Monday, March 28, 2011

Boston Angel Series: CommonAngels

CommonAngels is one the oldest angel investment groups on the east coast. Established in 1998, it's members include successful current and past entrepreneurs as well as executives of tech companies

Looking at the exits and current investment portfolio, we can count successful acquisitions and prospective IPO candidates among the list

In the fall of 2010, CommonAngels announced a key new component to their firm’s financing strategy: the ability to invest in a greater number of startups at earlier stages, and in smaller amounts.

We asked Chris Sheehan, one of the managing directors about the new early stage investments as well as what changes he has seen in Boston angel investment.

Q. Buzz in theHub: What can you tell us about new early stage investments, your thesis or number of investments planned.

A. CS: We have been very active, leading large seed rounds in Practically Green and, with Kepha Partners, Clovr Media.  (Clovr just closed a $8.3M Series A round led by Bain Capital Ventures.)  In addition, we have invested in a half dozen seed opportunities including Blaze Software, Offerpop (NYC), Insight Squared, Yieldbot (NYC), Ayeah Games, and another still in stealth mode.  It’s roughly about an investment per month.

Our investments fall into two general categories, although the lines between the two are admittedly blurred:
Large seed/small Series A rounds. We catalyze these financing rounds for entrepreneurs, bringing our expertise and connections to the table.
Small seed investments. Chris Sheehan and James Geshwiler, through their micro cap funds, make small seed investments to help entrepreneurs get their ideas off the ground.

The seed investments are well suited to Internet and mobile opportunities where the cost of initial product development and distribution are significantly lower than in previous years.

Q: Buzz in theHub: Over the past 5 years, what changes have you observed in the Boston Angel community and what are the effects of those changes.

A. CS:
The availability of seed capital is higher; some of this is due to increase activity by the Boston angel community, both as individuals and as groups; some of its is due to micro cap VCs and traditional VCs getting more active.

Greater willingness to invest in Internet enabled businesses that carry consumer or SMB risk

A greater sense of energy and visibility permeates the angel community. Programs and events such as Tech Stars, Dog Patch Labs, angel group syndication, and Angel Boot camp help contribute to this.  The upcoming national ACA conference will also be make an important contribution

Some diversification focus with new angel groups starting around clean tech and medical/life science investing.

Although anecdotal, it seems that level of investing by NYC and Boston based angels in each others cities has increased

It is evident that CommonAngels is responding to the new market conditions and aggressively addressing the need for urgency, a larger basket of deals and evolving their investor member profile.

Their recent investments and new seed capabilities make it clear that entrepreneurs should  include a stop at CommonAngels on their financing tour.

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