🚀 Week 9 by the Numbers

🧑‍🤝‍🧑 Investor Members: 8

💸 New Venture Challenge Dollars: $325,000

🤝 Newsletter Subscribers: 269 (+6)

New Venture Challenge Tonight!

The best pitch competition on the planet has it’s annual showcase tonight at 6pm MST at the Boulder Theater. Six teams will be competing for their share of $325,000 in investment and prizes.

This competition has been a beacon for the entrepreneurial spirit in the Boulder community for over a decade. You can still RSVP here to attend. I hope to see you there!

Angel Group Organization - An Unavoidable Mess?

From the piles of feedback I hear from people regarding being involved with angel groups, a common point is that many are terribly and irredeemably disorganized.

I’ve heard stories of angels being unable to determine if their wired funds have been invested or not, group managers not knowing how many members they have, and of members performing “diligence” on a deal for 2 months just to invest $5k.

Needless to say, this is not what we want at Boulder Angels.

How to Organize an Investment Group

There are two main kinds of angel groups. The first is member-led and the second is manager-led. Both have their success stories.

Member-led Groups:

Ex: MIT Alumni Angels, or Stanford Alumni Angels

These groups are comprised entirely of angel investor members, and those members appoint other members to coordinate pitch sessions and deal processes.

They are also simpler to create as they require no full-time employees and often have very low annual member dues. The deal flow for these groups is often crowdsourced from the members’ day to day, not from hunting down opportunities. MIT and Stanford alumni are usually engaged and plugged into high places, so deals tend to just… appear.

However, angels invest because they want to… not because they have to (like a VC).

With nobody setting deadlines to actually make deals, investment processes can stretch on for months, frustrating members and entrepreneurs.

In addition to this, angel investors often have other time consuming occupations and responsibilities, so the coordination of frequent community events and structured internal processes falls to the wayside.

Many of these groups end up hiring full-time directors once they reach the size where they need to clean up their ever-growing deal flow funnel and portfolio management.

Manager-led Groups:

Ex: Denver Angels and Duke Capital Partners

These types of groups are buttoned up. Their websites are great, their internal systems are great, and they get deals done.

These groups usually have higher annual dues, fees on investments, and carry to support several FTEs. A full time team allows groups like this to scale quickly and allocate some serious cash to a wide variety of deals.

Once a group like this reaches a size of 100+ members, raising a venture fund from the group is a rational next step, with both of the above groups having done just that. Shoutout to David/Blair @ DA and Kevin/Peter @ RVC.

Beyond a certain size, some of these groups struggle to remain a tight-knit feel, as it becomes nearly impossible for members to know all the other members. Without proper community engagement, these groups also suffer from high churn and an inefficient leveraging of the group as a source of capital.

What is Boulder Angels?

Our deal process will always be more manager-led than not, especially as we approach multiple FTEs. Deals are both crowd-sourced, and scouted. I don’t have the bandwidth to fully execute deals myself, but I try to make our deal process as simple and accessible as humanly possible.

That being said, we also function as an alumni club. Our purpose is not only to make great deals, it is also to invest socially in each other and in the Buff/Colorado community. The majority of our Buff members still live in Denver/Boulder, so in-person events are a priority for us.

I’m sure there will be struggles to stay organized as a group, but for now… all is well.

If you want to see Boulder Angels grow to deploy millions of dollars into the Buff community annually, listen up! If you are an angel and would like to get involved, or know of a Buff launching an awesome startup, let me know at [email protected]

Our first pitch session is May 1st from 3:30-5pm MST. If you are interested in joining, now is the time!

Also check out our beautiful website at boulderangels.org to learn more.

Go to the NVC tonight.

Until next week,

-H