The Northwest Energy Angels invited me to Seattle to talk about exit strategies for Angel investors. The full video and Q&A from that talk is online in full 720p High Def.
Some of the highlights include:
- Organized angel investing is still quite new - only ten or twelve years old.
- Successful investing requires two things - buying right and exiting well.
- The big ‘new story’ is the large number of small and medium size exits.
- The ideal size for big companies to acquire is $10 to 30 million.
- Companies are being acquired earlier and earlier - often just 2 years from startup.
- Venture Capital in North America is in crisis - big funds aren’t working anymore.
- Traditional Venture Capital funds have grown too large for today’s exits.
- We now have a much better idea of the differences between traditional Venture Capitalists and Angel Investors.
- The most important differences relate to the exit - the minimum investment size, minimum return required and acceptable time to exit.
- If a VC follows on it will add about ten years to the exit.
- Fascinating new data from the bankrupt law firm Brobeck shows that "outcomes are inferior when angels and VCs co-invest".
- Angels alone are "as likely as the VC backed firms to have successful liquidity events".
- The optimum strategy is ‘Angels or VCs but not both’.
- Checklist to determine whether an individual company should be financed with Angels only or VCs.
The video is online here.