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Ask HN: best way to (indirectly) invest in a startup via angel/seed fund?

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Re: Ask HN: best way to (indirectly) invest in a startup via angel/seed fund?

#11

Post by damien7579 »

adaml_623 wrote: post #8
damien7579 wrote: post #7

Earlier quoted context omitted.

Good question: Yes I was in a UK startup. I feel that the risk adverse nature/attitude we came across significantly impedes innovation in the UK (remember this is in my experience and this was around 2001-2005). I believe we had to work harder to overcome this and this took focus away from our core activities at times. We often found no one was willing to invest unless you had 5 years of track record and £1mill/yr tu…

So your point is that even if you can get the Angel cash in the UK you'll face larger hurdles in the later stages compared to the US. And I think you have a point about the risk adverse nature of Brits. Thanks for the answer. Wish I had an answer to your question :-)

Good summary of my waffle ;) I suppose the stats of startups making it out of the 5th year is appalling. Less than 10% as I recall which may be similar to US but every extra hurdle in the way doesn't help either! Plus US markets are generally larger so ROI is bigger for similar risk profile at a guess.

Re: Ask HN: best way to (indirectly) invest in a startup via angel/seed fund?

#12

Post by victorp »

You can try angel networks.

Angels join networks that search and filter investment opportunities, and the angels choose to co-invest if there's a match.

The largest one in the US is Tech Coast Angels.

I work in an angel network, based in Chile, with angels/dealflow from abroad. For example, right now we are closing a round in a medical devices startup in San Francisco, where 4 angels (two in Chile, one in Mountain View and on in Spain) are co-investing using convertible notes.

Re: Ask HN: best way to (indirectly) invest in a startup via angel/seed fund?

#13

Post by tomfakes »

damien7579 wrote: post #10
known wrote: post #9

http://angel.co/

Thanks for the link to angellist - something I aspire to join but as I said in my post, you have to be approved to get listed and one of the requirements is you're not a newbie - you must have connections to other angels - in fact you must be referred by another angellist angel and have invested at least 3 times before. This was revealed in this great interview with one of the angel.co founders: http://www.danielodio…

I'm in a very similar position - done an exit, taking some time off, have some money to invest.

I have yet to find a group that doesn't advertise that they need experience. I would guess that some of them would bend this rule if you got in touch and networked with them and their current members and they decided you were of sufficient quality to be allowed into the club.

We should start a 'newbie angels' group where we kick you out after you've done 3 investments!

Re: Ask HN: best way to (indirectly) invest in a startup via angel/seed fund?

#14

Post by damien7579 »

tomfakes wrote: post #13
damien7579 wrote: post #10

Earlier quoted context omitted.

Thanks for the link to angellist - something I aspire to join but as I said in my post, you have to be approved to get listed and one of the requirements is you're not a newbie - you must have connections to other angels - in fact you must be referred by another angellist angel and have invested at least 3 times before. This was revealed in this great interview with one of the angel.co founders: http://www.danielodio…

I'm in a very similar position - done an exit, taking some time off, have some money to invest. I have yet to find a group that doesn't advertise that they need experience. I would guess that some of them would bend this rule if you got in touch and networked with them and their current members and they decided you were of sufficient quality to be allowed into the club. We should start a 'newbie angels' group where w…

I like it :)

drop me a message offline (see my profile) perhaps we can share our research?

Re: Ask HN: best way to (indirectly) invest in a startup via angel/seed fund?

#15

Post by angel1234 »

Way of the future may be sidecar funds that are for passive investors interested in angel investments. The sidecar fund invests automatically in all the deals of the angel group to which it is attached. This is a good way for the angel group to be assured of committed capital - especially during economic downturns where members may be less free with cash - and also allows external investors to achieve a diversified exposure to start up investments with a relatively small capital commitment. This is a good way for newbie angels to learn more about the angel group and their investment process - and if they like they may later choose to join the group and become more active "mentor" investors.

Re: Ask HN: best way to (indirectly) invest in a startup via angel/seed fund?

#16

Post by angel1234 »

Don't know about US/UK but in Australia the government has set up Early Stage Venture Capital LP structure to encourage investment in innovation. Investments via these structures are income and capital gains tax free. Here is link to news story regarding sidecar fund linked to Sydney Angels http://t.co/RoicITs

Re: Ask HN: best way to (indirectly) invest in a startup via angel/seed fund?

#17

Post by damien7579 »

angel1234 wrote: post #15

Way of the future may be sidecar funds that are for passive investors interested in angel investments. The sidecar fund invests automatically in all the deals of the angel group to which it is attached. This is a good way for the angel group to be assured of committed capital - especially during economic downturns where members may be less free with cash - and also allows external investors to achieve a diversified e…

Interesting concept and sounds like a good way to start as a newbie angel investor.

Re: Ask HN: best way to (indirectly) invest in a startup via angel/seed fund?

#19

Post by bootcampdk »

I'm obviously biased here but I think a great way for you to get your hands dirty would be to invest in an accelerator, such as (plug alert!) Startupbootcamp or The Difference Engine or Tetuan Valley or a number of others.

By invest I mean either time (as a mentor) or money (as an investor in the accelerator itself) or both.

You get to be involved in 10 early stage startups, but you are not alone. You can follow their progress as they get input from dozens of super star mentors. It's actually an awesome due dilligence process as you get to see which teams are great at generating traction.

Re: Ask HN: best way to (indirectly) invest in a startup via angel/seed fund?

#20

Post by _b8r0 »

damien7579 wrote: post #6
_b8r0 wrote: post #3

Have you had a look at these (not that I'm recommending, but might be worth a look)? http://www.angelinvestmentnetwork.co.uk/home http://www.venturegiant.com/ http://www.angelsden.co.uk/ I believe Business Link also run a similar scheme but I generally stay well clear of them, I've yet to see anyone from Business Link try to do anything other than sell me more Business Link stuff I don't need. Best of luck.

Thanks for the links - I came across those during my research and they all seem to links angels to entrepreneurs/companies looking for investment. I am more interesting in seed/startup/angle funds that pick the companies to invest in during the early startup phase.

Whereabouts are you? If you're in the south, drop me an email and lets meet up for coffee sometime. I'm not averse to investing in the right opportunity either - might be a good idea to knock our heads together and see what comes out.
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