “The growth of our organization and in the number of investments we’ve made over the past year have been reflective of the growing support for the entrepreneurial base in our region,” noted Gil Bickel, chairman of the St. Louis Arch Angels. “We continue to see new high-quality investment opportunities and previously funded companies maturing and advancing their business models, contributing to the record number of investments this past year and catapulting us past the $30 million mark.”

“We have much to be proud of as a group,” notes Bickel. “We have helped to create ground-breaking technology in multiple fields and, together, have helped strengthen angel investing and entrepreneurial activity in the St. Louis region. I see a bright future for startups and investors, alike, as we continue to come together to offer the support and resources necessary for these companies to move forward.”

Year  2013 is off to a great start for the Arch Angels, according to Bickel. They have invested a little over $2 million in 7 deals so far this year. Four of those are new companies while the other three are follow on investments.

Background.

The St. Louis Arch Angels network was founded in January, 2005, as an independent 510c(6) not-for-profit corporation. Arch Angel members, business leaders from the St. Louis region, provide seed and early-stage capital in the range of $250K-$1M, an investment range not generally served by venture capitalists.

 

Startups backed in 2012 include the following: Bonfyre, Elemental Enzymes, Euclises Pharmaceuticals, JBara Software, Kypha, LockerDome, NeuroLutions, NewLeaf, Symbiotics, and Systematic Revenue.

  Subscribe to the Angel Investing News, it's Free (mostly)