Finding Angels in B.C.

PRESENTATION to Vancouver Enterprise Forum, Sept. 25, 2001.

I started out as an Entrepreneur and after I sold my company, I became an Angel Investor. Now I'm "fully invested" - which is a euphemism for "broke"! I now run an angel network in Vancouver to help other angels become fully invested.

Step #1

The most important first step in raising capital - from any source - is to get the interest of an angel investor, i.e. not just someone with a few dollars to invest, but most importantly, to get a mentor - someone with experience, connections, perhaps cash or access to capital. If you can't attract such a person, how will you attract anyone at all? Tip: They should not be approached just for funds. It comes down to relationships - first building a relationship with an angel that will then lead to building a relationship with a VC or strategic partner. But first, you need to find an angel or two.

Angels vs Venture Capitalists

Angels are accomplished entrepreneurs who invest their own money. Venture Capitalists are professional investors who invest other people's money. Angels try to find reasons why they should back a deal. VC's must think of all the reasons why they should not back a deal. Angels are mavericks and pioneers in their own right. VC's are followers - not leaders. They like to reduce risk, rather than take risk. Angels can make a decision- fast! VC's on the other hand need to do a lot of "due diligence" on a company. That's an important difference. If you understand that, you'll be more successful when approaching either of these. VC's like Angels. They lend credibility and expertise to a venture. Many VC's have made their millions by investing in an Angel's (when s/he was still an entrepreneur) company. 

WHERE?

Here in B.C., we have a growing angel network. There are hundreds of angels - i.e. accomplished entrepreneurs with their own money and time to invest in a promising new venture. Here are just a few venues where you can rub elbows with them:

Vancouver Enterprise Forum - attend the monthly meetings and see www.vef.org for more ideas.

BC/ASI Business Advisory Board - present your case to a seasoned "rent-a-board" for feedback and contact. (see www.asi.bc.ca)

Fraser Valley Technology Network - Great for companies located in the areas bounded by Surrey, Delta and Coquitlam on the west and Chilliwack and Hope on the east. (see www.fvtn.org).

NewVenturesBC - a newly formed organization dedicated to building better companies using a business competition as the vehicle for building teams and connecting with mentors. (see www.newventuresbc.com)

Capital Connector on T-Net - check www.bctechnology.com's "Capital Connector" for an on-line entrepreneur-to-investor matchmaking database.

Angel Forum - every quarter or so, there's an open, forum-style venue at which entrepreneurs can pitch their deals to angels and other investors. This is done on a fee-for-service basis. (see www.angelforum.org)

Vantec - Angel Network - this originated through the Vancouver Enterprise Forum and is an informal angel network which holds monthly, by-invitation-only meetings to be introduced to entrepreneurs. For details on how to get in - as an angel or investee, please see www.vef.org/vantec.html. NB: To get in, you need a sponsor - a good sponsor - not just someone who's doing you a favor to get you in the door! See the write-up.

First Tuesday - a privately organized venue for getting investors, investees, and others to meet. (see www.firsttuesday.com)

Industry Orgs - many industry organizations, such as the BC/TIA (www.bctia.org) and BC Biotech (www.bcbiotech.ca), CATA (www.cata.ca), the Vancouver Board of Trade (www.boardoftrade.com), various conferences (e.g. SoftWorld, www.softworld.org) and others host numerous events which all present opportunities to make contact with angels. An Events Calendar is at www.vef.org.

The Good News

But no one's investing! Yeah, right - just look at the facts. Investments for the first half of 2001 are ahead of where they were in the first half of 2000. I figure that last year, angel investments exceeded $40 million - about 10% of Venture Capital investments in B.C. And - those are just the deals I've heard of (there are certainly many more that I haven't heard of). Each week, you can see reports in Business in Vancouver on recent financings. You'll be amazed. Last week, I asked several angels if they're investing. The first few I asked were "fully invested" - no cash to spare and a bit glum. But, the next few I asked had cash and where keenly looking for deals.

The Last Word

If you have a good team (with a good angel/mentor or two), a good product (technology), with a big opportunity you will get funded. If you're not getting much interest - you're probably a bit short in one of these areas or haven't been able to convince anyone that you've got it what it takes.